2018-07-25 DOJ SDNY press_release 117 KB 5,330 chars

Three Defendants Charged In White Plains Federal Court With “Forced Posting” Fraud

Caption: United States v. Bank Records, et al.

summary

Latoya Robinson, Dashawn Johnson, and Tanya Hatwood are charged with conspiracy to commit wire fraud and wire fraud for using fictitious codes to override declined debit card transactions, tricking merchants into releasing over $900,000 in merchandise between 2013 and May 2018, with Robinson and Johnson arrested and Hatwood still at large.

paragraph

Latoya Robinson, Dashawn Johnson, and Tanya Hatwood are charged with one count each of conspiracy to commit wire fraud and wire fraud for orchestrating a 'forced posting' scheme that exploited a debit card system's offline override function. By inputting fictitious authorization codes, they caused merchants to approve and release merchandise worth over $900,000 despite insufficient funds, with fraud going undetected for months until bank records and merchant interviews confirmed the pattern. Each defendant faces a maximum of 20 years in prison per count; Robinson and Johnson were arrested in July 2018, while Hatwood remains at large.

narrative

Latoya Robinson, Dashawn Johnson, and Tanya Hatwood are charged with conspiracy to commit wire fraud and wire fraud for orchestrating a 'forced posting' scheme that exploited a security feature in debit card processing systems between 2013 and May 2018. By entering fictitious codes to override declined transaction alerts, they tricked merchants into releasing merchandise without authorization, as the card readers falsely displayed approval while the underlying bank transactions remained invalid. Over 30 merchants and bank records corroborated more than $900,000 in fraudulent merchandise obtained through this method, with fraud often undetected for months. Robinson, 29, of the Bronx, and Johnson, 25, of Manhattan, were arrested and presented before a magistrate judge in July 2018, while Hatwood, 27, of the Bronx, remains at large. The scheme relied on the fact that merchants, unaware of the fraudulent codes, would assume transactions were legitimate and allow customers to leave with goods. The FBI, along with the Yonkers, NYPD, and Nassau County Police Departments, investigated the case, which is being prosecuted by the U.S. Attorney’s Office for the Southern District of New York. Each defendant faces up to 20 years in prison per charge, though the allegations remain unproven until trial.

Enriched metadata

Scheme: cyber-fraud (95%)
Court: Southern District of New York
Outcome: charged · 2018-07-25
Victim loss: $900,000

Classified cyber-fraud(confidence 95%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →

Extracted insights

Dollar amounts 2

$1.00M $1 million $1M–$10M
$900K $900,000 $100K–$1M

Entities 11

person bank records
scheme_term charging three defendants with conspiracy to commit wire fraud and wire fraud
scheme_term conspiracy to commit wire fraud and wire fraud
person dashawn johnson
person defendants performed forced posting
agency fbi assistant director-in-charge william f. sweeney jr.
agency fbi remains committed to investigating fraud in its many facets
person forced posting
person latoya robinson
person tanya hatwood
agency U.S. Attorney's Office For The Southern District Of New York

