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SALT LAKE CITY — Eight Utahns and one Washington resident have been indicted by a federal grand jury and accused of obtaining $100 million worth of credit and debit card purchases through a scheme that involved the sale of nutraceutical, CBD and dietary supplements.
The U.S. Attorney's Office of Utah announced Wednesday that the defendants are:
- April Gren Bawden, 36, of Salt Lake County
- Chad Austin Bawden, 43, of Salt Lake County
- Phillip Gannuscia, 52, of Salt Lake County and Puerto Rico
- Makaio Lyman Crisler, 39, of Utah County
- Barbara Jo Jackson, 69, of Utah County
- Brent Goldburn Knudson, 42, of Utah County
- Richard Scott Nemrow, 42, of Utah County
- Dustin Garr, 44, of Washington County
- Robert McKinley, 45, of Spokane, Washington
The defendants are accused of committing 18 counts of criminal activity from at least January 2016 through April 2022, including conspiracy to commit wire fraud; conspiracy to commit bank fraud; conspiracy to commit money laundering; wire fraud; aggravated identity theft; and money laundering aiding and abetting, according to a statement from federal prosecutors.
The scheme involved the sale of nutraceutical, CBD and dietary supplements through a number of websites and a call center operating in Utah, according to the indictment. Advertisements promised benefits such as weight loss and the treatment of seizures and cancers, included false claims about their effectiveness, and used false celebrity endorsements. Consumers were also misled about the price of products and the ability to return items or obtain refunds, the indictment states.
All sales required the customer to provide a credit or debit card. Customers were then enrolled in monthly subscriptions "without their knowledge or consent," charged more than the advertised prices, and upsold on other products while trying get refunds, the indictment alleges.
"The misleading and fraudulent practices also resulted in several million dollars of chargebacks due to consumers disputing a charge as unauthorized or fraudulent," the indictment states.
To facilitate "tens of thousands" of misleading online sales, the defendants are accused of setting up hundreds of websites and limited liability companies, hundreds of business checking accounts and hundreds of merchant processing accounts in the names of others but which they controlled. They recruited and paid individuals referred to in the indictment as "straw owners" for the use of their personal information, according to the indictment.
These straw owners were paid nominal amounts, usually $250 to $350 a month, as long as their merchant accounts remained open; but they had little to no knowledge of the businesses, according to prosecutors.
The defendants used the proceeds from the scheme to purchase items such as a Lamborghini Urus, a 2020 Porsche 911 convertible and a 2021 Nautique Paragon boat, according to the U.S. Attorney's Office. They also bought homes and paid for cosmetic surgery, the indictment states.
"In addition to the millions of dollars benefiting the defendants, more than $64 million of the scheme proceeds were transferred overseas," the indictment says.
