A Virginia Beach couple has been sentenced in a $31.8 million counterfeit coupon fraud scheme, according to a Tuesday announcement from the U.S. Eastern District of Virginia Attorney’s Office (USAO-EDVA).

“These two defendants have been sentenced and held accountable for operating one of the largest coupon fraud schemes ever discovered in the United States, resulting in over $31 million in losses to victims across the country,” USAO-EDVA Acting U.S. Attorney Raj Parekh said.

Lori Ann Talens and her husband Pacifico Talens, Jr. sold counterfeit coupons to coupon enthusiasts on social media including Facebook and Telegram. Lori used a computer in her home to design and produce the coupons.

The Talens pleaded guilty to mail fraud in April. Pacifico was sentenced to seven years. Lori Ann Talens was sentenced to 12 years, and the USAO-EDVA adds that she also committed Medicaid and Supplemental Nutrition Assistance Program fraud worth approximately $43,000 by not disclosing her husband’s income or her income from the coupon scheme.

“These counterfeit coupons were virtually indistinguishable from authentic coupons and were often created with inflated values, far in excess of what an authentic coupon would offer, in order to receive items from retail for free or for a greatly reduced price,” the announcement states.

Lori Ann Talens shipped the coupons to the buyers, who paid using online methods including Bitcoin and Paypal. Pacifico helped ship the coupons and performed other administrative tasks. Eventually, one of their customers filed a report to the Coupon Information Center (CIC), a coalition of manufacturers. The CIC purchased coupons, confirmed they were counterfeit and contacted the U.S. Postal Inspection Service. Federal law enforcement searched the Talens’ home and found almost $1 million in counterfeit coupons, alongside over 13,000 separate counterfeit coupon designs on the Talens’ computer.

In March, Progressive Grocer reported that studies from Inmar Intelligence show that coupon fraud costs retailers more than $100 million annually.

Inmar Fintech President John Helmle told Progressive Grocer, “It is clear that coupon fraud is a major issue within retail, and there is major work that needs to be done to combat it.”

Inmar provides free point-of-sale technology to detect coupon fraud. “We are committed to our pledge to end coupon fraud within three years and look forward to the day when the retail industry is not losing millions of dollars to counterfeit coupon activity,” Helmle said.

“Coupon fraud is not a harmless crime. Lori Ann Talens and her husband operated an audacious fraud scheme that stole more than $31 million directly from retailers and manufacturers,” Special Agent in Charge of the FBI’s Norfolk Field Office Brian Dugan said in the USAO-EDVA announcement. “The FBI investigates these matters aggressively because this kind of fraud ripples through the economy, and unfortunately it is the innocent consumer that ultimately pays the price.”

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Eric Burk is a reporter at The Virginia Star and The Star News Network. Email tips to [email protected].