A retail crime 'queenpin' will pay millions in restitution to Ulta and other retailers for a theft ring.

• Michelle Mack, the accused "queenpin" from California, will have to pay millions of dollars in restitution to Ulta Beauty and other retailers for running a retail crime ring that targeted their stores.
• Last year, Mack reached a plea bargain with prosecutors and was sentenced to five years and four months in prison.
• In order to fulfill her restitution, Mack was obligated to sell her Bonsall, California, mansion.

The woman who admitted to operating a retail theft ring and stealing millions of dollars in beauty products from Sephora and Ulta will have to repay those retailers as part of her sentence.

Michelle Mack, who was sentenced to five years in prison on January 9, 2024, after being arrested in San Diego in December 2023, was ordered to pay $3 million in restitution to Ulta, Sephora, and other retailers as part of a plea deal with prosecutors.

In exchange for the sale of her 4,500-square-foot mansion in Bonsall, California, which was sold for $2.35 million in December, Mack, 54, relinquished her property.

The remaining funds from the sale, after paying off bank debts, will be used for restitution, and Mack and her husband Kenneth Mack, 60, will repay the remaining amount "over time," according to California Attorney General Rob Bonta's office.

According to property records, Mack bought the property for $2.29 million in 2021, but it's unclear if she had a mortgage on it.

The crime ring that Mack admitted to running primarily targeted Ulta stores, but it also stole from other retailers, including Sephora.

Although the restitution is a small amount compared to Ulta's annual net income, it would still be a welcome addition to the company's finances. Ulta did not disclose how it would use the funds or include them in its financial statements, but it expressed pride in partnering with law enforcement on the investigation and thanked them for their efforts.

According to Dan Petrousek, senior vice president of loss prevention at Ulta Beauty, this case shows that by working closely with retailers, law enforcement, prosecutors, and legislative support, we can effectively combat organized retail crime and bring those responsible to justice.

Sephora didn't return a request for comment.

According to David Johnston, vice president of asset protection and retail operations at the National Retail Federation, restitution is a common practice among retailers who have been stolen from, but the amounts have only recently begun to reach the millions.

"According to Johnston, the level of theft has not been as substantial and commonplace as it has been in the past four years. He expects this to change as organized retail crime groups go through the judicial process. The loss is substantial, and the organization involves multiple individuals. Sentencing and restitution will be necessary to address the crime."

Restitution may not fully compensate for a retailer's lost income, and it can take a long time for a defendant to pay off fines in full.

"According to Johnston, restitution is a crucial aspect of the judicial process, but it does not guarantee that the victim will receive any funds. The amount of restitution received depends on the offender's ability to pay and the process in which it is shared among multiple victims."

In 2019, Bonta accused Mack and her spouse of running a large-scale retail crime network, resulting in an estimated $8 million in stolen beauty products, according to CNBC. The operation extended across multiple states, as reported by CNBC.

Instead of accusing Mack of stealing the products herself, police stated that she enlisted a group of young women to take the items so she could resell them on her Amazon store at a lower price.

The investigation led by the California Highway Patrol attracted national attention and exposed the intricate methods employed by some retail crime rings and how malicious actors can utilize online marketplaces to sell stolen merchandise.

This month, Mack began serving her five-year and four-month sentence in state prison, which was delayed due to her husband's incarceration.

Additional reporting by Scott Zamost and Courtney Reagan