Robert Kohlman, Credit Card Refund Scam, California 2020

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Table of Contents

Bay Area Men Charged in $400k Credit Card Refund Scam

Robert Kohlman, 38, and Gabriel Riddle, 34, both of Novato, Calif., have been charged with wire fraud in connection with a scheme to use dozens of fraudulently programmed credit and debit terminals to make unlawful transactions, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.

The criminal complaint, filed August 19, 2020, was accompanied by an affidavit filed by an FBI agent. According to the affidavit, Kohlman and Riddle obtained more than 90 point-of-sale terminals, which are devices used by merchants to read and process credit or debit cards to accept payments for goods or services.

Kohlman and Riddle then programmed the terminals to believe they were associated with an actual merchant, and then submitted requests for refunds even though there was no initial purchase. The merchant’s bank or processing company, believing a legitimate refund was being requested, then transmitted money to accounts controlled by Kohlman and Riddle.

Kohlman and Riddle then depleted the accounts by making purchases, making ATM cash withdrawals, or purchasing money orders. The affidavit indicates that Kohlman and Riddle initiated at least 100 fraudulent refunds that transferred more than $400,000 to their personal bank accounts.

The defendants allegedly used this scheme to defraud numerous victims around the country, including a U.S. Army Hospital dining facility. The affidavit describes transactions involving the dining facility at the Winn Army Community Hospital at Fort Stewart in Fort Stewart, Georgia, which is operated by the United States Army.

According to the affidavit, the dining facility was tricked into issuing a refund worth $7,925.03 on December 3, 2018, to a debit card controlled by Riddle and a second refund, on December 16, 2018, worth $9,989.39 to a debit card controlled by Kohlman.

The defendants face a maximum sentence of 20 years in prison, and a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.