Coupon Queen Using a coupon
is a much easier way for shoppers to cut the cost of their household items,
groceries, and even personal care items. Recently, coupon fraud has turned serial
couponers into millionaires, as evidenced by Virginia couple Lori and Pacifico Talens.
This couple cost manufacturers an astonishing
31 million dollars! Just how did this crime go unnoticed for such a long time?
Models, Money, and Cars In a candid interview conducted in 2014,
Lori Ann recounts how her dad was the only motivation she ever needed to succeed. She
says that her love for cars started as early as 15 when she got her first ride, a 1994 Toyota Celica.
By 16, she held two or three jobs at once, but all she wanted to do
to her brand-new ride was install a bass-boosting sound system to be like
all the other cool kids in high school. The upgrades didn't stop there; according to Lori,
she went to modify the engine, the interior, and the exterior of the Toyota Celica.
With cars now her newly found flame, Lori joined a car club that toured and
competed up and down the East Coast. She also recounts having won four or
five trophies. According to Lori, her car was featured in an international magazine,
on the cover of calendars, and on posters. It was seen internationally courtesy of Spike TV.
With her growing brand, Lori started attracting sponsors. A stranger even paid for a website to
be built for her. Her Business was booming with endorsements, advertising revenue, merchandise;
young Lori remembers banking between 5-10 thousand dollars on a single weekend.
By the time she graced 20, Lori remembers making six figures off
what she had considered a part-time job! She also turned into a professional model,
charging about 1,500 dollars per appearance. She describes that as the peak of her career.
Lori said she inspired a lot of young girls who wanted to be like her. They
would come to her and ask for advice on how to jumpstart their careers. So,
she immediately thought of how to harness the situation. That's how the printing idea came in.
Within no time, she had conquered the market and started referring girls and other clients
to affiliate companies. However, we have to take Lori's word for all of these accomplishments.
Her car show and modeling career are nowhere to be found when searched on the internet.
Counterfeiting However, the FBI unmasked Lori
and her husband for defrauding the public through the sale of fake coupons making millions for the
Talens and costing manufacturers an astonishing 31 million dollars between 2017 and 2020.
According to Raj Parekh, the acting attorney general for the Eastern District of Virginia,
counterfeiting coupons technically harms the entire retail industry and causes substantial
financial losses to businesses, consumers, and the economy at large.
Going by the documents shown to the court, between April 2017 and May 2021,
Lori Ann operated a complex scheme using various social media sites. Lori is said to have used
Facebook and Telegram to find groups of coupon enthusiasts then proceed to sell them fake copies.
MasterChef Lori and her husband
operated online using the moniker 'MasterChef.' The couple used a computer to design, create and
produce an endless list of counterfeit coupons, all in the comfort of their Virginia Beach Home.
The counterfeit coupons were so good that the naked eye wouldn't lead anyone to distinguish
them from authentic ones. Additionally, their coupons were created with inflated values,
a substantial difference from what genuine coupons would offer.
Part of Lori's dirty scheme was shipping the printed counterfeit coupons throughout the
United States using the US Postal Service and other commercial delivery services.
These two masterminds accepted payment through several online payment methods,
including PayPal and Bitcoin. Lori's husband, 43-year-old Pacifico,
actively participated in the scheme and even assisted in the operation by shipping packages
of counterfeit coupons and performing other administrative tasks assigned to him by his wife.
Customer Help Everything was
merry until one of Lori's customers reported her to the Coupon Information
Center or CIC, a coalition of consumer product manufacturers dedicated to coupon integrity.
Upon receiving the complaint, the CIC went ahead and purchased a coupon from
Lori and confirmed their fears after revealing the coupons were indeed fake.
The institution then contracted the U.S Postal Inspection Service to further the investigation.
After successfully identifying the Talens, federal law enforcement immediately
executed a search warrant on the residence of Lori and her husband.
What was discovered was shocking, to say the least—FBI agents located and seized nearly
a million dollars worth of fake coupons from the couple. Additionally, a forensic search of
Lori's computer revealed images of over 13,000 different and distinct fake coupon designs.
Upon reviewing and comparing the 13,000 images on the computer to known counterfeit coupons
in circulation, the analysis concluded that the tens of thousands of such fake coupon redemptions
had cost retailers and manufacturers losses approximated at a skin-stretching $31 Million.
Additional Scams However, Lori's
coupon fraud wasn't the only system she was gaming. From around November 2015
to February of 2020, Lori defrauded Medicaid and the Supplemental Nutrition Assistance Program.
