Rush City woman admits to $1.8M global scheme involving romance scams, pandemic aid fraud | #daitngscams | #lovescams

A Minnesota woman has admitted to participating in a global fraud scheme that duped victims around the country out of more than $1.8 million through romance fraud schemes and also targeted pandemic aid programs.

Gayle J. Ferngren, 69, of Rush City, pleaded guilty Monday to mail fraud in connection with a plot that prosecutors alleged started in 2016. Ferngren was accused of transferring most of the ill-gotten money to co-conspirators in far-flung locales such as Egypt and South Africa.

Federal sentencing guidelines call for Ferngren to be sentenced to a prison term ranging from 4¼ to 5¼ years. However, federal judges have full discretion when sentencing defendants and are not bound by the guidelines calculation. Her sentencing has yet to be scheduled.

The plea deal also calls for Ferngren to make full restitution of $1,801,398 that the scheme took in.

The U.S. Attorney’s Office has not disclosed whether any charges against Ferngren’s co-conspirators have been filed so far, and others are not referred to by name in the indictment or the plea agreement document.

According to the indictment:

The scheme found its most lucrative source of fraud money through making false claims to multiple states’ unemployment insurance programs and the federal Paycheck Protection Program. In Minnesota, Ferngren received at least 68 preloaded debit cards with more than $1.3 million in unemployment insurance benefits from state programs in California and Nevada.

Between May 2020 and February 2022, Ferngren and another co-conspirator bought more than $900,000 in Bitcoin at cryptocurrency ATMs in Minnesota using cash from the fraudulent cards that had been mailed to Ferngren. She and a co-conspirator later transferred more than $336,000 to cryptocurrency accounts controlled by at least two others overseas.

She also used the preloaded debit cards to withdraw more than $680,000 in cash between June 2020 and October 2020.

The indictment against Ferngren spelled out how romance scams also provided a source of income during the conspiracy. In one example from March, Ferngren deposited checks for $95,900 and $97,500, respectively, that were sent by a victim from Colorado under the direction of one of Ferngren’s co-conspirators.

The scheme also misappropriated victims’ personal information and funds. In April 2022, Ferngren received a check for $150,000 that purported to be drawn against a home equity line of credit in the names of two Florida residents without their knowledge or approval.

Edina law enforcement warned Ferngren about her suspicious banking activities in April 2020. The next year, the Minnesota Commerce Fraud Bureau notified her that she may have engaged in fraudulent activity, including romance scams. In both cases, the indictment said, Ferngren warned her co-conspirators rather than put a stop to the scheme.

Staff writer Stephen Montemayor contributed to this report.