U.S. Attorney Justin Herdman announced today that Chad M. Stellato, age 47, of Langhorne, Pennsylvania, entered a plea of guilty to an information charging him with one count of conspiracy to commit wire fraud and six counts of wire fraud.
According to court documents, from January of 2013 through January of 2016, Stellato and his co-conspirators devised a scheme to defraud the home improvement store Lowe’s Companies, Inc. (Lowe’s) through fraudulent merchandise purchases and returns at Lowe’s store locations in Alliance, Boardman and in other states.
To carry out their scheme, Stellato provided the funding for his co-conspirators to visit Lowe’s store locations and purchase large quantities of tile. The co-conspirators would place the boxes of tile in shopping carts and stack similarly packaged but lower-priced boxes of tile on top in order to conceal the higher-priced tile underneath. The co-conspirators would then take the shopping carts to the check-out counter and purchase all the tile, including the higher-priced title, at the lower price. As a result, Stellato and his co-conspirators were able to obtain multiple boxes of tile at a much lower price than the retail value.
The co-conspirators would then travel to a different store location and return the title, without a receipt, for a full refund placed on a Lowe’s stored value card. Stellato would provide funding to his co-conspirators to obtain the necessary identification documents required to obtain these refunds. Consequently, Stellato and his co-conspirators received more money in refunds from the returned boxes of tile than what they actually paid to purchase the tile.
Stellato would retrieve the stored value cards from his co-conspirators and use them to purchase items from Lowe’s, thereby receiving the value of the goods at a discounted cost. In total, Stellato and his co-conspirators are accused of defrauding Lowe’s of approximately $444,000.
Stellato is scheduled to be sentenced on April 1, 2021, before U.S. District Court Judge James S. Gwin.
The investigation preceding the indictment was conducted by the United States Secret Service and the Ohio State Highway Patrol. This case is being prosecuted by Assistant U.S. Attorney Brendan D. O’Shea.