Korean National Sentenced to Almost 2 Years in Prison for “Bust Out” Bank Fraud Scheme in Sacramento Area and Elsewhere
SACRAMENTO, Calif. — Monica Nunes, 40, of formerly of Rancho Cordova, pleaded guilty Thursday to conspiracy to commit bank fraud, U.S. Attorney McGregor W. Scott announced.
According to court documents, Nunes and her co-defendants, Johnathon Ward and Talalima Toilolo, conspired to defraud financial institutions using a scheme called “refund fraud” or “force post refund fraud.” This scheme exploited the merchant refund process used by businesses and retail establishments to pay back customers for returns, reimbursements, and erroneous charges. The defendants posed as merchants and executed fraudulent debit or credit card refunds, which caused the unauthorized transfer of money from a merchant bank account to an account under the defendants’ control.
The defendants committed this scheme by stealing or purchasing point-of-sale (POS) terminals that were used by businesses to process bankcard transactions. The defendants programmed each terminal to make it appear as if it was authorized by a particular 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’ banks to transfer funds to the defendants’ accounts. The defendants then drained the stolen funds from the accounts. The indictment alleges that this scheme caused at least $3.5 million in intended losses.
This case is the product of an investigation by the Regional Enforcement Allied Computer Team (REACT) Task Force, which includes investigators from the Federal Bureau of Investigation and the Santa Clara County District Attorney’s Office. Special Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.
Charges are pending against Ward and Toilolo. The charges are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Nunes is scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on Aug. 6. Nunes faces a maximum statutory penalty of 30 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.