FREE
2 Las Vegas 18-year-olds suspected in DHS murder arrested in Nevada
Husband, wife arrested on suspicion of sexual, physical abuse of minors
PG 02
PG 24
MONDAY, JANUARY 22- JANUARY 28, 2024
VISIT CORONANEWSPRESS.COM
How Walmart’s financial services became a fraud magnet
VOL. 8,
Homeless man admits setting 20,000-acre blaze near Banning
By Craig Silverman and Peter Elkind, ProPublica This story was originally published by ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.
Walmart. | Photo by Mike Mozart CC BY 2.0 DEED
C
hristy Browne was in a panic. The man on the phone said he was from the FBI. He warned her that drug traffickers had obtained her Social Security number and were using it to launder money. He said the FBI needed money to catch them. “They told me not to go to local law enforcement,” Browne testified in court recently about the February 2020 call. The police were watching her and considered her a suspect, the man said. At his direction, Browne, a retired elementary school teacher who lives in upstate New York, bought four $500 Walmart gift cards at her local Walmart. It was 3:15 pm. She took photos of the serial numbers and PINs on the back and texted them to the man on the phone. With that information, the fraudster had access to $2,000. That was only the first step. The gift card numbers were then sold to Qinbin Chen, a Chinese national living in Virginia. At 5:47 pm, Chen passed the numbers
to a co-conspirator waiting near a Walmart in Sterling, Virginia. Just eight minutes later, at 5:55, the accomplice did something that an ordinary consumer would rarely do, but which is routine for fraudsters: use one gift card to buy another. With the numbers from Browne’s Walmart cards, he purchased Apple, Google Play and other gift cards at the store’s selfcheckout kiosk. He sent the serial numbers and PINs for those cards to Chen, who then sold them to a buyer in China. Transferring the money to other companies’ gift cards for use in another country made it impossible for Walmart to figure out where the funds ended up. Browne had no way to recover her $2,000. She was far from the only victim. Chen oversaw the laundering of some $7 million in fraudulently obtained gift cards, according to the Department of Justice. It was a complex international operation involving hundreds of victims,
thousands of gift cards and multiple co-conspirators in the U.S. and China. Federal prosecutors would give it a simple name: “The Walmart scheme.” America’s largest retailer has long been a facilitator of fraud on a mass scale, a ProPublica investigation has found. For roughly a decade, Walmart has resisted tougher enforcement while breaking promises to regulators and skimping on employee training, according to more than 50 interviews, internal documents supplied by former industry executives, court filings and other public records. Scammers dupe a victim, as they did with Browne, and then they exploit Walmart’s lax systems to get paid quickly and easily. That’s been true whether the fraudsters use Walmart gift cards or instruct customers to send funds by electronic money transfer. The company, in the latter instance, is supposed to be on the lookout for fraud and asking questions: Do you know the person you’re
sending money to? Is the money transfer related to a telemarketing offer? Too often, Walmart has failed. More than $1 billion in fraud losses were routed through the company’s financial systems between 2013 and 2022, according to filings by the Federal Trade Commission and court cases analyzed by ProPublica. That has helped fuel a boom in financial chicanery. Americans, many of them elderly, were swindled out of $27 billion between 2013 and 2022, according to the FTC. Walmart has a financial incentive to avoid cracking down. It makes money each time a Walmart gift card is used and earns a fee when another brand of card is bought. And it receives one commission when a person sends a money transfer and a second when the recipient picks it up. The company’s financial services business generates hundreds of millions in annual profits. (Its See Walmart Page 12
NO. 156
By City News Service
T
he 58-year-old transient who ignited the 2013 Silver Fire near Banning, which blackened more than 20,000 acres and injured multiple people, pleaded guilty Wednesday to over a dozen felony charges and was immediately sentenced to 16 years in state prison. During a hearing at the Banning Justice Center, Superior Court Judge Jorge Hernandez accepted Stephen Patrick Medlock’s plea and imposed the stipulated sentence, granting him credit for time served and a double credit required under state law to reduce prison overcrowding. The combined credits totaled almost 12 years, effectively reducing the defendant’s sentence to about four years. Medlock admitted 14 counts of burning an inhabited structure. He had originally been charged with 37 arsonrelated allegations. It was unclear Wednesday whether the defendant pled directly to the court, or had reached a negotiated plea with the Riverside County District Attorney’s Office. Medlock was arrested in San Bernardino County in 2018 following an extensive investigation by Cal Fire arson personnel and Riverside County sheriff’s detectives. The Silver Fire erupted on Aug. 7, 2013, sweeping through the foothills and mountains south of Banning deep into the See Homeless man Page 23
Colorado-based pharmaceutical company expands to Riverside County By Staff
P
harmaceutical firm Colorado Biolabs Inc. is expanding to Jurupa Valley, county officials announced Thursday. The move aims to improve the company’s manufacturing and laboratory testing capabilities, which county officials said would bring “innovation and economic growth” to the Inland Empire region. “As Riverside County’s Second District Supervisor, I welcome Colorado Biolabs, Inc. to Jurupa Valley,” County Supervisor Karen Spiegel said in a statement. “Their decision to establish a presence here is a testament to our county’s dedication to innovation and economic growth. This move promises significant local benefits, including job creation and community development, and reflects Colorado Biolabs’ commitment to progress and our county’s supportive environment for business and technological advancements. See Pharmaceutical company Page 24