MARYSVILLE — As five Snohomish County sisters shuffled at least $1 million in cash reaped through a long-running scam, they often filled in the “memo” line for their Zelle transfers, according to new federal charges.
“Your Cut.”
“Cut and Bags.”
“Dee cut.”
“Dee Cut From Today and Yesterday.”
This week, a federal grand jury indicted the five sisters for conspiracy to commit mail fraud and 24 counts of mail fraud each. They’re accused of taking advantage of exploitable online return policies at a “major active clothing retailer” over the past two years. The company is not identified in court papers, except that it has more than 700 locations around the world.
Four of the defendants, ages 25, 29, 32, 33, live in Marysville. One, age 27, resides in Stanwood. They were set to appear Thursday afternoon in U.S. District Court in Seattle, accused of carrying out the scheme by returning goods in Arizona, California, Colorado, Florida, Michigan, Nevada, Oregon and Washington.
The company had a fast-track return policy, where customers could send back merchandise in the mail and get refunds within two hours, up to three items at a time. The women would order “several purchases a week on average,” then scan the return label at a self-service counter in a post office, the charges say.
“As a result, (the company) issued refunds prior to receiving any actual returned merchandise,” according to the charges.
Often, investigators found, the sisters requested refunds before the items had even been delivered to their homes. Online refunds came in the form of gift cards. But the women didn’t actually send the items back, prosecutors wrote.
Instead, the sisters would return the merchandise to a brick-and-mortar store — traveling all around the country, often together, buying round-trip flights for each other — to get a second fraudulent refund, this time to their debit cards, the federal court papers say. They would allegedly use gift card credit to buy more goods, keeping the cycle going.
Federal prosecutors connected each sister to at least three instances of the scam.
In all, the sisters were accused of stealing at least $1 million.
“Refund fraud schemes such as this one simply drives up the costs for retailers and result in higher prices for the rest of us,” U.S. Attorney Tessa Gorman said in a written statement. “We will work with our law enforcement partners to shut these down and hold the perpetrators accountable.”
The case was being investigated by U.S. Homeland Security Investigations and the U.S. Postal Inspection Service.
After learning of the scheme, the retailer changed its return policies, according to the U.S. Attorney’s Office in Seattle.
Snohomish County court records suggest at least two sisters faced legal action over credit card debt in the past decade.
No defense attorneys were listed in their case file as of Thursday.
If convicted as charged, the crimes are punishable by up to 20 years in prison and a $250,000 fine.
Caleb Hutton: 425-339-3454; chutton@heraldnet.com. Twitter: @snocaleb.
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