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Call me a Fred
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http://9news.com/acm_news.aspx?OSGN...MPLATEID=0c76dce6-ac1f-02d8-0047-c589c01ca7bf

COLORADO SPRINGS - Investigators say a 32-year-old man who worked his way up from age 17 to manage two bicycle shops is suspected of stealing more than $400,000 in gear and selling it on eBay. <script> if (LinkCount>0){ var linkselement=document.getElementById("links"); if (linkselement!=null) { linkselement.style.visibility="visible"; } } else { var spanElement = document.getElementById("links"); if (spanElement != null) { spanElement.innerHTML = ""; } } </script> William Reese Hougton, 32, was arrested in November for thefts from Pro Cycling between 2003 and 2005 of $375,000, and that led to an investigation of his work at Colorado Cyclist. Now he is charged with stealing $70,025 worth of gear from Colorado Cyclist, said police detective Fred Walker.

Houghton made a preliminary appearance in court Thursday and will be back Wednesday at which time a judge will determine if there is enough evidence to go to trial.

Walker said Houghton made a profit of $44,549 from the stolen goods at Colorado Cyclist, based on his PayPal online payment account, which tracked his eBay sales. He sold heart-rate monitors, bicycles and other items, often below retail prices.

He had been hired at age 17 at Colorado Cyclist in 1991. "He was a success there, hired as a warehouse stock boy and worked his way up to general manager, the No. 2 man in charge," Walker said.

Although he was fired in December 2002 after the owner became suspicious, no charges were filed.

Hougton then persuaded a biking pal, Bruce McGrew, to open a bike shop. McGrew was unaware of what had happened at the other shop and opened Pro Cycling with Houghton.

An affidavit says that within six weeks of the opening of the shop Hougton began selling stolen items.

Michael Joe Kelty, 35, a friend of Houghton's and a former coworker from Colorado Cyclist, also was arrested in November. He was charged with stealing $8,400 worth of bicycles and parts last summer for himself and friends.

Both were fired but are free on bail.
 

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Banned
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I guess this explains why Colorado Cyclists selection of products has steadily gone down hill over the years.
 

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Soul Mining
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I remember reading about this story last year when it first came out. It's interesting to learn that he worked at Colorado Cyclist and ripped them off as well. Just how easy is it for someone in a position like general manager to rip off a company? Yikes.
 

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Bike mgr. stealing...

If there are no cks and balances, which most small, privately owned businesses don't have, it is very easy. That is why you really have to know who you are hiring, and these days, who knows. It's a real shame, what happened to honesty and character?
 

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remodeling...me
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Kerry Irons said:
At the risk of sounding both partisan and cynical, I believe that the K Street Project ate them alive. :)
Don't get this moved to PO !
That is a shame, I went to both bike shops when I was in CS visiting my bro. Sad to hear someone with such a cool job would take advantage. There are still tons of people out there with integrity but then there are the few we hear about who don't have it.
 

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Travels by Map
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As a former retail manager, this is not news. The biggest shrinkage in almost all retail chains is theft by employees, not theft by customers. Employees have way more theft opportunities than customers in most cases.
 

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What a jacka$$.

Most people who ride would kill for a job with a company that pays well and gets you huge discounts on gear.Stealing is lame.
 

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No team-cest unless 8+!
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that's kinda ridiculous. I think I read this a while ago in Bicycle Retailer.

MikeBiker said:
http://9news.com/acm_news.aspx?OSGN...MPLATEID=0c76dce6-ac1f-02d8-0047-c589c01ca7bf

COLORADO SPRINGS - Investigators say a 32-year-old man who worked his way up from age 17 to manage two bicycle shops is suspected of stealing more than $400,000 in gear and selling it on eBay. <script> if (LinkCount>0){ var linkselement=document.getElementById("links"); if (linkselement!=null) { linkselement.style.visibility="visible"; } } else { var spanElement = document.getElementById("links"); if (spanElement != null) { spanElement.innerHTML = ""; } } </script> William Reese Hougton, 32, was arrested in November for thefts from Pro Cycling between 2003 and 2005 of $375,000, and that led to an investigation of his work at Colorado Cyclist. Now he is charged with stealing $70,025 worth of gear from Colorado Cyclist, said police detective Fred Walker.

