Defendant in Refund Fraud Scheme Sentenced to 10 Years in Prison

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Scheme Conducted from Hotels and Motels Throughout Northern California

SACRAMENTO, Calif. Feb. 11 (News India) – Talalima Toilolo of Salt Lake City was sentenced today to 10 years in prison for a conspiracy to commit a bank fraud scheme that attempted to defraud financial institutions of more than $3.8 million, U.S. Attorney McGregor W. Scott announced.

Toilolo was also ordered to pay $827,369 in restitution to victims of the refund fraud. This amount reflects the amount that the defendants received from the scheme.

According to court documents, between June 2018 and February 2019, Talalima Toilolo, 44, conspired with Johnathon Ward and Monica Nunes 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. They 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.

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.

Nunes has pleaded guilty and is scheduled to be sentenced on March 18. 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 charges are still pending against Ward and S. Toilolo. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

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