Four Men Indicted in $1.7 Million Water Heater Fraud Scheme

St. Louis, Mo. (KFMO) - Federal prosecutors in St. Louis say four men have been indicted in connection with a nationwide fraud scheme involving used water heaters, counterfeit serial numbers and more than $1.7 million in alleged losses.

According to the indictment filed in U.S. District Court, 22-year-old Aron Suarez-Ruiz, 38-year-old Jose Antonio Alvarez-Raya, 41-year-old Daniel Barreras-Magallanes and 27-year-old Francisco Aguilar-Ortiz are each charged with one count of conspiracy to commit wire fraud.

Court documents allege the scheme operated from at least March 2026 through May 18, 2026. Prosecutors say the men obtained used water heaters in California and transported them across the country in rented trucks.

Investigators allege counterfeit labels with false serial numbers were attached to the water heaters before they were returned to home improvement stores for refunds in the form of gift certificates.

According to the indictment, the gift certificates were then used to purchase power tools. Federal prosecutors estimate the alleged fraud scheme caused losses exceeding $1.7 million.

One example outlined in the indictment claims that on May 14, 2026, Alvarez-Raya and Suarez-Ruiz returned water heaters with counterfeit serial numbers at stores located in Wentzville, Cottleville, St. Charles, St. Louis County and Arnold.

The indictment also alleges that on May 18, 2026, Barreras-Magallanes and Aguilar-Ortiz returned two used hot water heaters at a store in Wentzville.

Federal motions seeking detention of the defendants claim the group made multiple stops at stores while traveling to Missouri. Prosecutors also allege Alvarez-Raya recruited Suarez-Ruiz into the operation, while Aguilar-Ortiz recruited Barreras-Magallanes from Mexico.

Court documents state Alvarez-Raya, Aguilar-Ortiz and Barreras-Magallanes are in the United States illegally. Prosecutors say Alvarez-Raya had been living in Washington state, Aguilar-Ortiz was from the Los Angeles area and Suarez-Ruiz was living in Louisville, Kentucky.

Alvarez-Raya, Barreras-Magallanes and Aguilar-Ortiz appeared in court Thursday and pleaded not guilty to the charges.