Feds charge Groton man in multimillion-dollar fraud scheme
Providence — A 51-year-old Groton man who runs a wholesale jewelry operation in Rhode Island is facing federal charges for allegedly orchestrating a long-running, multimillion-dollar fraud scheme that defrauded one company of more than $3.6 million, authorities said.
Gerald Kent is the owner and operator of Kent Jewelry in Johnston, R.I., which primarily sells jewelry on the internet using websites such as Groupon.com and Zulily.com, authorities said.
Kent allegedly submitted fraudulent invoices to a factoring company that netted Kent nearly $5 million.
Factoring is a financial transaction and a type of debtor finance in which a business sells its invoices to a third party, called a factor, at a discount. Factoring companies work with businesses to provide working capital in order to grow their businesses without having to wait for outstanding accounts receivables to be paid.
Kent allegedly created hundreds of fraudulent invoices, created and used a fraudulent clone of Groupon Inc.’s website, enlisted co-conspirators to pose as Groupon employees and opened bank accounts in the names of Groupon and Zulily Inc. in order to deceive the debtor finance company into believing it was receiving payments from these companies, according to a statement from the Rhode Island U.S. Attorney’s Office.
Kent was arrested Wednesday evening at Foxwoods and appeared Thursday before U.S. District Court Magistrate Judge Patricia A. Sullivan, where he was ordered detained on charges of wire fraud and aggravated identity theft.
The matter was investigated by agents from the U.S. Secret Service and the FBI. Kent is due back in court on July 26.
Comment threads are monitored for 48 hours after publication and then closed.