Michael Jerry Phanor, Wire Fraud and Money Laundering, Florida 2024

Five Men Indicted in Nationwide Refund Scheme

Miami – A federal grand jury in Miami has returned a 22-count indictment charging five men in connection with a novel nationwide fraud and money laundering scheme that exploited payment processors and financial technology systems to generate millions of dollars in bogus refunds.

The defendants, Michael Jerry Phanor, 35; John Ngotho, 33; William Lopes, 35; Armani Amado, 28; and Henry Nunez, 27, are charged with wire fraud and money laundering offenses. According to the indictment, an earlier-filed criminal complaint affidavit, and statements made during initial court hearings, the defendants conspired with others to manipulate refund transactions at retail chains across the United States.

It is alleged that the defendants used a "split-tender" method to purchase merchandise with two debit cards. They then returned the merchandise, securing a refund to the first card while intentionally stalling the process for the second refund by presenting the wrong card, entering incorrect pin numbers, or feigning calls to financial institutions. By holding the refund transaction open, the defendants triggered repeat refund signals, causing multiple credits to be issued to the first debit card.

While one conspirator conducted the staged return in-store, others monitored the account associated with the first card, quickly withdrawing and transferring funds. After receiving multiple refund credits, the defendants terminated the return and brought the merchandise to other store locations to repeat the process. This scheme allowed the conspirators to generate tens of thousands of dollars in fraudulent credits from a single purchase.

The charged scheme was carried out at dozens of stores nationwide, including Miami, Tampa, New York City, Chicago, Phoenix, and Southern California. Law enforcement has traced $1.5 million in fraudulent refund credits and continues to identify additional accounts and transactions.

The defendants flaunted their proceeds on social media, showcasing private jet travel, luxury vehicles, and bottle service at exclusive clubs, and referring to themselves as the "Money Grows On Trees" collective. On Aug. 26, Phanor, Ngotho, Lopes, and Nunez were arrested during the execution of search warrants at two luxury penthouse apartments in downtown Miami.

Ngotho, a citizen of Kenya, and Phanor, a citizen of Haiti, are subject to deportation if convicted.

The case is being prosecuted by Assistant U.S. Attorney Sterling M. Paulson and Special Assistant U.S. Attorney Melissa Roca Shaw.

An indictment contains mere allegations, and all defendants are presumed innocent unless and until proven guilty in a court of law.

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