(Update: “How Cops Cracked This Multimillion-Dollar Counterfeit Coupon Case“)
Investigators in the Houston, Texas area have announced the discovery of a multimillion-dollar coupon fraud ring involving at least 87 suspects in 23 states. And what they’ve learned so far, could be just the beginning.
The Montgomery County Sheriff’s Office announced their findings in a late-afternoon news conference yesterday, which they convened for the apparent purpose of announcing that they were donating items they seized during the investigation, to local nonprofit groups.
That’s good news for the local nonprofits. But only later did the sheriff’s office drop the big detail that “preliminary results from a clearinghouse that processes valid coupons for retailers have documented more than $9.7 million in losses, and project there could be another $10 million in losses as the investigation continues.”
Flanked by representatives of the nonprofits, and standing behind tables full of various personal care and cleaning items, Captain Tim Holifield said the investigation began late last year, when asset protection representatives from Walgreens contacted the department about suspected counterfeit coupons used in local stores.
Using the counterfeit coupons in question, “one individual purchased items valued at $200,000 in one year’s time, and that’s what initiated the investigation,” Holifield said.
Investigators discovered that the fraudulent coupons were being sold on various online social media sites, and traced their origin to several locations in Montgomery and surrounding counties. A search of those locations turned up “a printing house, which is almost like a sweatshop, where literally they had a number of computers lined up and printers and they were just going through the ink and the tape, just continuing to mass produce these coupons,” Holifield explained. Investigators ultimately concluded that “a criminal organization created these sophisticated counterfeit coupons.”
The sheriff’s office says three local residents, Cassandra Clark, Sheilo Cruz and Rudolph Cruz, were arrested and charged with engaging in organized criminal activity, though court records indicate that the local charges against them have since been dismissed. The FBI and federal prosecutors’ office have now picked up the investigation and will be announcing their own charges once they’re formally filed. Altogether, dozens of individuals “spread across 23 states from Washington to West Virginia” are now the subjects of “an ongoing case that will probably likely identify even more individuals,” Holifield said. It’s not clear whether all of those individuals were involved in creating and selling the coupons, or if they were buyers who used the coupons themselves.
Now that they’ve handed off the investigation, the local sheriff’s office is handing out some of the proceeds of the perpetrators’ crimes. “The sheriff has asked Commissioners Court to allow the Sheriff’s Office to disperse those items to these nonprofit groups, to help those people within our community who are down on their luck,” Holifield said. Spread out on the tables before him were just some of the 4,000 items, valued at some $40,000, that were seized during the investigation. All were believed to have been purchased with counterfeit coupons at local stores including Walgreens, Walmart, H-E-B, Target and Kroger.
As prosecutors prepare their case and prepare to release more details about how the suspects carried out their crimes, Holifield pointed out that the social media groups in which the coupons were being sold have since been shut down. “But like many criminal enterprises, one shuts down today, another opens up tomorrow,” he warned.
And that’s something the coupon industry knows all too well – the fight against coupon crime will never end. But for now, at least, they can celebrate the fact that dozens of suspects across the country are now out of the counterfeit coupon business – hopefully for good.
Image source: Montgomery County Sheriff’s Office
