http://www.mercurynews.com/breakingnews/ci_12973822
Cops charge ex-Restoration Hardware workers with credit card refund scam
By Scott Smith
Stockton Record
Posted: 08/01/2009 12:28:00 PM PDT
Updated: 08/01/2009 12:28:05 PM PDT
Eleven former employees of the call center at Tracy's Restoration Hardware are suspected of embezzling more than $175,000 from the upscale home furnishings firm by channeling phony credit card refunds to their personal bank accounts, authorities said.
On Friday, Toccara Smothers, 26, and Erica Ellersbee, 28, were arraigned in San Joaquin County Superior Court on felony grand theft charges that make them eligible for state prison time.
Last week, 20-year-old Clynaee Logan of Stockton pleaded guilty to the same charge. Logan has a previous embezzlement conviction from a Stockton clothing store, and a prosecutor said she took the largest amount from Restoration Hardware, totaling $40,000.
"She's just the first," San Joaquin County Deputy District Attorney Stephen Taylor said Friday. "The other two being arraigned also took a lot of money."
Further arrests are imminent, he said.
In the alleged scheme, the firm's employees looked up customers' purchases on the computer and changed the credit card number to match their personal bank cards, receiving a payment to their own accounts, Taylor said.
They were discovered when the employees' banks started noticing large refunds and contacted Restoration Hardware. The employees typically made about $9 an hour working at the call center, Taylor said.
"They were sitting around talking about it in the break room," Taylor said of the alleged scheme. "A whole bunch of people knew about it."
Tracy police Detective Craig Kootstra, the lead investigator, said that some suspects who were involved took only a few hundred dollars, and if they cooperate with officials, the charges could be reduced.
"Everybody's either going to jail or prison on this," he said. "It depends on their prior history or their cooperation."
A spokeswoman for Restoration Hardware declined to comment.
Logan's bank records show that she was overdrawn by $203 in December 2007; in March, she had $31,383 in deposits. Her bank statement shows purchases at Wal-Mart, KFC, bars and movie theaters, among hundreds of transactions.
Logan is free from custody but expected back in court for sentencing Sept. 21. She could spend up to three years or as little as 16 months in state prison if she cooperates with investigators, Taylor said.
"Any business with a credit card terminal is vulnerable to this," he said. "There are controls. If you use them, that will make it difficult for things like this to happen."
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