Sacramento-area woman convicted in bank fraud that cost $3.5 million in fake refunds
A 40-year-old Rancho Cordova woman faces a maximum sentence of 30 years in federal prison after her conviction in a fraud scheme that cost merchant banks at least $3.5 million in phony refunds, the U.S. Attorney’s Office in Sacramento announced Monday.
Monica Nunes on Thursday pleaded guilty to conspiracy to commit bank fraud, according to a news release from the U.S. Attorney’s Office. The federal prosecutors said Nunes conspired to defraud financial institutions using a scheme called “refund fraud” or “force post refund fraud.”
The scheme exploits the merchant refund process used by businesses and retail stores to pay back customers for returns, reimbursements and erroneous charges.
Prosecutors said Nunes and her co-conspirators posed as merchant businesses and executed fraudulent debit or credit card refunds, which sent money from a merchant bank account to accounts belonging to the conspirators.
Nunes and two other defendants in this case allegedly stole or purchased point-of-sale terminals that were once used by businesses to process bankcard transactions. They programmed each terminal to make it appear as if it was authorized by a merchant business, connected the terminals to payment processing intermediaries and executed refund transactions, even though no purchases had been made, according to prosecutors.
The payment processors falsely believed the terminals were authorized and sent refunds from the merchants’ banks to the defendants’ accounts, prosecutors said. The indictment alleges that this scheme caused at least $3.5 million in losses.
Johnathon Ward and Talalima Toilolo are listed as co-defendants in this case. Their charges are still pending.
U.S. District Judge Morrison C. England Jr. has scheduled Nunes’ sentencing for Aug. 6. Along with the maximum sentence of 30 years in federal prison, the judge could order Nunes to pay a $250,000 fine.
