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Samoan man in Utah charged with bank fraud and conspiracy

Federal District Court Building in Salt Lake City, Utah.
Court records say the scheme resulted in a loss of more than $3M for the victims

Salt Lake City, UTAH — A Samoan man who resides in Utah, along with two people from California, are facing a 12-count indictment, accusing the trio of conspiring to defraud financial institutions using a scheme called “refund fraud” or “force post refund fraud”  that resulted in the loss of more than $3 million to victims, according to US prosecutors and court documents filed with the federal court in Sacramento, CA.

The indictment, handed down last Thursday, charges Talalima Toilolo, 44, of Salt Lake City, UT along with Johnathon Ward, 40, and Monica Nunes, 39 — both of California — with conspiracy to commit bank fraud and bank fraud. The indictment further charges Ward and Nunes with aggravated identity theft.

Toilolo was arrested Wednesday in Salt Lake City, based on a criminal complaint and arrest warrant without bail issued by the federal court in Sacramento, according to court documents.

He made his initial appearance last Friday morning at the federal court in Salt Lake City, presided over by US Magistrate Judge Paul M. Warner, who ordered the defendant “detained and remanded” to the U.S. Marshal Service pending transfer to Sacramento, according to court documents.

 “The court finds that the defendant is a threat of non-appearance as well as a danger to the community.”

In court documents, prosecutors explained that the “refund fraud” scheme exploited the refund process used by businesses and retail establishments to pay back customers for returns, reimbursements, and erroneous charges.

According to the indictment, 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.

The defendants allegedly committed this scheme - which occurred early last year — by stealing or purchasing point-of-sale (POS) terminals that are 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.

 “In all, the conspirators caused and intended to cause victims to lose over $3.5 million,” according to the indictment, which detailed the amount of money lost by the victims — the financial institutions — and the specific dates.

According to court documents, Ward and Nunes  were — at times — operating the scheme out of hotel rooms in Northern California. The separate criminal complaint filed last Wednesday against Toilolo also details the alleged scheme, and identifies alleged specific acts committed by Toilolo as part of the scheme.

The complaint alleges that Toilolo was involved in the scheme between June 1, 2018 until at least Feb. 1, 2019 in northern California and elsewhere.

If convicted, Ward, Nunes, and Toilolo each face a maximum statutory penalty of 30 years in prison and a $1 million fine for each count of bank fraud and conspiracy to commit bank fraud, according to prosecutors.

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.

The US Justice Department noted that the charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.