Phoenix woman led largest counterfeit-coupon enterprise in U.S. history

Counterfeit coupons - CP art

Courtesy of Phoenix Police Department

By Cecilia Chan The Republic | azcentral.com Sat May 18, 2013 2:40 PM

Robin Ramirez owned a fleet of 26 vehicles, three condominiums and a 36-foot boat — all paid for with profit from selling fake coupons.The 41-year-old Phoenix woman led the largest counterfeit-coupon enterprise in U.S. history before her arrest last year, federal and local officials said.More than 40 U.S. manufacturers, including Procter & Gamble, fell victim to Ramirez’s sophisticated counterfeit scam. Ramirez sold enough fake coupons online to turn a $2.3 million profit over five years. She was sentenced this month to two years in state prison.Phoenix police arrested Ramirez, Amiko Fountain and Marilyn Johnson in July. Fountain, 43, and Johnson, 54, each received three years probation.

Investigators seized $40 million in counterfeit manufacturer coupons and $1.1 million in assets from Ramirez. The coupons were for about 240 product brands, including Bush Beans, Iams, movie theater chain AMC and Starbucks.“It was amazing to me,” Phoenix police Sgt. David Lake said. “Usually people we deal with are (so) midlevel, low-level (that) unless it’s a drug cartel, (rarely) will you find this kind of money.”Lake led a group of 12 officers in the eight-week investigation dubbed “Operation Super Coupon” that built the case against Ramirez and her accomplices.“Robin did not have any significant work history that I could find,” Lake said. “She was a pilot’s wife hanging out at the house and got into this easy money.”

Phoenix detective Sara Garza, who pored over the enterprise’s financial records, said Ramirez lived a low-key lifestyle with her illicit gains. She appeared to be an ordinary housewife who drove a 2007 Toyota FJ Cruiser and lived with her husband, a retired commercial airline pilot, in a four-bedroom Southwestern-style home on an acre in northeast Phoenix. “She had these really nice luxury cars that she didn’t drive,” Garza said.Ramirez amassed a fleet of 26 vehicles, including a 1965 Corvette, three Camaros and a toterhome, which is a recreational vehicle with trailer, Garza said. The toterhome boasted granite countertops and $30,000 in flooring and was “well-upholstered,” she said. Ramirez also owned a 36-foot Heritage boat and ATVs. Ramirez stored many of her “high-end toys” in a rented hangar at Deer Valley Airport, Garza said.

Ramirez also rented a stash house nearby that she used for her coupon business and to hide a BMW and a Land Rover from her husband, Garza said. She said Ramirez duped her husband into believing she operated a legitimate business. The seized assets include more than $100,000 in bank accounts, jewelry, Coach and Louis Vuitton handbags, 100 rifles and handguns and three condominiums and a house, all purchased in cash in 2012 in east Phoenix, Garza said.Lake said Ramirez began selling fake coupons seven years ago, using eBay before launching her website in 2007. The website, savvyshoppersite.com, is not associated with Savvy Shopper magazine, a publication owned by Gannett Co., Inc., parent company of The Arizona Republic, azcentral.com and KPNX-TV.

Phoenix police became involved after companies targeted in the scam partnered with industry watchdog Coupon Information Corp. and hired private investigators, who traced the bulk of the country’s high-quality fake-coupon sales to Phoenix.Lake said once the coupons were purchased from the website and verified to be fakes, the challenge was finding who was behind the Internet sales.

As Internet crime rises, the challenge for law enforcement is showing who is actually at the keyboard, Lake said. But in this case, all investigators had to prove was that Ramirez controlled Savvyshopper. Investigators did just that by obtaining search warrants for the website’s financial documents, digging through the trash and staking out a post-office box at a Glendale UPS Store where Ramirez was seen retrieving packages, Lake said. Ramirez used aliases and fake addresses to hide her identity, Lake said.

A complex operation

Ramirez would write a letter to a manufacturer complaining about a product and saying she would never buy it again. The manufacturer in turn would send her a free product coupon. Garza said investigators found a master file of these letters with fake names. Ramirez then arranged with a printing company that Lake suspects to be located in Asia to reproduce the manufacturer coupon in mass quantities. She then would sell the coupons online.

