A California mom has pleaded guilty to running an organized retail crime ring that stole millions of dollars in beauty products. ultimate beauty and Sephora resale Amazon As part of her sentence, she must now repay the retailers.
Michelle Mack is the founder of five years in prison After being arrested in a San Diego suburb in December 2023, she reached a plea deal with prosecutors on Jan. 9 and was ordered to pay $3 million in restitution to Ulta, Sephora and some other retailers.
As part of the deal, Mack, 54, gave up her 4,500-square-foot mansion in Bonsall, Calif., which sold in December for $2.35 million. Property records show.
California Attorney General Rob Bonta’s office said any funds left over from the sale will be used to repay the debt after the bank debt is paid off, and Mack and her husband, Kenneth Mack, 60, will Repay the remaining funds “over time.”
It’s unclear whether Mack has a mortgage on the property, but she originally purchased it in 2021 for $2.29 million, according to property records.
It’s unclear how the compensation will be divided among Mack’s victims. She admitted to running a criminal syndicate Primary Target Ulta Storesbut it stole from other retailers, including Sephora.
The compensation may be a drop in the bucket compared to the net revenue retailers like Ulta bring in each year, but it’s still a significant windfall. Ulta declined to comment on the compensation, including how the funds will be used or accounted for in its financial statements. The company did say it was proud to work with law enforcement officials in the investigation and was grateful for their efforts.
“This case demonstrates that through close collaboration between retailers, law enforcement and prosecutors, as well as legislative support, we can have a meaningful impact on organized retail crime and hold criminals accountable for perpetuating the problem. Liability,” said Dan Petrousek, senior vice president of losses. Ulta Beauty’s precautions, said in a statement.
Sephora did not respond to a request for comment.
David Johnston, vice president of asset protection and retail operations at the National Retail Federation, said it’s common for retailers who suffer theft to seek compensation for their losses, but the amounts have only recently begun to reach millions of dollars.
“The level of theft … is not as severe and widespread as what we have seen over the last four years or so,” Johnston said. “When we start taking these organized retail crime gangs through the judicial process , that would be what we would expect to see. This is a huge loss, a complex organization, involving many individuals, and then sentences and compensation commensurate with the crime.
He warned that damages rarely fully cover a retailer’s lost revenue and it could take years for defendants to fully repay fines.
“Reparations are part of the judicial process, but there is no guarantee that victims will receive all or any of the funds,” Johnston said. “It depends on the ability to obtain compensation from the offender, and the fact that the compensation is actually paid and split between multiple The process of victim sharing.”
Last year, Bonta filed a series of felony charges against Mack and her husband, accusing them of running what Mack’s office described as a massive retail crime ring that resulted in the theft of an estimated $8 million worth of beauty products, CNBC previously reported. According to CNBC, the operation spans at least a dozen states.
Mack himself was not accused of stealing the product. Instead, police said she recruited a group of young women Taking the items away so she can resell them on her Amazon storefront for a fraction of the retail price.
The investigation, led by the California Highway Patrol, drew national attention and revealed the complex nature behind some retail crime rings and how bad actors exploit online marketplaces to conduct their crimes. Selling stolen products.
Last summer, Mack was sentenced to five years and four months in state prison, but was placed on probation starting this month. Mack’s husband, Kenneth, was also sentenced in connection with the case, so the judge agreed to delay her sentencing so she could care for their children while Kenneth was incarcerated.
Additional reporting by Scott Zamost and Courtney Regan
