Tehama County Woman Pleads Guilty in Refund Fraud Scheme

In June 2020, a federal grand jury returned a 14-count superseding indictment against her and her previously charged co-defendant Johnathon Ward, charging them with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft.

According to court documents, between July 2017 and September 2019, Sabrina Toilolo, Johnathon Ward, Monica Nunes, and Talalima Toilolo conspired 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. The defendants 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.

Sabrina Toilolo is scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on September 23, 2021. She faces a maximum statutory penalty of 20 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.

On April 2, Nunes was sentenced to 12 and a half years in prison.  On February 11, Talalima Toilolo was sentenced to10 years in prison. Charges against Ward are pending. The charges are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.