SAN DIEGO — A San Bernardino man was sentenced to 41 months in federal prison for carrying out a credit/debit fraud scheme that targeted retail stores, restaurants and hotels throughout San Diego County, prosecutors announced Thursday.
In handing down the nearly 3 1/2-year term on Wednesday, U.S. District Judge Michael Anello said Charlie Barbero’s scheme was the “most prolific financial fraud” he had ever seen in his time behind the bench.
According to court documents, Barbero took advantage of a particular type of credit or debt card transaction known as a “forced sale.”
From December 2013 to August 2014, Barbero fraudulently persuaded retail merchants to “force” dozens of transactions worth tens of thousands of dollars. The 42-year-old defendant used the “forced sale” scheme to obtain jewelry, limousine services and clothing, and to stay in luxury hotels in San Diego, according to prosecutors.
When the merchant finished ringing up Barbero’s goods or services, Barbero would provide credit or debit cards containing insufficient funds. After the transaction was denied, Barbero would pretend to call the card issuer and claim to possess an “authorization code” that would allow the purchase to go through, according to the U.S. Attorney’s Office.
The cashier would then enter the code, thereby forcing the sale and permitting the purchase. Only later, when the merchant and the card issuer attempted to settle the charge, would the merchant realize that Barbero had provided a fake code.
In order to avoid a “forced sale” fraud, law enforcement officers recommend that merchants use authorization codes only when obtained directly from a bank or credit card company.
Barbero, who pleaded guilty at an earlier hearing to wire fraud, was ordered to pay nearly $50,000 in restitution to the victims of his scheme.