DOJ: TWO MICHIGAN MEN SENTENCED FOR CONSPIRACY TO COMMIT WIRE FRAUD

• The scheme targeted more than 101 Walmart locations in over 15 states, with an intended loss of over $340,000.
• Strodder was ordered to pay $180,676.53 in restitution and Smith $167,802.52, with both receiving three years of supervised release.

Malik Strodder and Dondrell Smith were sentenced to 21 and 35 months in federal prison, respectively, for conspiring to commit wire fraud by defrauding Walmart stores using fraudulent cash cards. Both were also ordered to serve three years of supervised release and pay restitution for their roles in the scheme.

The pair executed their scheme at more than 101 Walmart locations across over 15 states, resulting in an intended loss of over $340,000. They used fraudulent cards to obtain merchandise, then returned the items for cash refunds at different Walmart stores.

• 21 months Strodder's prison sentence
• $180,676.53 Restitution ordered for Strodder
• over $340,000 Intended loss from the scheme

• Review transaction monitoring for manual code entries at Walmart and similar retailers, especially those involving cash card declines.
• Update internal fraud typologies to include schemes involving false employee claims and fraudulent cash card use across multiple states.
• Cross-reference restitution amounts of $180,676.53 and $167,802.52 with suspicious refund activity at retail clients.

This case highlights the risks posed by organized retail fraud schemes that exploit internal controls and employee procedures, such as manual code overrides. The use of fraudulent cash cards and false employee claims enabled the perpetrators to bypass standard payment verification, resulting in significant financial losses across multiple states. Compliance officers must be vigilant in detecting similar patterns, ensuring robust controls around manual transaction overrides, and collaborating with law enforcement to address cross-jurisdictional fraud risks.