David Whitaker

Wire Fraud, Conspiracy to Commit Wire Fraud, Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, and Receipt of Commissions or Gifts for Procuring Loans

Attorney: George J. West
Date of Arrest: March 19, 2008
Date of Arraignment: May 15, 2008
Sentencing Date: December 2, 2012

Read the plea Agreement

Read Mitigation Report used in 2011 Federal sentencing.

Read Forensic Report byPsychiatrist Dr. Keith Ablow used in 2011 Federal sentencing.

Facts

December 12, 2007, under seal in U.S. District Court for the District of Rhode Island, a Criminal Complaint was filed. David Whitaker was charged in violation of Title 18, United States Code Section 1343 -Wire Fraud. December 12, 2007, a warrant was issued by Magistrate Judge Lincoln D. Almond.

On March 19, 2008 David Whitaker was expelled from Mexico and arrested by United States secret Service at the Los Angeles International Airport.

On March 20, 2008 he appeared in the Central District of California for a Rule 5 proceeding where David Whitaker was held and ordered back to the District of Rhode Island.

On April 4, 2008 Whitaker appeared before U.S. Magistrate Judge Lincoln D. Almond for an initial appearance with his counsel Thomas Briody. David Whitaker was ordered to be held at Wyatt Detention Facility.

 

On May 9, 2008 under seal, a four-count Criminal Information was filed. Whitaker was charged with Wire Fraud, Conspiracy to Commit Wire Fraud, Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, and Receipt of Commissions or Gifts for Procuring Loans.

On May 15, 2008, in a closed court room, before the Honorable William E. Smith, U.S. District Judge, Whitaker appeared for an arraignment and a change of plea hearing.

 

He pleaded guilty to all counts. In exchange for Whitaker signing a plea deal, the government agreed to recommend some standard things such as a reduction for acceptance of responsibility'. Whitaker would benefit from the plea by the government asking the court to impose a sentence at the low end of the Federal Sentencing Guidelines.

The government also agreed to file a 5k1.1 motion asking the court to impose a sentence below the Federal sentencing Guideline range if Whitaker provided substantial assistance to them.

After several proffers (formal talks), on February 25, 2011 Whitaker began an undercover investigation with an FDA Task Force that resulted in a 1/2 billion dollar settlement against Google.

Whitaker's involvement in this case was substantial and reduced his sentence.

The Offense

Count 1 -Wire Fraud

David Whitaker was CEO for MixITforME.com. He received millions of dollars of electronic equipment orders from customers often by wire transfer. He failed to deliver some of these products. He made false claims to his customers. Starting in the summer of 2005 until on or about March 2006 MixITforME.com failed to deliver millions of dollars worth of product to its customers. Whitaker was primarily responsible for approximately 83 larger business accounts that were defrauded, totaling over 7 million dollars.

During this time he lived a lavish lifestyle. He spent large sums of money: a luxury mansion in Miami, Florida (over $200,000 per month); home in Jamestown ($9,000 per month); private jet services ($655,648); New Year's Party (over $500,000); rental of luxury yachts; luxury autos; limousine and drivers; and the payment of hundreds of thousands of dollars for bodyguard and security staff.

Count 2 -Conspiracy to Commit Wire Fraud

David Whitaker and his business partner Cory Johnson falsified tax returns as part of an application to acquired merchant card processing from NOVA .

As a result of MixIT'S downfall, NOVA refunded customers who paid by credit card, approximately $3,178,347. Mix IT had a cash reserve with NOVA of approximately $954,460.This resulted in a loss to NOVA of aproximately $2,223,887.

Count 3 -Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity Whitaker diverted $150,000 to pay Future Affairs Productions, a lavish party planner after it was received from NOVA and deposited into BankRI.

Count 4 -Receipt of Commissions or Gifts for Procuring Loans
Whitaker offered his BankRI manager, David Carpenter, a job with MixITforME as CFO, in exchange for providing his vendor E-cost.com and NOVA with Letters of Credit.

Background

Whitaker started a website, MixITforME.com in the early summer of 2005. He developed a marketing plan to allow users to purchase iPods below market price as loss leaders.

This effort drew hundreds of thousands of immediate unexpected unique users to MlxITforME.com. At this time, Whitaker was on the lam. He was fleeing a probation violation related to some Massachusetts Larceny cases. Whitaker operated under the alias David Andrews.

This unexpected popularity made doing business under his true name difficult. Whitaker took on a business partner, Cory Johnson who would provide a legitimate name to MixITforME.

Johnson provided capital and credit that formed the company into an enterprise that birthed rapidly. Within a few short months, the website had moved out of Whitaker's guesthouse apartment to occupy 3 floors of a downtown Providence office building.

Whitaker and Johnson hired what they considered Senior Management experts from the likes of CompUSA and other Dot-coms.

MixITforME expanded its product line offering thousands of consumer electronic products continuing to offer loss leaders to draw web traffic.
The company faced obstacles processing credit cards. Merchant card processors such as Credit Card Services International and others would withhold MixITforME's credit card deposits. This interrupted MixITforME's supply chain and created havoc for its customers.

Whitaker's decisions and actions to sustain the company broke Federal Law.