Is Mattress Firm a front?
Apart from different allegations and some accounting irregularities, no clue or evidence was found that can prove Mattress Firm a front for any money laundering or involvement in any illegal business.
Conspiracy theories have appeared in different companies of every age. Mattress Firm has also been the victim of similar allegations that have put its business in question.
Department of Justice indicted their founders on criminal fraud charges. After hearing this, everyone wondered, “Is Mattress Firm a front?”
Mattress Firm, which was launched in 1986, is the biggest mattress company in the number of stores in the United States. The company has also become America’s largest mattress retailer in a short period.
However, some people believe Mattress Firm has ulterior motives. Are they saying that it’s a front to some sinister plot? Well, not exactly. But its expansion is extraordinary and connected with many dubious things. It is unclear whether it is a front for more serious activities behind the scenes.
To answer these questions, we mention the allegations against this company to reach the right conclusion.
What is Mattress Firm?
Mattress Firm Inc. is an American mattress store chain founded in 1986. Paul Stork, Steve Fendrich, and Harry Roberts were the founders of this company.
The founders opened their first store because they could not find a mattress they liked that was affordable to them. The first Mattress Firm location opened in Houston on July 4, 1986. In 1996, the company went public.
In addition to mattresses, the company sells bedding and other sleep-related items such as pillows, sheets, and comforters. The company has its corporate headquarters in Houston, Texas, and offers its products at over 2100 retail locations across the United States.
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Mattress Firm and Money Laundering Case:
According to The Washington Post and the New York Times, Mattress Firm has been accused of money laundering by a former employee.
The accusations were made by whistleblowers—two former employees who said they saw the mattress retailer taking cash from customers in exchange for money orders that could be used as payment toward their rent.
The whistleblowers claimed that company managers then helped the customers deposit these money orders at banks near their homes. The banks would then give half of the money back to the mattress stores, which kept a portion and returned the rest to the original customer.
At the time of this happening, the Mattress firm had not yet been publicly traded, but since then, the company has been under investigation for possible violations of federal law.
In addition to allegations of money laundering for consumers, Investigative agencies also scrutinized the Mattress firm for its bill collection methods.
Specifically, whether it was using aggressive lending tactics against consumers whose original I didn’t have the money or those who had already paid their bills.
This was a common practice among other organizations that have pointed out. It’s also increasingly being scrutinized by regulators and class-action lawsuits.
Mattress Firm and Bribe / Kickbacks Allegations
Mattress Firm, a Texas-based mattress retailer, may have committed Bribery, Kickbacks, and Fraud. The firm has been blamed for making unlawful payments to mattress sellers.
The allegations against Mattress Firm involve reports that the company bribed retailers in charge of selling its products. This happened between 2012 and 2017. The bribes included giving gift cards to the retailers when they met sales goals or giving them discounts on mattresses.
The company may have also asked some retailers to return unsold merchandise to its headquarters. The allegations were made in two separate lawsuits against Mattress Firm: one filed by the Justice Department and another by several states, including California, Ohio, and Pennsylvania.
Mattress Firm denies the allegations. It says it did not ask for or receive bribes from anyone. It says it did not tell any of its retailers to return unsold mattresses to its headquarters.
And it says that most of the people making accusations against it have never worked for it or do not know about its policies for dealing with retailers.
But even if Mattress Firm’s denials are true, these allegations have already hurt the company’s reputation and cost its customers. Its stock price has fallen 14% since the lawsuit was filed in May 2018.
Involvement in Real Estate Fraud:
The U.S. Attorney’s Office and the FBI are currently investigating claims that Mattress Firm has been involved in a real estate fraud scheme.
The allegations stem from questionable loans between the mattress company and its suppliers, who have been the target of a previous lawsuit for fraud and other unethical business practices.
A former Mattress Firm employee came forward to clarify the situation after being laid off for refusing to participate in fraudulent activities.
Although the company has denied any wrongdoing and filed a counter-suit against the ex-employee for defamation, several red flags suggest that this issue may be far from over.
The news of Mattress Firm’s bankruptcy filing came as a surprise to many people. The company operated 1,225 locations in 48 states and had been in business for almost 40 years. What brought the company down?
The company decided to file for bankruptcy after it got into a dispute with its largest supplier, Tempur Sealy International.
Mattress Firm had ordered $335 million of product from Tempur Sealy over the last three years, but Tempur Sealy said it was owed $200 million. The article doesn’t say why Mattress Firm didn’t simply pay its bills, but the outcome of its decision is that it now has no product to sell in its stores.
Final Verdict On Is Mattress Firm a Front?
Conspiracy theories are always fun, and when they don’t involve aliens or the government, they’re great for a laugh—but it’s easy to lose track of what’s going on here.
However, some irregularities have been exposed by competitors, analysts, and journalists. None of these activities involved money laundering or other financial crimes, as some people on Reddit have claimed.
Instead, they were mainly accounting problems, such as inflating revenues by delaying payments to suppliers, using consignment stores (stores that pay when they sell a product) instead of paying rent for more than 10 years in some cases, and booking fees as profits instead of costs to manipulate revenue per store and thus artificially inflate their stock price, etc.
While none of these activities involved money laundering, they make some people think twice before they next visit one of their stores, especially around this time when mattresses are flying off the shelves.
There’s no doubt that mattress firm conspiracy theories are interesting ones to follow, but if you’re still wondering whether this is just a bunch of crazy talk, you might want to give them a call yourself before you lay down any cash.