Triples 45

U.S. Attorney's Office Announce Charging Three Defendants With Conspiracy To Commit Wire Fraud And Wire Fraud
U.S. Attorney Geoffrey S. Berman Say Defendants Took Advantage Of A Security Feature Of The Debit Card Processing System
U.S. Attorney Geoffrey S. Berman Say Scam Is Over And Defendants Face Significant Criminal Charges
FBI Assistant Director-in-Charge William F. Sweeney Jr. Say FBI Remains Committed To Investigating Fraud In Its Many Facets
FBI Assistant Director-in-Charge William F. Sweeney Jr. Say Defendants Believed Their Scheme Would Go Undetected
FBI Assistant Director-in-Charge William F. Sweeney Jr. Say Defendants Misguided Criminal Behavior Was Wrong
Complaint Unsealed In White Plains Federal Court Allege Defendants Performed Forced Posting
LATOYA ROBINSON Perform Forced Posting
DASHAWN JOHNSON Perform Forced Posting
TANYA HATWOOD Perform Forced Posting
LATOYA ROBINSON Use Fictitious Codes In Attempt To Take More Than $900,000 In Merchandise
DASHAWN JOHNSON Use Fictitious Codes In Attempt To Take More Than $900,000 In Merchandise
TANYA HATWOOD Use Fictitious Codes In Attempt To Take More Than $900,000 In Merchandise
LATOYA ROBINSON Take Advantage Of Functionality That Allows Someone To Input A Code That Serves To Take The Card Reader Offline
DASHAWN JOHNSON Take Advantage Of Functionality That Allows Someone To Input A Code That Serves To Take The Card Reader Offline
TANYA HATWOOD Take Advantage Of Functionality That Allows Someone To Input A Code That Serves To Take The Card Reader Offline
LATOYA ROBINSON Cause Card Reader To Show That The Transaction Was Authorized
DASHAWN JOHNSON Cause Card Reader To Show That The Transaction Was Authorized
TANYA HATWOOD Cause Card Reader To Show That The Transaction Was Authorized
LATOYA ROBINSON Cause Merchant To Let The Customer Leave With Any Merchandise The Customer Attempted To Purchase
DASHAWN JOHNSON Cause Merchant To Let The Customer Leave With Any Merchandise The Customer Attempted To Purchase
TANYA HATWOOD Cause Merchant To Let The Customer Leave With Any Merchandise The Customer Attempted To Purchase
LATOYA ROBINSON Cause Merchant Would Not Learn That The Code Was Fictitious And The Transaction Invalid Until Days Or Even Months Later
DASHAWN JOHNSON Cause Merchant Would Not Learn That The Code Was Fictitious And The Transaction Invalid Until Days Or Even Months Later
TANYA HATWOOD Cause Merchant Would Not Learn That The Code Was Fictitious And The Transaction Invalid Until Days Or Even Months Later
LATOYA ROBINSON Engage In Conspiracy To Commit Wire Fraud And Wire Fraud
DASHAWN JOHNSON Engage In Conspiracy To Commit Wire Fraud And Wire Fraud
TANYA HATWOOD Engage In Conspiracy To Commit Wire Fraud And Wire Fraud
LATOYA ROBINSON Arrest And Presented Before United States Magistrate Lisa Margaret Smith
DASHAWN JOHNSON Arrest And Presented Before United States Magistrate Lisa Margaret Smith
TANYA HATWOOD Remain At Large
U.S. Attorney Geoffrey S. Berman Say As Alleged, The Defendants Took Advantage Of A Security Feature Of The Debit Card Processing System
U.S. Attorney Geoffrey S. Berman Say Thanks To Our Federal And Local Law Enforcement Partners, The Scam Is Over And The Defendants Face Significant Criminal Charges
FBI Assistant Director-in-Charge William F. Sweeney Jr. Say As Technology Continues To Evolve, The Complexity Of Fabricated Schemes Evolves Almost Faster Than Humans Can Keep Up
FBI Assistant Director-in-Charge William F. Sweeney Jr. Say By Allegedly Using Fictitious Codes In The Attempt To Take More Than $900,000 In Merchandise, The Defendants Believed Their Scheme Would Go Undetected
FBI Assistant Director-in-Charge William F. Sweeney Jr. Say Now That The Two Defendants Are Facing Federal Charges Today, It Is Clear That Their Misguided Criminal Behavior Was Wrong
Complaint Unsealed In White Plains Federal Court Allege When A Customer Presents A Debit Card To Purchase Merchandise At A Store And The Card Is Swiped At An Electronic Card Reader Maintained By The Merchant, Electronic Signals Are Routed From The Merchant To The Brand Of The Customer’s Debit Card, And Then Routed To The Underlying Bank That Issued The Debit Card
Complaint Unsealed In White Plains Federal Court Allege The Bank Then Verifies Whether The Customer Has Sufficient Funds In The Account To Cover The Requested Transaction, Which Is Then Relayedback To The Merchant
Complaint Unsealed In White Plains Federal Court Allege When There Are Insufficient Funds On The Debit Card Presented By The Customer, The Card Reader Will Display A Message That The Transaction Request Was Denied
Complaint Unsealed In White Plains Federal Court Allege Many Card Readers Have A Functionality, Though, That Allows Someone To Input A Code That Serves To Take The Card Reader Offline, Overriding The Denial Message And Verifying The Transaction
Complaint Unsealed In White Plains Federal Court Allege Malign Actors Can Take Advantage Of This Functionality By Inputting A Fictitious Code Not Provided By The Issuing Bank Under The Guise Of Entering A Pin Code Or Other Authorization Code, Which Could Cause The Card Reader To Show That The Transaction Was Authorized
Complaint Unsealed In White Plains Federal Court Allege The Merchant May Then Let The Customer Leave With Any Merchandise The Customer Attempted To Purchase; The Merchant Would Not Learn That The Code Was Fictitious And The Transaction Invalid Until Days Or Even Months Later
Complaint Unsealed In White Plains Federal Court Allege The Process By Which A Customer Could Take Advantage Of The Functionality Is Called “Forced Posting” Or “Forcing The Off”
Bank Records Corroborate Interviews With More Than 30 Merchants
Bank Records Show From 2013 Up To May 2018, LATOYA ROBINSON, DASHAWN JOHNSON, And TANYA HATWOOD, Together And Separately, Performed Forced Posting

