The former owner of a Rhode Island trucking company is facing charges of wire and mail fraud after prosecutors allege he orchestrated an elaborate scheme to defraud Amazon (NASDAQ:AMZN) out of more than $640,000.
Michael Chaves, 40, of East Providence, Rhode Island, and former owner of auto transport company CAT Transportation Inc., was already awaiting sentencing in another federal case when he was arrested on Wednesday, June 17. He is currently being held in federal custody.
Court documents allege that since March 2017, Chaves opened approximately 30 Amazon customer accounts using various names and email addresses. Over a three-year period, prosecutors claim he placed nearly 10,800 orders totaling around $714,000, but kept the items and instead returned similar or used items or those around the same weight for a refund of more than $640,000.
Court filings claim that most of the items Chaves purchased and returned were auto and commercial motor vehicle parts to operate his auto transportation company.
In some cases, he would replace original items with those of similar weight, including a commercial truck tire. Instead of returning the tire, he sent back two pieces of wood in the Amazon box. Other examples include ordering a vehicle suspension ball joint and returning an oil filter wrench and a stabilizer bar link kit with dog treats, according to court documents.
Chaves also ordered new parts, like ceramic brake pads and a fuel injector, and returned the heavily used parts instead, according to court documents.
The former trucking company owner previously pleaded guilty to falsifying federal U.S. Department of Transportation records by allowing his drivers to operate without a valid commercial driver’s license (CDL) and exceed the maximum number of hours truckers are legally allowed to drive, ignoring the Federal Motor Carrier Safety Administration’s hours-of-service regulations.
He also admitted to fraudulently obtaining more than $400,000 in loans from various financial institutions using five different company names, continuing to illegally operate his trucking business using someone else’s identity after he was ordered to shut down his auto transport business by the FMCSA and tax evasion by commingling business and personal expenses.
In that case, Chaves is scheduled to be sentenced on July 17 in U.S. District Court in Providence, Rhode Island, according to court filings.