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PHILLIPS & ASSOCIATES Oklahoma Criminal Defense Attorneys

Coupon Fraud is a Federal Crime

May 19th, 2011

White collar attorneys in Oklahoma and around the nation eye with interest the recent FBI arrest of “The Coupon Dude,” a 22-year-old college student accused of counterfeiting coupons.  Lucas Townsend Henderson, of Lubbock, Texas, is accused of not only creating and distributing fraudulent coupons online, but also of writing an instruction manual teaching readers how to do the same.

Henderson made the counterfeit coupons and counterfeiting guide, entitled “The 6 Commandments of Coupon Making,” available online via internet forums and message boards.  The FBI found Henderson via an IP tracking device.

Unsealed charging documents from the FBI show that Lucas Henderson was charged with wire fraud and trafficking in counterfeit goods.  Henderson allegedly created counterfeit coupons for a variety of consumer goods ranging from low-priced household goods to high-end electronics, such as X-Box and Playstation.  Henderson’s counterfeit coupons included unauthorized use of the “Powered by SmartSource” logo.  SmartSource.com is one of the leading providers of internet printable coupons.

Henderson was charged last week with one count of wire fraud and one count of trafficking in counterfeit goods.  If convicted, he faces up to 20 years in Federal prison for wire fraud and up to 10 years for counterfeiting.

Coupon fraud affects manufacturers and retailers who redeem the counterfeit coupons, and such losses are then passed on to the consumer in terms of higher prices and decreased acceptance of legitimate coupons.  According to an FBI.gov article detailing Henderson’s Federal criminal fraud charges, over a two to three week period in 2010, approximately $200, 000 worth of counterfeit Tide coupons were redeemed, with the bulk of the loss being borne by Proctor and Gamble, manufacturer of Tide, and the retailers who honored the fraudulent coupons.

The Coupon Information Corporation (CIC) posts on its website an extensive list of counterfeit coupons, alerting conusmers, manufacturers, retailers, and law enforcement to fraudulent coupon schemes.  The CIC claims that, with its assistance, fraud schemes totaling over $750 million have been uncovered.   The CIC is critical of a popular reality series which focus on the extreme use of coupons, saying the series depicts illegal coupon use and encourages coupon fraud, or using a coupon in any manner other than its intended purpose.

Coupon use is exploding, and with its growth comes an increase in coupon fraud in Oklahoma and across the United States.  If you have been accused of fraud or suspect you may be under investigation for white collar criminal activity, consult an Oklahoma fraud attorney as soon as possible.

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PHILLIPS & ASSOCIATES Oklahoma Criminal Defense Attorneys