Back in May of 2008 David Whitaker pled guilty to an information charging him with wire fraud, conspiracy to commit wire fraud, money laundering and commercial bribery to which Whitaker admitted to defrauding around 83 business account customers and a credit card processing company of over $10 million.
Earlier this month he was finally sentenced to 70 months in federal prison and ordered to pay full restitution to the 83 business customers and credit card processing firm.
Whitaker admitted that he received millions of dollars from business customers who purchased electronic equipment from his company, Mixitforme, Inc. The equipment, however, was not delivered to the customers, and Whitaker made various false statements to the customers in an attempt explain why the deliveries were not made and in order to encourage additional orders.
During this same time, Whitaker admitted that he diverted millions of dollars which had been paid to his company for his personal use. He also admitted to having submitted false income tax returns to a credit card processing company, for the purpose of inducing that company to act as the credit card processor for Mixitforme. Whitaker also admitted to negotiating an employment opportunity between his company and a local bank branch manager at an annual salary of nearly twice that which he was being paid as an employee of the bank. In return, Whitaker obtained from the bank manager letters of bank credit which the manager did not have the authority to issue.
Whitaker has been detained since his arrest and expulsion from Mexico in March 2008. A federal arrest warrant had been issued for Whitaker in this matter in December 2007.
Assistant U.S. Attorney Andrew J. Reich told the court that the government considered a number of factors in deciding what sentence to recommend to the court. Reich explained that Whitaker had provided substantial cooperation to the government in its investigation of Google Inc.
For approximately 4 months in the early part of 2009 Whitaker assisted agents in setting up websites which purportedly sold illegal pharmaceutical products over the internet and which advertised their products through Google’s AdWords program. Whitaker also explained to government investigators that he illegally sold pharmaceutical products through the AdWords program while he was in Mexico. The investigation of Google eventually resulted in a non-prosecution agreement between the government and Google, which provided that Google was to forfeit $500 million to the U.S., and also establish a number of procedures and policies which would insure that “rogue” pharmacies would no longer be permitted to advertise through the AdWords program.
According to Reich, the impact of the agreement has been very significant, in that it has prevented millions of Americans from accessing illegal drugs through the internet.
At sentencing, Reich also stressed the importance which the government placed on the impact which this case had on the victims of Mixitforme. The government recommended a sentence of 70 months imprisonment and full restitution to the victims.
In following the government’s recommendation, the court stated that the sentence of 70 months struck the exact right balance considering the seriousness of the offense and the extent of Whitaker’s cooperation. The court also ordered full restitution to the victims, in the total amount of $10,065,399 – Source.
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