For an extra $2, Ramirez would add a counterfeit hologram, similar to what manufacturers use to prevent fraud, Garza said. “These were not just coupons for 50 cents,” Lake said. “Some were up to $70 in value.” The lowest-value coupon in Ramirez’s possession was for $2 off a product. Ramirez would sell the coupons for half the face value, Lake said. She had hundreds or even thousands of customers; many were repeat customers, investigators said.

Lake said Ramirez filled more than 20,000 orders. Some customers purchased large quantities of fake coupons. One woman in Illinois spent $77,841.50 on 148 orders from Ramirez’s business, according to the police report. Lake said some buyers he contacted knew the coupons were fakes.

Impact of fake coupons

“The Phoenix case in particular was very damaging,” said Bud Miller, executive director of Coupon Information Corp. “It’s the largest single coupon case we’ve encountered to date. While it was centered in Phoenix, it touched every state in the country.” Miller said Ramirez’s scam cost the industry “tens of millions of dollars, which translate to higher product costs and job loss.”

The coupon industry is a $4.1 billion business that loses roughly $500 million a year because of counterfeit coupons, according to industry officials. Manufacturers produce a limited number of coupons to control the cost associated with the promotion. Large quantities of fake coupons result in a significant loss, officials said. Lakes said fraud also causes manufacturers to give out fewer coupons and coupons with a lower face value.

Representatives from Bar-S Foods Co., in a news conference announcing the arrests last year, said the Phoenix company “lost a quarter of a million dollars” through Ramirez’s scheme. Bar-S Foods printed 5,000 coupons offering $2 off one of its products. The company issued 1,800 of these coupons and received more than 45,000 back, according to the Phoenix police report. The fake coupons gave $5 off each product purchased.

Miller said the group is working with law enforcement and industry partners to combat ongoing coupon fraud with measures such as placing holograms on coupons and educating the consumer. “The consumer should never purchase coupons,” he said. “They should not pay for something that is given away for free.” Selling or transferring coupons to a third party violates most coupon-redemption policies, according to the Federal Trade Commission. Miller said people paying for coupons “are giving their names and addresses and other information to people who may not have their best interest at heart.”

Ramirez’s accomplices

As Ramirez’s business grew, she turned for help to two of her customers, Fountain, a licensed chiropractor, and Johnson, a retired teacher who owned a business with her husband breeding English mastiffs from their south Phoenix home, investigators said. Lake said the two were hired about a year before their arrests. Fountain was paid a salary for such work as packaging and affixing the fake holograms to the coupons. She lived for free in the stash house.

A mail carrier told authorities that she picked up “20-200 packages” from Fountain each work day, with shipping labels from Savvyshopper. For her help in packaging and filling orders for coupons, Johnson had access to Ramirez’s coupons, which she sold on a competing website, Lake said. He said Johnson operated her site for about a year and earned $18,000.

A profitable business

During the five years Ramirez operated Savvyshopper, she took in $2.3 million, $2.1 million of that generated in the year before her arrest, Garza said.

“Her business was just booming,” she said. “People are looking to get into the same business she was, but she had the lion’s share of the market throughout the country.” Ramirez’s enterprise showed a profit margin of 91 percent.

In June 2012, Ramirez made $214,334. She spent $5,700 on postage, $1,900 for printing the coupons, $4,000 to pay Johnson and $1,700 rent for the stash house, Garza said. Most months that year were similar, she said. Lake said Ramirez has no previous criminal record. “We don’t know how she got involved,” he said. “This was a pretty elaborate and a complicated job. She did a great job hiding who she was. She layered herself as a professional would. “There were a lot of things that we don’t see from a first-time offender, so we believe that she was coached by someone bigger.”

Although Ramirez made big bucks, she lost it all at the end. She is incarcerated at the Arizona State Prison Complex-Perryville and faces a $5 million restitution order. Lake said Ramirez’s husband divorced her, and she lost her nearly 3,000-square-foot home with 10-foot ceilings. She and her husband agreed to buy the home in June 2011 for $515,000 but lost the property after Ramirez’s arrest and subsequent loan default. “There are still people out there doing this,” Lake said. “All ideas start somewhere. We have to track it back to whose idea it was and how it spread.”