Irvine man was ringleader of scheme to defraud national retailer out of millions, feds say
An Irvine man is accused of being the ringleader in a scheme that fraudulently obtained employee identification cards and discounts to buy millions of dollars worth of electronics from a national retailer, the Department of Justice announced Thursday.
A dozen people took part in the scheme, according to a federal grand jury. Four of them – including the lead defendant, Abdallah Osseily, 34, of Irvine – were arrested Wednesday by the FBI. Three of the defendants were arraigned that day in U.S. District Court in Santa Ana and were ordered released on bond, authorities said. The fourth defendant was arrested in Arizona and appeared in Phoenix federal court.
The other eight defendants will appear in federal court later.
The defendants face 54 counts of various charges including conspiracy, aggravated identity theft, mail fraud and wire and bank fraud, according to the indictment.
The indictment states that from July 2014 to March of this year, Osseily and the others bought millions of dollars worth of electronics from a national company referred in court documents as “U.S. Retailer 1.” It has about 1,800 stories around the country. Department of Justice officials would not disclose the name of the company.
During these buying trips, Osseily and the other defendants acquired employee, military, birthday and registry discounts even though they were not eligible for them. In one case, they were able to scan a $10 coupon 90 times at a self-checkout register and got $920 of gaming gift cards for $20, the indictment details.
At Osseily’s direction, the defendants went to hundreds of the retailer’s stores around the country, bought items and shipped them back to his Irvine home. In one case, they shipped 500 pounds of electronics to Los Angeles International Airport, the indictment states. The Irvine man then resold the merchandise and under-reported the profits to the IRS, authorities said.
Other times, the defendants exploited the company’s return policies to get store credits in amounts greater than the prices they actually paid for the merchandise with discounts, court documents state.
This week’s indictment replaces a previous one filed in June 2019. That one charged only Osseily with bank fraud and attempted bank fraud, attempted unlawful procurement of naturalization, and making a false statement in an immigration proceeding, the department said.
If convicted, Osseily faces a statutory maximum sentence of more than 100 years in federal prison.