Multiple Bay Area Residents Convicted And Sentenced For Forced Refund Fraud Scheme

SAN JOSE– Monica Mason, the lead defendant in a seven-defendant bank fraud conspiracy, was sentenced to 106 months prison and ordered to pay over $3 million in restitution for a wide ranging refund fraud conspiracy, announced United States Attorney David L. Anderson and FBI Special Agent in Charge, John F. Bennett.  The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge.

Mason, 40, of Oakland, pleaded guilty to the charges on August 14, 2019.  According to her plea agreement, Mason admitted that she, along with Brandon Bodine, Jennifer Prince, Katherine Baldridge, Raymundo Ramos, Lakhinder Singh, and Armida Ruelas, participated in a refund fraud scheme that is thought to have originated in the Bay Area around 2014 and has since spread to neighboring areas.  Pursuant to the scheme, fraudsters exploit the credit card refund process by using stolen or reprogrammed electronic point of sale (“POS”) terminals to “force” refunds from merchant bank accounts for products or services that were never actually purchased from the victim merchant.  The fraudulent refunds then are loaded to credit and debit cards controlled by the fraudsters, who spend the illicit funds via credit card charges, wire transfers, and ATM withdrawals from affiliated bank accounts.  These refund fraud schemes have caused significant disruption to banks and payment processors servicing the targeted merchants, who must divert resources and funds to investigate and remediate the financial losses suffered by their merchant clients.  The victims collectively report a total loss of over $20 million since authorities began to track this type of fraud in 2014.

In this case, Mason admitted in her plea agreement that in early 2016, she and her codefendants used a stolen POS terminal to launch refund attacks against several businesses and franchises located throughout the nation. Mason further admitted that the defendants loaded fraudulently obtained refunds onto debit and credit cards under their control.  The defendants registered some of the credit and debit cards in their own names and registered many cards in the names of other people using stolen identity information.  The defendants attempted to force over $525,000 in fraudulent refunds from various merchant bank accounts using one POS terminal alone.  Sixteen additional POS terminals were later recovered from a storage locker associated with Mason and Ruelas. 

In addition, Mason, Bodine, Baldridge, and Ruelas acknowledged in their publicly filed plea agreements that they were involved in a second refund fraud scheme that took place from mid-2017 to early 2018.  According to the plea agreements, Mason, Bodine, Baldridge, Ruelas and others caused over $3.5 million in fraud loss to a payment processor pursuant to this scheme.  They have all accepted responsibility for their conduct during the 2017-2018 time period and agreed to be sentenced based on the combined loss suffered by victims in both cases.

On February 8, 2018, a federal grand jury indicted Mason, Bodine, Prince, Baldridge, Ramos, Singh, and Ruelas, charging them for their respective roles in the conspiracy.  Mason was charged with conspiracy, nine substantive counts of bank fraud, unlawful possession of personal identification information, and aggravated identity theft.  Mason pleaded guilty to the conspiracy charge and the remaining charges were dismissed. 

As of January 22, 2020, all seven defendants have been convicted of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349.  The following five defendants have now been sentenced by the Judge Koh:

Prince and Singh have not yet been sentenced.

Assistant U.S. Attorney Marissa Harris is prosecuting the case with the assistance of Susan Kreider, Nina Burney-Williams, and Jessica Leung.  The prosecution is the result of an investigation by the R.E.A.C.T. Taskforce, a joint federal and state taskforce targeting identity theft crimes in the Bay Area that includes the Santa Clara County District Attorney’s Office and Berkeley Police Department.  Special Agents from the Federal Bureau of Investigation and the U.S. Secret Service also assisted the investigation.