24-year-old’s sales fraud scheme paid for $100,000 Mercedes, plastic surgery, feds say
A man from California thought he was paying someone named Greg Mercury $400,000 for a lucrative online business that sold drones through the e-commerce platform Shopify, according to federal court documents.
Instead, prosecutors said, he got a blank Shopify account with no record of any sales.
Greg Mercury is actually a 24-year-old man named Harlan Barry Cox who the Justice Department said used various aliases to sell $706,000 worth of fake online businesses from 2018 to 2019. Cox is accused of spending the fraudulent funds on vacations, a $100,000 luxury Mercedes SUV and plastic surgery.
Cox pleaded guilty to wire fraud on Friday, court filings show. Under the terms of the agreement, he agreed to forfeit $561,767 and faces up to 20 years in prison — though his sentence will likely be far less, prosecutors in the Eastern District of Virginia said.
Public defenders representing Cox did not immediately respond to McClatchy News’ request for comment on Monday. Cox, who has remained in jail since his arrest in June, could not be reached for comment.
According to an affidavit filed in support of the criminal charges, Cox first used the Greg Mercury moniker in May 2018. Prosecutors said he sold a fake business called “Drone Purple” for $40,000 to a buyer in Washington, but the buyer figured out it was a scam and tracked Cox down using bank records linked to the money transfer with Greg Mercury.
Cox pleaded guilty to a misdemeanor charge in state court and received a six-month suspended sentence, the affidavit states.
But his brush with the law didn’t stop there.
Prosecutors said Cox used an identical ruse to sell Drone Purple to the California buyer later that same year — this time for a purchase price of $400,000. Marketing materials used for the sale reportedly showed the business had $2 million in revenue and a profit of more than $1.3 million.
The buyer sent the payment in two installments of $20,000 and $380,000 — a small portion of which went to a third-party broker that facilitated the sale, according to the affidavit.
But when the buyer accessed Drone Purple’s Shopify account after the sale was complete, the registration details indicated it was opened just a few months earlier and had not generated any income, prosecutors said. Cox, still posing as Greg Mercury, reportedly promised to refund the buyer’s money as soon as a hold on the transfer was lifted. The buyer then asked the bank to release the hold, and the money was sent to accounts Cox controlled.
Prosecutors said Cox didn’t return the funds. Instead, he’s accused of spending $10,000 on a massage, locksmith, food and cash withdrawals; $103,000 on a 2017 Mercedes SUV; and $2,000 a month on rent at a high-end apartment complex in Richmond, Virginia.
Cox also used the money to pay for trips to Miami, New York and Beverly Hills, where he dropped at least $14,000 on a plastic surgeon and outpatient surgery center, according to the affidavit.
Cox repeated the scheme three more times using fake aliases such as Wayne Kastelein, David Hurt and Trevor Claude, prosecutors said. The other online businesses he purported to sell were also drone companies or, in one instance, an online marketplace for buying and selling internet businesses.
Buyers paid anywhere from $150,000 to $400,000 for his bogus businesses, prosecutors said.
Some of the funds never went through because banks handling Cox’s accounts suspected it was fraud, the affidavit states, and at least one of the victims filed a civil lawsuit against Cox in California.
Prosecutors said Cox ultimately settled that case in May 2020 by agreeing to sign over the title to his Mercedes.
Following complaints to law enforcement, investigators determined Cox was tricking buyers with forged documents — including bank statements fraudulently altered to show different names, addresses and deposits as well as fake screenshots from payment processing platforms purporting to show thousands of dollars in monthly revenue for the online businesses he was selling.
Prosecutors filed a criminal complaint against Cox in January, court filings show, and he was arrested in June.
A judge ordered he remain in judge pending trial, citing the weight of evidence against him, his criminal history, lack of stable employment, previous failure to appear in court, and his use of aliases and false documents in the alleged fraud.
A grand jury subsequently indicted Cox in July on seven counts of fraud, money laundering, engaging in unlawful money transactions and obstruction of an official proceeding.
He pleaded guilty on Friday to one count of wire fraud and is scheduled to be sentenced March 1.
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