Nicholas Selby caused Planet Fitness to pay for iPads by submitting fraudulent invoices from the company39s accounts payable department

Nicholas Selby caused Planet Fitness to pay for iPads by submitting fraudulent invoices from the company's accounts payable department.

Former Planet Fitness Systems Manager Sentenced to 33 Months in Prison For iPad Scheme

Nicholas Selby, who pleaded guilty in the case, purchased 2,190 iPads from four of Planet Fitness' technology vendors without authorization.

A former Planet Fitness systems manager who pleaded guilty to the theft of more than $1 million from the company was sentenced last week to 33 months in prison by the U.S. District Court in New Hampshire.

From November 2013 to March 2015, Nicholas Selby, 31, purchased 2,190 iPads from four technology vendors that Planet Fitness maintained credit accounts with despite not being authorized to make the purchases, according to a media release from the U.S. Attorney's Office in New Hampshire.

Selby, who was arrested in June 2015 and pleaded guilty to mail fraud in October 2015, caused Planet Fitness to pay for the iPads by submitting fraudulent invoices from the company's accounts payable department. As the iPads were delivered to the company’s corporate office in Newington, New Hampshire, Selby removed the iPads from the building and sold the tablets for his personal benefit, according to the release.

Selby's scheme was discovered in March 2015 when another Planet Fitness employee contacted a vendor about an iPad that the employee had ordered. The employee was made aware of significant iPad orders placed by Selby, and a company investigation resulted in a call to the Newington Police Department and the FBI.

Selby initially denied purchasing the iPads when he was confronted by the Planet Fitness investigative team of four senior employees, then asked how he could avoid police involvement, according to the government's sentencing memorandum filed Jan. 24. He eventually admitted purchasing the iPads and claimed he sold the devices to avoid a foreclosure on his mortgage, according to the memorandum.

After he was fired and escorted from the company's offices on March 31, 2015, he used proceeds from stolen iPads to purchase a cashier's check for $81,584 and delivered it to Planet Fitness' director of human resources. He said $40,000 came from the sale of the stolen iPads and falsely claimed that he withdrew the remainder of the money from his 401k retirement account and his son's college fund, according to the memorandum.

On April 1, 2015, Selby returned 40 iPads in original packaging to Planet Fitness. He also identified where five additional iPads were located in the building but again denied making unauthorized purchases, according to the memorandum. Planet Fitness returned the 45 iPads to the vendor, PC Connections, and was refunded $23,464.

Selby admitted to a detective two days later that he bought 170 iPads from PC Connections, sold 125 and denied making any other unauthorized purchases, according to the memorandum. An additional 99 iPads were returned to Planet Fitness by TradeUpCashOut.com, a company Selby sold several hundred iPads to, according to the memorandum.

Planet Fitness obtained invoices dating back to January 2013 from the four technology vendors with whom the company maintained credit accounts as part of the investigation. Selby was identified as the purchasing agent on 92 invoices. References to "iPads" were replaced with products consistent with Selby's duties as systems engineer on the company copies, according to the memorandum.

The altered invoices caused Planet Fitness to pay $934,362, including shipping costs, for 1,888 iPads sold by Selby for personal gain. The same audit discovered 20 non-altered invoices purchased by Selby, which accounted for 302 iPads sold for his benefit at a cost $156,363 to Planet Fitness, according to the memorandum.

The actual loss as a result of altered invoices, non-altered invoices and the refund from PC Connections totaled $1,065,100, according to the memorandum. Selby sought a prison sentence of 24 months, citing restitution paid, diagnosed mental health conditions, family, previous work history and a claim Planet Fitness was not substantially harmed by his conduct. Prosecuting U.S. Attorney Robert Kinsella recommended a 30-month sentence followed by three years of supervised release.

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