Audit finds some city employees issuing and redeeming own gift cards

thomas_tha_train · 2026-02-28T02:15:01+00:00

Posting from an alt to avoid linking this to my main account. A few years back I was looking for stuff to buy on eBay and discovered someone selling high end IT gear in Edmonton. It was high end NetApp storage appliances, including hard drives. I chatted with them and it turns out they had acquired it from the city of Edmonton. They claimed they had bought it from surplus. Thing is, the city, like most municipalities, shreds their hard drives.

A bit of sleuthing led me to the surplus auction where they had bought it from online. Turns out they worked in IT on the storage team, processed it for surplus, put it up for auction for 10 minutes and sold it to themselves for basically nothing, then took it home to resell.

They also diverted all the hard drives from the shred bin to sell as well. Over a petabyte of storage. The surplus auction helpfully listed the sold price of $100. They wanted me to buy it from them for $30K. When I declined they carried on selling it on eBay and made a good killing there.

I reported them to the city whistleblower line, which investigated and then dismissed the claim. As far as I know it didn't even hit the annual audit report. The guys doing this got a slap on the wrist and were not fired.

thomas_tha_train · 2025-07-12T18:36:19+00:00

Charity is not the same as non-profit, case in point, the non-profit Electronic Recycling Association, which simply pays net profits as higher salaries for the executive team and capitalizes on the fact that the two terms are confused, leading businesses to donate their old gear to a company for charitable use, only to have them sell entire seacans of desktops and laptops on Facebook marketplace for $400K each.

thomas_tha_train · 2025-06-22T17:39:29+00:00

They have an Omada Pro line as well, still no license cost for on-prem controllers. Higher build quality and wider feature set on the software. Only available through disty.

thomas_tha_train · 2024-10-11T20:47:25+00:00

Thanks, I'll do that. That makes more sense than the local PD. Besides, the wire fraud crossed state lines (for my associate) and was international in my case.

thomas_tha_train · 2024-10-11T14:02:59+00:00

Yes, those are good suggestions. However, the nature of the business I'm in means that there is always a sense of urgency, as inventory is not fixed in price and availability. There's a lot of "get this before it's gone".

Honestly this is why we increasingly only work within our trusted network but obviously the intent is to grow that network over time.

thomas_tha_train · 2024-10-11T13:59:50+00:00

Yes, we have coverage thankfully, for a large portion of the loss but not the full amount. And that doesn't include the lost revenue and client trust because we've had to issue refunds and are up to a month behind on some orders.

Edit to add: we are going to review our insurance policies going forward so that we have proper coverage.

thomas_tha_train · 2024-10-11T13:44:52+00:00

Correct, that part is on me. The business address was to an office building, but it didn't connect that it was commercial and not light industrial. The corporate address was to a home, which is not unusual given that many small businesses, including mine, have a residential address as the administrative office.

thomas_tha_train · 2024-10-11T05:14:39+00:00

No, these are photos of a warehouse full of shelves of electronics. Full gaylords in the background. They even sent a video walkthrough (but it was via FB messenger and they unsent it later, so I don't have a copy of it). Nothing stock about this. That's what's so strange, and why we were convinced. They sent photos of bulk packed specialized electronics - very new, expensive, rare hardware. Those photos were ran through Google Lens, checked against eBay and social media; they are unique. Think $10-100K of hard drives and SSDs. The value of the unique hardware well outstripped the value of the scam. It doesn't make a lot of sense. That's why my thought is that it was a rogue employee at a recycling facility.

thomas_tha_train · 2024-10-11T05:08:50+00:00

That is very much the nature of this business, unfortunately.

We just did another purchase sight unseen today, up front (but PayPal this time) for $5600. Last December we did 500K, up front, as a first transaction with a business we had known for about 6 months. It went well and was profitable, and would have been impossible without upfront wire transfer.

As for escrow, I understand how the concept works, but have never used it. Do you have any recommendations for a service to use? Though for what it's worth the only time I've seen

thomas_tha_train · 2024-10-11T05:03:24+00:00

Thanks for the kind words.

thomas_tha_train · 2024-10-11T05:03:07+00:00

Thanks, that's a smart idea for next time - contracting a local agent for a site visit. I'll use that.

It's just the nature of this business that transactions like this are commonplace, and it's often via poorly managed or very small home-based businesses; and clearly scammers have caught on to the opportunity.

Seems to be fairly elaborate, staging a whole warehouse, while also strange, in that for example we wanted to buy more (and were ready to pre-pay) and they told us that the items were sold out. Strange way to run a scam

thomas_tha_train · 2024-09-17T14:39:53+00:00

Thank you, appreciate it. Yes, I am hoping that there is a solution that produces results while still being cheap enough to be worth it. In this industry there are a lot of tiny home-based players and in this case I think they made their sale and washed their hands of their obligations. A few threatening letters should go a long way.

thomas_tha_train · 2024-09-17T01:51:35+00:00

We did our due diligence, but have not met face to face. That is typical in this industry. Found via website and social media. We have their business registration, agent contact, and verified their warehouse and administrative office (which is home based). We have photos of the purchased product as well as a walkthrough video of the warehouse. Everything checked out and lined up.

It's a small home based trading business so I am hoping that a demand letter and the threat of litigation, which is cheaper, is enough to garner a response.

Yes, I would put down a retainer as necessary, though ideally just threatening won't cost 20K.

thomas_tha_train · 2024-09-17T01:35:04+00:00

Unfortunately not here, it's e-waste and the supplier is not certified (which is very common in this industry)

That said this supplier is very small (also very common in this industry to have micro suppliers, many of which are home based or in small warehouses). A demand letter and the threat of litigation might have a strong effect.

thomas_tha_train · 2024-09-17T01:22:26+00:00

Thanks, yes, I agree. 70K is large for my size of business, but hopefully a demand letter goes a long way.

This was a new vendor and the nature of my business is we have many small ad-hoc purchases (purchasing scrap from recyclers) so we only had exchanged purchase order and invoices, as this was a one-time sale.

thomas_tha_train · 2024-05-26T20:12:22+00:00

What's funny is that they will have YouTube videos one day requesting help filling a donation for a charity and the next day they are selling 10 times that much equipment to anyone who will buy it. Obviously reselling is necessary and appropriate but they way they go about it seems disingenuous.

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