View original DOJ press releasejustice.gov

Extracted body text (5,330c)

Press Release Three Defendants Charged In White Plains Federal Court With “Forced Posting” Fraud Wednesday, July 25, 2018 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a complaint charging three defendants with allegedly engaging in conspiracy to commit wire fraud and wire fraud in a scheme known as “forced posting.” Two defendants, LATOYA ROBINSON and DASHAWN JOHNSON, were arrested and presented yesterday before United States Magistrate Lisa Margaret Smith. Defendant TANYA HATWOOD remains at large. U.S. Attorney Geoffrey S. Berman said: “As alleged, the defendants took advantage of a security feature of the debit card processing system, which allowed for nearly $1 million in fraudulent merchandise charges. Thanks to our federal and local law enforcement partners, the scam is over and the defendants face significant criminal charges.” FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As technology continues to evolve, the complexity of fabricated schemes evolves almost faster than humans can keep up. Nevertheless, the FBI remains committed to investigating fraud in its many facets. By allegedly using fictitious codes in the attempt to take more than $900,000 in merchandise, the defendants believed their scheme would go undetected. However, now that the two defendants are facing federal charges today, it is clear that their misguided criminal behavior was wrong.” As alleged in the Complaint unsealed in White Plains federal court[1]: When a customer presents a debit card to purchase merchandise at a store and the card is swiped at an electronic card reader maintained by the merchant, electronic signals are routed from the merchant to the brand of the customer’s debit card, and then routed to the underlying bank that issued the debit card. The bank then verifies whether the customer has sufficient funds in the account to cover the requested transaction, which is then relayed back to the merchant. When there are insufficient funds on the debit card presented by the customer, the card reader will display a message that the transaction request was denied. Many card readers have a functionality, though, that allows someone to input a code that serves to take the card reader offline, overriding the denial message and verifying the transaction. Malign actors can take advantage of this functionality by inputting a fictitious code not provided by the issuing bank under the guise of entering a pin code or other authorization code, which could cause the card reader to show that the transaction was authorized. The merchant may then let the customer leave with any merchandise the customer attempted to purchase; the merchant would not learn that the code was fictitious and the transaction invalid until days or even months later. The process by which a customer could take advantage of the functionality is called “forced posting” or “forcing the off.” Bank records, corroborated by interviews with more than 30 merchants, show that from 2013 up to May 2018, LATOYA ROBINSON, DASHAWN JOHNSON, and TANYA HATWOOD, together and separately, performed forced posting on dozens of occasions, and schemed to take or attempt to take more than $900,000 in merchandise in total. * * * ROBINSON, 29, of the Bronx, JOHNSON, 25, of Manhattan, and HATWOOD, 27, of the Bronx, are each charged with one count of conspiracy to commit wire fraud and one count of wire fraud. Each count carries a maximum sentence of 20 years. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge. Mr. Berman praised the outstanding investigative work of the FBI, the Yonkers Police Department, the New York City Police Department, and the Nassau County Police Department. These case is being handled by the Office’s White Plains Division. Assistant United States Attorney Samuel L. Raymond is in charge of the prosecution. The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation. Updated July 25, 2018 Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 18-257

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