Federal Grand Jury In Miami Indicts Five Men Operating A Nationwide Refund Glitch Scheme
The feds have busted five men with operating a novel in connection with a novel nationwide refund glitch scheme. The scheme exploited payment processors and financial technology systems to generate millions of dollars in bogus refunds.
A Miami grand jury returned a 22-count indictment charging the men with money laundering. The scheme exploited payment processors and financial technology systems to generate millions of dollars in bogus refunds.
The five men are Michael Jerry Phanor, John Ngotho and William Lopes. In addition, authorities have also charged Armani Amado and Henry Nunez. Federal authorities have charged the five men with wire fraud and money laundering. The indictment states an earlier-filed criminal complaint affidavit and other statements saying the defendants manipulated refund transactions at retail chains.
The Five Men Used The Split-Tender Method To Commit Their Scam
Prosecutors allege the men used a “split-tender” method to purchase merchandise with two debit cards. They then returned the merchandise and secured a refund to the first card. Meanwhile, they intentionally stalled the process for the second refund. They did this by presenting the wrong card and by entering incorrect pin numbers. They would also feign calls to financial institutions. The defendants triggered repeat refund signals by holding the refund transactions open. This caused the bank to issue multiple credits to the first debit card.
One conspirator conducted the staged return in-store. The other co-conspirators monitored the account associated with the first card. They would then quickly withdraw and transferring funds. After receiving multiple refund credits, the defendants terminated the return. Afterwards, they 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 five men carried out the scheme in various retail outlets in Miami, Tampa and New York City. In addition, they defrauded stores in Chicago, Phoenix, and Southern California. Law enforcement has traced $1.5 million in fraudulent refund credits to the five men. The FBI continues to identify additional accounts and transactions.
The five men flaunted their proceeds on social media. They showcased private jet travel and luxury vehicles. In addition, they also boasted about bottle service at exclusive clubs. They referred to themselves as the “Money Grows On Trees” collective.
Police arrested on Phanor, Ngotho, Lopes, and Nunez on August 25, 2025. Authorities made the arrest after the execution of search warrants at two luxury penthouse apartments in downtown Miami.
Ngotho is a citizen of Kenya and Phanor is a citizen of Haiti. They both subject to deportation if convicted.
