• Thu. Apr 22nd, 2021

Second Defendant in Retail Refund Fraud Scheme Sentenced

Second Defendant in Retail Refund Fraud Scheme Sentenced

Second Defendant in Retail Refund Fraud Scheme Sentenced to 12½ Years in Prison

SACRAMENTO, CA (STL.News) A former resident of Union City was sentenced Thursday by U.S. District Judge Morrison C. England Jr. to 12 years and seven months in prison for a conspiracy to commit a bank fraud scheme that attempted to defraud financial institutions of more than $4.3 million, Acting U.S. Attorney Phillip A. Talbert announced.

According to court documents, between July 2017 and February 2019, Monica Nunes, 41, conspired with Johnathon Ward and Talalima Toilolo to defraud financial institutions using a scheme that exploited the merchant refund process used by businesses and retail establishments to refund customers for returns, reimbursements, and erroneous charges.

The defendants committed this scheme by stealing or purchasing point-of-sale (POS) terminals used by businesses to process bankcard transactions.  The defendants programmed each terminal to make it appear as if it was authorized by a particular retail merchant, connected the terminals to payment processing intermediaries, and executed refund transactions even though no purchases had been made.  The payment processors, falsely believing the terminals were authorized, approved the refunds and caused the merchants’ payment processors to transfer funds to the defendants’ fraudulent accounts.  The defendants then drained the stolen funds from the accounts and distributed them among members of the conspiracy.

Nunes has extensive experience with refund fraud and served as an organizer and manager over the conspiracy.  She taught other members how to use POS terminals to defraud merchants and their banks.  For example, in July 2017 while she was incarcerated, she mailed letters to co?conspirators, teaching them how to use POS terminals to perpetrate the scheme and advising them to connect with one of the defendants.

Judge England also awarded over $1.7 million in restitution to victims of Nunes’s refund fraud.  This amount reflected proceeds that the conspiracy was able to successfully withdraw from accounts that were funded by the fraudulent refunds.

This case is the product of an investigation by the Federal Bureau of Investigation and the Regional Enforcement Allied Computer Team (REACT) Task Force, which includes investigators from the Santa Clara County District Attorney’s Office.  Special Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.

On Feb. 11, 2021, Talalima Toilolo was sentenced to 10 years in prison for his participation in the scheme.  In July 2020, the government filed a superseding indictment in this case charging Johnathon Ward with multiple counts of conspiracy to commit wire fraud, wire fraud, and aggravated identity theft.  The superseding indictment also added Sabrina Toilolo who is the daughter of Talalima Toilolo.  These new charges are still pending against Ward and Sabrina Toilolo.  The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SOURCE: USDOJ.Today