A Corning woman was arrested in Dublin on suspicion of being involved in a refund fraud scheme last week, U.S. Attorney McGregor W. Scott announced.
The warrant was issued last week after a federal grand jury returned a 14-count superseding indictment against Sabrina Raylene Toilolo, 26, and her previously charged co-defendant Johnathon Ward, charging them on suspicion of conspiracy to commit wire fraud, wire fraud, and aggravated identity theft.
Toilolo and co-defendants Johnathon Ward, Monica Nunes, and Talalima Toilolo conspired to defraud financial institutions using a refund-fraud scheme.
The indictment alleges the scheme caused at least $3.5 million in intended victim losses.
Nunes and Talalima Toilolo have pleaded guilty in the case and have been detained pending sentencing. Charges against Ward are pending.
Scott said the scheme exploited the refund process used by businesses and retail establishments to pay back customers for returns, reimbursements, and erroneous charges, state court documents. 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.
Court documents reveal one of the suspects’ alleged victims is a business in Chico, Diamonds.
The defendants committed this scheme by stealing or purchasing point-of-sale 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 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.
If convicted, Sabrina Toilolo faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire fraud and conspiracy to commit wire fraud. Additionally, if convicted of aggravated identity theft, she faces a mandatory two-year prison sentence, to be served consecutive to any other sentence, and an additional $250,000 fine. Any sentence, however, would 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.
This case is the product of an investigation by the Regional Enforcement Allied Computer Team (REACT) Task Force, which includes investigators from the Santa Clara County District Attorney’s Office, and the Federal Bureau of Investigation. Special Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.