Apparently, Lori applied for benefits for each of these programs and failed
to disclose vital information such as her husband's legitimate employment income or
even their income from the illegal coupon scheme they were operating.
If Lori had disclosed the said information, they wouldn't have been eligible for these
benefits. The Supplemental nutrition assistance program incurred a total loss estimated at around
$43,000 dollars. Money that wasn't meant for real people in need,
not coupon forging millionaires with alleged backgrounds in modeling and hot rods.
Extended Reach From the details
emerging from her aborted coupon scheme, Lori's operation spread like wildfire all
over the country. Were she and her husband part of the 2021 million-dollar coupon fraud in Texas?
In June 2021, Montgomery County sheriff recovered merchandise worth 40,000
dollars in a counterfeit coupon operation involving some 87 people in 23 states.
The sheriff's office uncovered an online operation scheme that
printed fake manufacturer's coupons after receiving fraud reports from
stores like Walmart and Target. The investigations began in November 2020.
According to investigation reports, one person involved purchased merchandise
worth approximately 200,000 dollars using fraudulent coupons for two
years. The reports further revealed that a clearinghouse had documented
more than 9.7 million dollars in losses. They believe further investigation by relevant
authorities may reveal another 10 million dollars in losses linked to the coupon scheme.
Some of the items recovered by the sheriff's office included dog food,
cleaning supplies, toys, toiletries, and diapers. Authorities recovered nearly
4,000 items spread across four locations throughout Montgomery.
It's not unreasonable to speculate that these fraudsters were operating using Lori's fake
coupons. The apple doesn't fall far from its tree, right? If that's the case,
these said fraudsters used social media platforms like Lori. If they weren't using her exact coupon,
they were at least following her instruction manual on how to be a professional coupon scammer.
They flocked public marketplaces like Facebook and Craigslist to market themselves to possible
victims. They printed their own fraudulent coupons and spread their business all over the country.
The bigger net you cast, the more businesses you can bring in, and the harder it is for
authorities to trace the coupons back to you. However, everybody gets caught eventually. It
was the case for Lori, and it's the case for this band of coupon frauds in Texas.
Counterfeit Coupons New research reveals that
coupon fraud is now a 100-million-dollar problem. With the retail industry in the
middle of digital transformation, traditional coupons remain popular,
and their illegal use is costing the retail industry a whopping 100 million dollars a year.
Cashiers working at outlet stores are said to override improperly scanned coupons,
making them an ignorant source of the estimated 100-million-dollar
loss. Put yourself in the cashier's shoes for a moment. You've got a line of customers,
held up by somebody's shopping cart of coupons. Are you really going to scrutinize each one,
or are you just trying to get them out of the store as soon as possible?
A good number of shoppers also admit to aiding in the fraudulent process.
About 52% of those surveyed admitted to trying to use an expired coupon, and about 48%
admitted trying to use a coupon for products that simply don’t apply to the product. While doing
it once seems harmless, it can quickly add up to millions of dollars for manufacturers as a whole.
Follow the Coupon Stores assume liability for the
coupons once they're in their hands. To redeem the coupons, stores have to mail them to the
manufacturers. However, stores aren't redeeming coupons overnight. Generally, big-box stores like
Walmart or Stop and Shop will send their coupons to their corporate headquarters once per week.
At corporate headquarters, coupons are sorted by store and then sent to
third-party clearinghouses. From the clearinghouse, millions of dollars
worth of coupons are sorted either by machine or hand by their manufacturers.
For example, if you cashed in a $2 coupon for Dove hand soap, that coupon goes into the Dove
pile at the clearinghouse. The manufacturer, or Dove in this example, receives an invoice from
the clearinghouse. The clearinghouse keeps their cut and then sends the money back to the store.
Where Lori and other fraudsters intercept the process is at the very beginning.
Instead of cutting your coupons out of magazines, you're approached by someone online selling
coupons in bulk, coupons that appear to be worth more than your average newspaper cutouts.
These fake coupons move up the chain, and nobody is any wiser. If the machines don't
recognize they're bogus, they go through, costing everybody money in the process.
Aftermath Lori and her husband both pleaded
guilty to mail fraud. She also pleaded guilty to the second fraud charge, wire fraud, and health
care fraud. Lori faces a maximum penalty of 50 years in prison and currently awaits sentencing.
Her husband and accomplice was sentenced to 87 months behind bars and three years of
supervised release in August of 2021. He was also ordered to pay 31 million dollars in restitution.
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