Case 3:17-cr-00260-JO Document 1 Filed 07/12/17 Page 1 of 5

F1LED12

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

PORTLAND DIVISION

UNITED STATES OF AMERICA 3:17-CR- 002-loD-:JQ

v. INDICTMENT

DAYID REICHERT, 18 u.s.c. 1343

Defendant. Forfeiture Allegation

THE GRAND JURY CHARGES:

BACKGROUND

1. Nike Inc. is the world's leading producer of athletic footwear and apparel; its

worldwide headquarters are in Beaverton, Oregon.

2. DAVID REICHERT, defendant herein, was employed by Nike Inc. for nearly 15

years, ultimately as a sales account executive in Nike's Licensed Apparel division. REICHERT

was terminated in July 2014.

3. At all times relevant to this Indictment, REICHERT lived and worked in the St.

Louis, Missouri, metropolitan area.

4. At all times relevant to this Indictment, Nike's Licensed Apparel division

booked purchase orders from wholesale customers on a computer system using JBA enterprise

Revised 03/2017
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software ("the IBA System"). The IBA System ran on servers located in Foothill Ranch,

California.

5. When a Nike warehouse fulfilled purchase orders booked on the IBA System, that

system generated the corresponding sales invoice for the relevant customer and transmitted the

relevant sales data to Nike's SAP accounting servers over the Internet. At all times relevant to

this Indictment, Nike's SAP accounting servers were located in Beaverton, Oregon.

THE SCHEME

6. In February 2008, REICHERT and a partner, Paul Russo, founded and

incorporated JJL Sports Corp. ("JJL"), a retailer of athletic apparel in St. Louis, Missouri. That

same month, JJL purchased and began operating Fan-a-Mania, another athletic apparel retailer in

St. Louis that had a preexisting wholesale account and credit line with Nike's Licensed Apparel

division.

7. REICHERT managed both Fan-a-Mania's and JJL's accounts for Nike, but he did

not disclose his ownership interest in those entities to Nike Inc. In order to conceal that interest,

defendant repeatedly forged the signature of his business partner, Paul Russo, on checks made

payable to Nike Inc. for Nike merchandise sold by defendant to Fan-a-Mania and JJL.

8. As the senior account executive for these accounts, REICHERT was responsible

for entering orders into the IBA System. The IBA system assigned a default discount rate to

every Nike customer-typically between three and seven percent, depending on the customer's

size and standing-but REICHERT was able to override the default discount on orders that he

entered.

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9. Beginning not later than November 2012, REICHERT began overriding the

default discount rate for sales to JJL aud Fan-a-Mania without authorization in order to sell those

retailers-and by extension himself-Nike merchandise at discounts ranging from twenty-five to

sixty-five percent. These discounts were typically five to ten times greater thau Nike allowed for

even its best wholesale customers. Accordingly, JJL and Fan-a-Mania enjoyed prices for Nike

merchandise that were far lower than Nike intended or allowed.

10. From on or about November 2012, through on or about May 2014, in the District

of Oregon and elsewhere, REICHERT, with the intent to defraud, devised the above-described

material scheme and artifice to defraud aud obtain property by materially false and fraudulent

pretenses, representations, aud promises.

COUNTS 1-2
(Wire Fraud)
(18 u.s.c. 1343)

11. On or about each of the dates set forth below, in the District of Oregon aud

elsewhere, defendant DAVID REICHERT, for the purposes of executing the scheme described

above, caused to be transmitted by means of wire communication in interstate commerce the

signals and sounds described below for each count, each transmission constituting a separate

count:

Ill

III

Ill

Ill

111

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COUNT ORDER NATURE OF INTERSTATE NEXUS

# DATE TRANSMISSION AND DATE OF
TRANSMISSION
1. April 24, Electronic transmission of sales data From Nike's JBA System
2013 pertaining to Nike invoice number servers in Foothill Ranch,
4457860, booking sale of item bearing California, to Nike's SAP
SKU #00024875XTG1LRG to Fan-a- servers in Beaverton,
Mania for $5.60 apiece, reflecting a Oregon, on or about April
discount of 60% off Nike's wholesale 26, 2013.
price of $14.00 and a unit price 52%
lower than REICHERT gave any other
customer between January 30, 2013, and
May 10, 2013.
2. April 25, Electronic transmission of sales data From Nike's JBA System
2013 pertaining to Nike invoice number servers in Foothill Ranch,
4460860, booking sale of item bearing California, to Nike's SAP
SKU #0002413 lXCRlXLG to Fan-a- servers in Beaverton,
Mania for $6.00 apiece, reflecting a Oregon, on or about April
discount of60% offNike's wholesale 29, 2013.
price of$15.00 and a unit price 57%
lower than REICHERT gave any other
customer between February 1, 2013, and
April 30, 2013.

All in violation of Section 1343 of Title 18, United States Code.

FORFEITURE ALLEGATION

12. Upon conviction of Counts One and Two of this Indictment, defendant DAVID

REICHERT shall forfeit to the United States, pursuant to 18 U.S.C. 98l(a)(l)(C) and 28

U.S.C. 2461 (c), any property constituting or derived from proceeds obtained directly or

indirectly as a result of said offenses.

13. If any of the above-described forfeitable property, as a result of any act or

omission of the defendant DAVID REICHERT:

(a) cannot be located upon the exercise of due diligence;

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(b) has been transferred or sold to, or deposited with, a third party;

(c) has been placed beyond the jurisdiction of the court;

(d) has been substantially diminished in value; or

(e) has been commingled with other property which cannot be divided without

difficulty; it is the intent of the United States, pursuant to 21 U.S.C. 853(p) as incorporated by

18 U.S.C. 982(b), to seek forfeiture of any other property of defendant REICHERT up to the

value of the forfeitable property described above.

i, \
Dated this _j_j__ day of July 2017.

A TRUE BILL.

OfFICIATING FOREPERSON

Presented by:

BILLY J. WILLIAMS

W. BOUND , OSB #00012

Ass stant United States Attorney

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