NEW YORK (Reuters) - A confidential internal audit has revealed that a senior executive at a major toy retailer allegedly manipulated inventory records and embezzled funds through a systematic fraud scheme, in what authorities are calling the "bricks and minifigs scandal."
WHAT: The scandal involves the alleged theft of over $2 million worth of collectible LEGO sets and minifigures over a three-year period, with the executive reportedly using a shell company to resell the items on secondary markets.
WHO: The Federal Bureau of Investigation (FBI) has identified John Harrison, 47, former Vice President of Operations for Toy Haven Inc., as the primary suspect. Harrison was arrested Tuesday at his Manhattan apartment.
WHERE: The fraudulent activities occurred primarily at the company's flagship distribution center in Secaucus, New Jersey, although investigators suspect additional locations may be involved.
WHEN: The scheme allegedly ran from January 2020 to December 2023, with losses only discovered during a routine quarterly audit last month.
WHY: According to court documents, Harrison allegedly exploited a loophole in the company's outdated inventory tracking system, which allowed him to mark rare "bricks and minifigs" as damaged or discarded, then reroute them for personal profit.
HOW: Authorities say Harrison used over 50 fake invoices and a network of online auctions to liquidate the stolen collectibles, including a rare Star Wars minifigure valued at $5,000.
The company has since implemented new security protocols and stated it is cooperating fully with the federal investigation. Harrison faces charges including wire fraud and money laundering, with a court appearance scheduled for next week.