Scammer to forfeit $1.1M in ‘forced posting’ debit card scheme

A Bronx woman has agreed to forfeit more than $1.1 million in ill-gotten gains taken from merchants in Westchester and beyond, in a scheme that circumvented a security feature of the debit card payment system.

The scheme took seconds to execute, up to months for merchants to discover and years for law enforcement to prosecute.

Latoya Robinson pleaded guilty at a Jan. 29 arraignment in federal court in White Plains to wire fraud and conspiracy from 2013 through May 2018.

She used a technique known as “forced posting” or “forcing the off.”

When a debit card is swiped at a merchant”™s card reader, a processing company routes the request to the customer”™s debit card company and bank. If the account has sufficient funds, the bank authorizes the transaction. If the account does not have enough money, the card reader displays a denial message.

The process takes a few seconds.

But on some card readers the merchant can enter a code that overrides the denial message, allowing the merchant to call the bank and verify the customer”™s identity.

But even a phony code can be used to override the denial message. The thief, for instance, could say that she has been the victim of identity theft and needs to enter a pin code. When the fictitious code is entered, the card reader says the transaction has been authorized.

The merchant doesn”™t discover that the transaction is invalid until the processing company tallies the store”™s revenues, “days or even months later,” according to the criminal complaint filed in July by an FBI agent.

Robinson and two accomplices are suspected of defrauding more than 30 merchants, mostly in Westchester and New York City, according to the complaint, but also in Connecticut, Massachusetts, New Jersey and Pennsylvania.

She targeted car dealers, jewelry stores, furniture stores and even a liquor store. In May 2017, for instance, she made off with $32,000 in merchandise from a Yonkers jeweler.

When the merchant was notified of the fraudulent transaction, the processing company said the store would have to take the loss.

Robinson, 29, was arrested in July, as were suspected accomplices Dashawn Johnson, 25, of Manhattan, and Tanya Hatwood, 27, of the Bronx. At that time, the FBI attributed $735,000 in losses to Robinson, $203,000 to Johnson and $26,000 to Hatwood.

All three were released on bail. Johnson was committed in November to a drug treatment and mental health facility for at least 90 days. Attorneys for Johnson and Hatwood have been discussing with the government the possibility of disposing their cases without trial, according to court records.

Robinson, who is represented by Kerry Andrew Lawrence of Calhoun and Lawrence of  White Plains, is scheduled for sentencing on May 10.