A computer engineer in New Jersey who defrauded the Kohl’s Cash rewards program of hundreds of thousands of dollars was sentenced to 18 months in federal prison Thursday and ordered to pay nearly $450,000 in restitution.
Pavan Gurram, 35, an Indian national who had been in the U.S. for a half-dozen years on a work visa, admitted he created a computer program to swipe Kohl’s Cash certificate numbers but didn’t explain why someone with no criminal record and no apparent need for money would devise such a fraud.
Gurram and his wife, Vanaja Gattupalli, 27, also from India, earlier pleaded guilty to fraud in federal court before U.S. District Judge J.P. Stadtmueller.
Gattupalli, considered more of a sidekick to the scheme, received six months’ probation. Both will be deported to India after their terms.
Michael Cohn, attorney for Gurram, noted the couple had paid back nearly $380,000 to Kohl’s and would face severe stigma and shaming when they are deported back to India.
Sentencing guidelines called for four to five years in prison because of the amount of fraud. Stadtmueller said that much time wasn’t warranted given the cooperation the couple gave to the FBI and their willingness to already pay restitution. But he said some punishment was necessary as an example for others who would come to the United States and try to “bite the very hand of commerce” that is helping them.
“America is the land of opportunity. It will not be the land of opportunity for those who engage in fraudulent activities,” the judge said.
Assistant U.S. Attorney Benjamin Proctor said the case is about “greed and dishonesty.” He said the company will recover from the fraud but the time customers of the Kohl’s reward program undoubtedly spent trying to figure out how their rewards disappeared cannot be recovered.
Kohl’s Cash is a loyalty program by the Menomonee Falls-based retail chain that gives customers $10 certificates when they spend $50 at the store or online.
Gurram developed a computer program to steal legitimate Kohl’s Cash certificate numbers and use them to buy merchandise online, which the couple kept or sold. He also sold the stolen numbers to others, including businesses that resell gift cards.
The investigation was opened by the FBI after customers complained to Kohl’s that they were not able to redeem cash rewards certificates they had received, records showed.
Gurram used cash benefits from more than 7,000 customers between June 2014 and June 2015. Gurram placed more than 1,000 orders with Kohl’s, buying items such as electronics, jewelry, sports memorabilia, clothing and household items. The items were used by the couple, sold to others who didn’t know they were stolen, returned for store credit or sent overseas to relatives as gifts, records show.
John Campion, attorney for Gattupalli, said every decision was made for her in the traditional Indian culture she was raised. She went to college, but her father picked the classes. Her marriage to Gurram was arranged. Once in the U.S., she never went to a store without her husband.
And while she helped in the fraud, Campion added, “It was not her role to object.”
FBI agents think the defendants seized the Kohl’s Cash certificate numbers by using an automated computer process that “located, identified and provided certificate bar code and PIN numbers for rewards cash certificates in a sequential manner.”