Dave and Adam's employees steal 1.3 million

When I worked for peach state they did ROUTINE inventory checks. Could never happen like that there.

MansGame said:

I'm pretty sure they stole the stuff, so wouldn't that be 100% profit if they sold anything?

Also, I'm sure they'll file bankruptcy or something. They won't probably have to go through their entire lives paying back the million bucks but I could be wrong.

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Lawsuit judgements, court costs and fines cannot be discharged via bankruptcy. These guys WILL be paying back these funds for the rest of their lives.

cgilmo said:

When I worked for peach state they did ROUTINE inventory checks. Could never happen like that there.

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The way that I read it is inventory checks wouldn't have caught it. The boxes were still rung up as sold, just were never paid for. This was an accounting issue.

mchenrycards said:

Lawsuit judgements, court costs and fines cannot be discharged via bankruptcy. These guys WILL be paying back these funds for the rest of their lives.

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You so sure about that? Don't get me wrong, I hope they do and I hope they suffer but the company will write that off and these guys will do time but doubt they'll be paying back $1.3mm in money.

How were they caught?

MansGame said:

You so sure about that? Don't get me wrong, I hope they do and I hope they suffer but the company will write that off and these guys will do time but doubt they'll be paying back $1.3mm in money.

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I would think they are going to have to pay it back in some fashion in time served or money. Them stealing sports cards, costing several people jobs and taking for no reason other than greed they are going to have no chance in a jury trail and I can't see a judge going easy on that type of dollar amount .

What a bunch of a-holes! And yes the will be paying the rest of their lives when they get out of jail. Let say about 50 bucks a week! How is some dumb hick working a paper route going to afford any more. I say let them out of jail to live on the streets. They will not get a job other than stealing again.

IUjapander said:

The way that I read it is inventory checks wouldn't have caught it. The boxes were still rung up as sold, just were never paid for. This was an accounting issue.

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Part of inventory checks is a daily sales log check.

gracecollector said:

The good thing is that the losses quoted were based on Hi Beckett Book Value, so they've really only out about 33% of that.

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I'm assuming legally, they're out only the wholesale cost and not hobby value. There maybe warehousing cost too. There is a local sports memorabilia dealer that's had their 3rd trailer of goods stolen in the last 4 years. Each time they're in the news, they keep inflating the value of stuff stolen and the trailer keeps showing back up in their parking lot a few months late

Fordman

Sell me your Jay Bruce cards!

jbmm161 said:

I would think they are going to have to pay it back in some fashion in time served or money. Them stealing sports cards, costing several people jobs and taking for no reason other than greed they are going to have no chance in a jury trail and I can't see a judge going easy on that type of dollar amount .

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I'm not a lawyer but I'm guessing the 20-something year old who stole $800,000 worth of merch isn't going to have to pay that back. Who would he pay cash too? The company will write it off. The kid will do time. They'll sue him and he will probably settle or file bankruptcy or something. I mean the kid will never get a real job again... You know how long it'll take him to pay back nearly $1mm in cash?! Lol just crazy. Hope to the kids learned a lesson behind bars.

MansGame said:

I'm not a lawyer but I'm guessing the 20-something year old who stole $800,000 worth of merch isn't going to have to pay that back. Who would he pay cash too? The company will write it off. The kid will do time. They'll sue him and he will probably settle or file bankruptcy or something. I mean the kid will never get a real job again... You know how long it'll take him to pay back nearly $1mm in cash?! Lol just crazy. Hope to the kids learned a lesson behind bars.

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They will have their paychecks garnished to varying degrees for the rest of their lives. Bankruptcy does not wipe out criminal restitution.

Criminal Restitution is Non-Dischargeable

Criminal restitution payments are considered non-dischargeable in a Chapter 7 bankruptcy. The "automatic stay" does protect the debtor from being arrested for failing to make the criminal restitution payments. At the end of the case, however, the debtor once again has to make the criminal restitution payments. Furthermore, any criminal restitution payments are considered "preferential payments." This means that the trustee can claim any payments made within the 90 days preceding the filing of the bankruptcy case. The trustee will use these funds to pay back other creditors in a specific order. The criminal restitution debt will be restored to the amount prior to that payment.[

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Paying Over Time under Chapter 13

Although a Chapter 7 bankruptcy case cannot be used to discharge criminal restitution payments, there is an alternative. You can file a Chapter 13 bankruptcy case. As with Chapter 7, the criminal restitution remains non-dischargeable. But the repayment plan of Chapter 13 makes it so that you can actually afford to repay your debts. During your bankruptcy, the government cannot seize your assets if you fail to make payments. Most debtors filing under Chapter 13 end up paying less than 100% of what they owe. This does not apply to the criminal restitution, which must be paid in full. At the end of your bankruptcy, you will be responsible for any amount of the criminal restitution payments that you have not paid.

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MansGame said:

You don't have too, read his post again... Seven figures walks out the door? You should have caught that earlier. At least I'd hope.

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Since it's supposedly a POS software flaw being blamed, I can see how seven figures walks out of the door unnoticed. If the second and following boxes get rung up at no charge, I assume the POS system also removes it from inventory, so when a D+A employee does an inventory check, all seems correct from what the system says is in inventory compared to what's on the shelf.

The big Q is if the POS receipt or invoice shows a unit cost of $0.00 for each of the free boxes. If so, someone wasn't paying attention to the invoices or receipts. the article says the employees were caught when credit card sales were analyzed, but I bet it might have actually been someone wondered why there was a credit card charge for $55 or $100 or whatever yet 3-4 boxes were reported sold that should usually been at least a $200 credit card charge.

What I would like to know if this issue was really a negative of using two POS systems rather than one integrated. If two POS' is a negative, D+A should consider using only their website POS for every transaction and put terminals in the stores for customers to use to order items for immediate pickup or for retail employees to use to order products for those customers who don't want to mess with the website or don't know how to use computers or the internet.

I also have to question when I hear on podcasts or read in forums about really thin profit margins in the trading card business. If margins were as thin as I was led to believe, D+A should be out of business with that kind of embezzlement and not still in business thanks to online sales and a few layoffs.

bmp1971 said:

No wonder their prices were higher than everyone else's!

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Pretty vicious cycle. Retail side has losses or cashflow that is not where it needs to be so D+A has to increase prices to try to meet their expenses/stay in business or meet some target profit that the investors or owners want. They raise prices and I don't buy from them much anymore because they aren't competitive most of the time with the other 4-5 sources I comparison check when I make a purchase.

[MENTION=3275]Lancemountain[/MENTION] - Interesting. Well, the one kid is F'ed royally lol... and he should be... $800,000 after tax is literally going to take him the rest of his life to pay back. Especially because he won't be able to get a real job again. I don't even want to know how all that works. Hopefully they saved some of that $ or have some of the loot stored somewhere and can pay it back that way or something. Not to mention doing time in jail...

Yeah, this is really sad. You would think as an employee of Adam and Dave's you would get a nice discount on buying cards from them.

The margins on wax are about half of normal retail items, but have little other cost involved...

allstars said:

This is what happens when business owners take a hands-off approach to their businesses. Plain and simple, it's ludicrous that even a 5-figure amount of inventory should be missing without any red flags. 7 figures? Well...

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Very true. It's amazing they could continue running their business with so much money tied up. Crazy.