Houghton made a preliminary appearance in court Thursday and will be back Wednesday at which time a judge will determine if there is enough evidence to go to trial.

Walker said Houghton made a profit of $44,549 from the stolen goods at Colorado Cyclist, based on his PayPal online payment account, which tracked his eBay sales. He sold heart-rate monitors, bicycles and other items, often below retail prices.

He had been hired at age 17 at Colorado Cyclist in 1991. "He was a success there, hired as a warehouse stock boy and worked his way up to general manager, the No. 2 man in charge," Walker said.

Although he was fired in December 2002 after the owner became suspicious, no charges were filed.

Hougton then persuaded a biking pal, Bruce McGrew, to open a bike shop. McGrew was unaware of what had happened at the other shop and opened Pro Cycling with Houghton.

An affidavit says that within six weeks of the opening of the shop Hougton began selling stolen items.

Michael Joe Kelty, 35, a friend of Houghton's and a former coworker from Colorado Cyclist, also was arrested in November. He was charged with stealing $8,400 worth of bicycles and parts last summer for himself and friends.

Both were fired but are free on bail.
 

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this article ran last year. shame, it was a "friend" of the owner, who even gave him a second chance to rip him off which he did. greedy bastard.

Bike-shop workers accused of theft


By ANSLEE WILLETT THE GAZETTE

Two Colorado Springs bicycle-shop employees were arrested on suspicion of stealing more than $383,000 of merchandise, most of it sold on eBay, police said Thursday.

It’s one of the largest employee thefts to be investigated by Colorado Springs police, the 4th Judicial District Attorney’s Office said.

William Reese Houghton,

32, and Michael Joe Kelty, 34, are suspected of felony theft from Pro Cycling on Briargate Boulevard near Chapel Hills Mall.

Both were arrested Wednesday. Houghton, a former manager, was freed on $10,000 bail, and Kelty posted $1,000 bail.

Kelty is suspected of stealing $8,400 worth of bicycles and parts last summer for himself and friends, police said.

Houghton is suspected of stealing at least $375,000 worth of bicycles, parts and clothing since the spring of 2003, according to court papers released Thursday.

Houghton made $147,605 selling the goods on eBay, often below retail price, an arrest affidavit states. One bike that retailed for $5,100 sold for $2,555.

Houghton, who ran the shop’s daily operations, had worldwide customers, including in South Korea, Germany and New Zealand, police said.

“He was the fox in the henhouse, taking photos of stuff in the store and putting it on eBay, making it seem like the money was coming back to the store,” Colorado Springs police detective Fred Walker said.

Houghton allegedly pocketed all the money he made on the sales, spending some of it on lingerie, steak dinners, a health club membership and satellite radio, said police, who obtained his bank records.

Houghton and Kelty were fired in September because of the owner’s suspicion that they were stealing from him.

Pro Cycling owner Bruce McGrew opened the shop in April 2003 and hired Houghton as manager for a salary of $1,000 a week, McGrew said Thursday. The two met at a bicycle shop about six years ago.

“The biggest mistake is I trusted Reese because I thought he was a friend of mine,” McGrew said.

Houghton allegedly began selling the items online six weeks after Pro Cycling opened and used the shop’s FedEx account to ship them, the affidavit states.

McGrew became suspicious when the business lost money each year — $400,000 in 2003, $280,000 in 2004 and $110,000 in 2005.

Early this year, McGrew hired a consultant to see what was wrong, thinking the shop simply wasn’t organized well.

Houghton was fired initially in March for missing a deadline to place a company ad in the phone book, said McGrew, who was then unaware of the alleged thefts.

“His management skills were absolutely awful,” McGrew said. “Now in hindsight, I see why. He was running two businesses and putting the most priority on his.”

Houghton begged to be rehired, saying he put “his heart and soul in this business,” McGrew said. He got his job back the next day, but was demoted to salesman with a lower salary, McGrew said.

McGrew’s consultant, Mark Norris, took over as manager and instituted a process for ordering and tracking inventory.

Norris was out for two months because of surgery, and Houghton was in charge of ordering inventory, the affidavit states.

