Many retail stores offer rewards programs to entice potential customers to shop at their stores and to encourage loyalty among shoppers who have previously visited the store. In some retail locations, the rewards programs may provide coupons and other incentives to return to the store. In other cases, the rewards programs may offer store credit that can be used as if it was cash.  

These rewards programs work because the discounts are accounted for in non-sale prices that the consumer has previously made. However, some consumers have come up with creative strategies to maximize the savings so that they can obtain a bargain or a deal. While many of these strategies are perfectly within the rules of the program, some individuals take their strategy too far and cross the line between being savvy shoppers and outright fraud.

If you or a loved one have been accused of committing retail fraud, a aggressive and strategic Atlantic City criminal defense lawyer of the Law Offices of John J. Zarych can fight to protect your freedom.

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Couple Faces Criminal Charges For Kohls’s Cash Retail Fraud

Kohl’s Cash is one of the more generous rewards programs in the retail industry. Through the program, shoppers can earn $10 credit for every $50 they spend in the store. As such, shoppers can quickly accumulate significant amounts of rewards dollars that can be used to purchase any merchandise in the store. Unfortunately, the Kohl’s cash program, like many rewards programs that use sequential rewards identification numbers, was vulnerable to hacking.

According to their guilty plea entered in federal court, Pavan Gurram and Vanaja Gattupalli used electronic means to defraud the rewards program. Gurram is a computer programmer and apparently noticed the pattern in how Kohl’s assigns identification numbers to its rewards cash. Gurram then wrote a computer program that would calculate the numbers of legitimate rewards certificates issued to other customers. Gurram and Gattupalli would then use the fraudulently obtained rewards certificates to obtain goods from Kohl’s. The couple would then resell or keep the merchandise.

In all, the couple fraudulently obtained and utilized the rewards benefits of more than 7,000 legitimate customers during the time period of June 2014 to June 2015. In all, the couple stole nearly $600,000 in rewards cash.

What Charges and How Much Jail Time Can I Face for Rewards Fraud?

In the criminal matter described above, the individuals faced federal criminal charges because their electronic theft by computer was accomplished across state lines.  Each were indicted on 10 counts of federal wire fraud. Under 18 U.S. Code § 1343 – Fraud by wire, radio, or television, when an individual:

intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice.

In other words, individuals who make use of a desktop computer, smartphone, telephone or any other electronic means to commit fraud can face serious penalties. The wire fraud statute even extends to fraudulent schemes advanced by the use of television or radio broadcast. Individuals who violate this statue can face up to 20 years in prison along with fines. Furthermore, it is common for retailers to seek restitution for the value of the goods or services fraudulently obtained.

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Depending on the method of retail fraud there are a number of other charges an individual in New Jersey could theoretically face. Under New Jersey law a person might face charges under:

  • 2C:20-4. Theft by deception
  • 2C:20-8. Theft of services
  • 2C:20-25 Computer criminal activity

Furthermore, if the retail theft is carried out in-person in a retail store it is possible a person could be charged with violating 2C:20-11 Shoplifting. Depending on the value of the stolen goods, shoplifting can be charged as either a disorderly persons offense or as an indictable offense. Indictable offenses are the New Jersey equivalent of a felony and can carry lengthy prison sentences.

Facing Charges of Retail Fraud or Shoplifting in New Jersey?

If you or a loved one are facing charges for a fraud carried out upon a retail store or for shoplifting, the experienced South Jersey criminal lawyers of the Law Offices of John J. Zarych can fight for you. To schedule a free and confidential consultation call us at (609) 616-4956 or contact us online today.