5 charged after Walmart uncovers $300,000 cell phone swindle at Twin Cities stores
RAMSEY COUNTY, Minn. (FOX 9) - Ramsey County has charged five people in a cell phone scheme that cost Walmart, cell phone service providers and a third party sales company, Outsourced Sales Leadership, over $300,000 from November 2018 to July 2019.
The scheme involved purchasing cell phones from OSL at the locations inside of Walmart Stores around the metro. Mainly Walmart’s Midway, Apple Valley, Eagan locations.
OSL is a third party business that sells cell phones and service plans from inside of Walmart locations. The phones OSL sells are part of Walmart’s inventory.
According to the complaint, Walmart became aware of the issue in early 2019 when Walmart Global received reports from store personnel about suspicious cell phone transactions.
Typically, when a customer purchases a phone from OSL they would only pay the taxes on the sale. The customer pays both the cost of the phone and the service plan in monthly installments over the duration of the contract.
Store personnel began noticing transactions for five or six new phones and service plans being bought at a time. In addition, many of the phones that had been purchased were defaulting on their service plans.
Customers were buying phones, often using aliases they knew would pass a credit check, and then turning around and selling the phones on the secondary market. Sometimes the customers or "credit mules" as described in the complaint would use a fake identification to purchase the phones.
Several OSL employees were aware of the scheme, but went along with it. The charged employees either took "tips" of $50 paid to the employee who made the transaction, or because managers wanted higher sales numbers and as long as the customer passes a credit check they said the sale should go through.
The complaint says that OSL employees and credit mules conducted over 300 transactions in the period of Nov. 2018 to July 2019.
Ramsey County has charged the five people with Racketeering, Theft by Swindle, and Aiding and Abetting theft by Swindle.