When Norris returned, he found inventory missing. He and McGrew suspected internal theft and called police.

Between September 2003 and September 2005, Houghton posted 525 items for sale on eBay and sold 361 of them, the affidavit states.

“Coincidentally, the bulk of the postings dropped off dramatically in late January 2005 at around the same time that Mr. McGrew brought in Mr. Norris,” Walker wrote in the affidavit.

Now, McGrew is more involved with the shop’s daily operations. He wants to keep the business afloat.

“It’s a pretty ugly little mess. We’re looking at a store that has hardly anything left and a bunch of bills we didn’t know we had and a slow season ahead,” he said.

“I’ve made a commitment to re-merchandise the store and get us to spring and see what the business can do without a fair amount of the inventory being sold on eBay.”
 

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Government Mule
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The really ridiculous part of this story is that by all accounts Houghton had the skills necessary to earn a good living without resorting to theft. He put a load of actual work into committing the crimes. It will be interesting to see what happens in the Enron situation.
 

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Yeah, I heard about the procycling theft last year, which is really sad, when I lived in CS I used to shop there all the time, and I had a bike built there, by guess who...... Anyways, it's sad that such a good shop, the best in CS imho, had this kind of problems. It looks like they are pulling through, and I hope they stay open. He stole "only" 70k from Colorado cyclist, which is a huge operation, but stole 375,000 from procycling where it's a much smaller operation. Anyways, I hope he gets what's comming to him, he always seemed alittle strange.
 

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stevee said:
The really ridiculous part of this story is that by all accounts Houghton had the skills necessary to earn a good living without resorting to theft. He put a load of actual work into committing the crimes. It will be interesting to see what happens in the Enron situation.
He was a pretty damn good mechanic...
 

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FTF said:
He stole "only" 70k from Colorado cyclist, which is a huge operation, but stole 375,000 from procycling where it's a much smaller operation.
Can someone explain this? All the shops I deal with are small enough that if $300 or 400K worth of goods disappeared it would be obvious. Was the owner completely oblivious to what inventory he should have had on hand?
 

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You're Not the Boss of Me
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Under ACrookedSky said:
Can someone explain this? All the shops I deal with are small enough that if $300 or 400K worth of goods disappeared it would be obvious. Was the owner completely oblivious to what inventory he should have had on hand?
Colorado Cyclist is not a small shop. They also do a huge catalog/internet business. So I assume that sheer size was a factor.
 

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Under ACrookedSky said:
Can someone explain this? All the shops I deal with are small enough that if $300 or 400K worth of goods disappeared it would be obvious. Was the owner completely oblivious to what inventory he should have had on hand?
the owner didn't run the shop and apparently never looked at the books either but he wondered why the shop lost $400k-2003, $280k-2004 and $110k-2005. the theif was charged for $375k of stolen merchandise. I guess thats the stuff they can link to him directly. there still alot of stuff unaccounted for. looks like the rest of staff may of been on the take too but haven't been caught. Must of been a really nice shop, few shops can lose that much money and still stay around.
 

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happens more than you think...

It always blows me away when people preach about how much cheaper stuff is on eBay and how bike store owners are crooks. Does it really make any sense at all that you would find stuff on eBay brand new and in the box for less than wholesale? How many people do you know out there who will drop $500 on a carbon crank and then without even mounting it on his/her bike decides that he/she will sell it on eBay for less than wholesale? The Colorado Cyclist example is one example of a single huge theft but I'm sure there's lots of shops out there that don't notice a couple cranks and the odd set of wheels disappearing from inventory and I bet you they more often than not end up on eBay. There is a distributor in Canada that lost about $70,000 worth of stuff or more to a warehouse worker who was selling on eBay. It happened over the period of a year and the employee was only caught when they did their year end and knew the numbers just didn't add up. $70,000 is easy to miss for the short term when you have $700,000 worth of inventory at any given time and you take it a little at a time.

Sure, sometimes there's new stuff on eBay being blown out but chances are if there's a brand new current model item being sold at a loss there's a pretty good chance you're buying something that was stolen either from a shop or a distributor and there's no good karma in that.
 
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