Four Men Accused of $1.7 Million Water Heater Refund Scam

ST. LOUIS - Four men have been indicted in St. Louis and accused of a fraudulent scheme involving the return of used water heaters in exchange for $1.7 million in gift certificates.

Aron Suarez-Ruiz, 22, Jose Antonio Alvarez-Raya, 38, Daniel Barreras-Magallanes, 41, and Francisco Aguilar-Ortiz, 27, were each indicted in U.S. District Court on Wednesday with one count of conspiracy to commit wire fraud. Alvarez-Raya, Barreras-Magallanes and Aguilar-Ortiz appeared in court Thursday and pleaded not guilty.

The indictment says that from at least March 2026 through May 18, 2026, the men obtained used water heaters in California and transported them on rented trucks to home improvement stores around the country. Using counterfeit labels with false serial numbers, the men returned the water heaters to the stores for a refund in the form of gift certificates, the indictment says. The men then used those gift certificates to purchase power tools, it says. The indictment alleges the scheme to defraud resulted in losses of more than $1.7 million.

In one example provided in the indictment, on May 14, 2026, Alvarez-Raya and Suarez-Ruiz returned hot water heaters labelled with counterfeit serial numbers at stores in Wentzville, Cottleville, St. Charles, St. Louis County and Arnold. On May 18, 2026, Barreras-Magallanes and Aguillar-Ortiz returned two used hot water heaters at store in Wentzville, the indictment says.

A motion seeking the detention of Alvarez-Raya says the men made multiple stops at other stores on the way to Missouri and that Alvarez-Raya recruited Suarez-Ruiz to participate. Aguilar-Ortiz recruited Barreras-Magallanes from Mexico, another motion says. Alvarez-Raya, Aguilar-Ortiz and Barreras-Magallanes are illegal immigrants, the motion says. Alvarez-Raya had been living in Washington state. Aguilar-Ortiz is from the Los Angeles area. Suarez-Ruiz was living in Louisville, Kentucky.

Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.

U.S. Immigration and Customs Enforcement's Homeland Security Investigations, the Arnold Police Department and the Wentzville Police Department investigated the case. Assistant U.S. Attorney Gwen Carroll is prosecuting the case.