By Shawn Hogendorf, Correspondent

A 37-year-old Prior Lake man pleaded guilty to his role in defrauding Best Buy Inc. of about $31 million over four years in U.S. District Court on Thursday morning.

Robert Paul Bossany, a former Best Buy vendor-relations manager, admitted to U.S. District Judge Michael Davis that he received about $100,000 in cash, checks and gift cards from a Chicago-based computer parts supply company called the Chip Factory, according to the U.S. Attorney’s Office.

Bossany pleaded guilty to one count of conspiracy and one count of money laundering for his role in the scheme. He was charged on Dec. 15, 2008.

Bossany faces a potential maximum penalty of five years in prison on the mail fraud count and 20 years in prison on the money laundering count. Judge Davis will determine Bossany’s sentence at a future date.

According to court documents, Bossany was an employee at Best Buy from 2003 to 2008 and was responsible for managing the purchase of computer parts from outside vendors, such as the Chip Factory.

While employed at Best Buy, Bossany oversaw the Richfield-based company’s relationship with the Chip Factory, which sold computer parts through an online reverse auction administered by National Parts Inc.

According to Bossany’s plea agreement, Best Buy would identify the computer parts it needed and then National Parts Inc. would compile and post a list of those parts on a computer server that was accessible by approved computer parts supply vendors, including the Chip Factory.

The vendors would then review the list and place bids on the parts the companies were interested in supplying to Best Buy. The vendor bids would state whether the part was available and then quote a price at which the vendor could supply the parts to Best Buy. The vendor that had the parts in stock and ready to ship, and quoted Best Buy the lowest price, would win the order.

When Best Buy solicited bids for computer parts, the Chip Factory would allegedly submit fraudulently low bids with no intention of providing the parts at the bid price. The Chip Factory often didn’t have the parts available to ship, according to court documents.

After National Parts Inc. issued a purchase order to the Chip Factory, the company would fraudulently invoice Best Buy through National Parts Inc., at a price significantly higher than the bid price.

The Chip Factory invoiced over $60 million in parts through National Parts Inc., defrauding Best Buy out of at least $31 million, according to court documents.

Bossany admitted that on March 16, 2006, he received and deposited a $1,000 check into his personal account from officers of the Chip Factory knowing that the transaction involved the proceeds of fraud, according to the U.S. Attorney’s Office. Bossany also knew the transaction was designed to conceal the nature and source of the proceeds of fraud.

According to court records, Bossany also received Federal Express and UPS packages containing magazines, CDs or DVDs stuffed with cash, checks or gift cards at his Prior Lake home on a bi-weekly, and at times weekly, basis from 2003 through mid-2007.

The Chip Factory sent the envelopes to Bossany’s home address rather than to Best Buy to “avoid arousing the suspicions of [Bossany’s] co-workers,” the documents stated.

During the time the Chip Factory was sending Bossany cash, checks and gift cards, Bossany admitted he kept the bribes from his supervisors when he was questioned about the high prices the computer-parts company was charging.

Bossany also admitted providing confidential information to the Chip Factory, which was used to further the scheme to defraud Best Buy Inc.

Neither the Chip Factory nor National Parts Inc. has been charged in federal court, but further charges in the case are possible.

The case is the result of an investigation by the U.S. Postal Inspection Service, the Internal Revenue Service-Criminal Investigation Division and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys John R. Marti and William J. Otteson.

 Shawn Hogendorf can be reached at (952) 345-6374 or shogendorf@swpub.com.