Brothers plead guilty to stealing $1.4M in crazy online scam

Software glitch left open to crime that didn’t pan out for pair


Yes, a software glitch provided a measure of criminal temptation that may have appeared irresistible.

Yet what's most stunning about this story is that the two brothers - Andrew and Allen Chiu, ages 39 and 28, respectively -- could have believed that they'd get away with a caper that saw them place $23 million in fraudulent orders on

Either that or the most stunning part is the fact that they even had the gall to try, what with their having already been caught attempting to perpetrate a different scam against the same site just a few years earlier. (Maybe they wore disguises the second time. But why not pick on a different retailer just to up your odds a little?)

A press release from the United States Attorney's Office for the Western District of Washington reports:

According to records filed in the case, in 2008 the CHIU brothers were barred from ordering merchandise from because of excessive claims for refunds based on representations that merchandise had never been delivered.  However, both brothers continued to try to place orders with

Both men belong to FatWallet Inc., a membership based shopping community website that promotes various online retailers by providing coupons and cash back incentives for purchases.  FatWallet paid cash back rewards to the CHIU brothers for purchases made at various on line retailers, including  In January 2010, the brothers discovered they could exploit a computer programming error in Nordstrom's ordering system by placing orders that would ultimately be blocked by Nordstrom.  No merchandise would ship and nothing would be charged to their credit card.  However, Nordstrom would unknowingly continue to compensate FatWallet for the order, and the brothers would still receive the cash back credit from FatWallet.  Between January 2010 and continuing through October 2011, the CHIU brothers collectively placed more than $23 million in fraudulent orders through  The fraudulent ordering resulted in Nordstrom paying $1.4 million in rebates and commissions, with more than $650,000 in fraudulent cash back payments going directly to the brothers.

The error that permitted the continued payment of rebates in the ordering system has since been fixed.

The Chiu brothers are scheduled to be sentenced on July 13. The plea agreement calls for a recommended sentence of two years to 30 months, but the judge could ignore those parameters and give them up to 20 years.

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