Prison Inmate Charged With Running Major Department Store Credit Card Scam

Seven Ohio men between the ages of 27 and 50 were arrested last week and charged with conspiracy to commit wire fraud, after an investigation found evidence that they were gaining access to strangers’ store-issued credit cards to buy and resale merchandise. The group’s leader, who was also charged, is a 33-year-old inmate at Fort Dix, NJ. Investigators think he initially met one of the Ohio men in prison.

Committing this sort of retail fraud is a lot of work, mostly of the social engineering type, but the FBI says this group managed to steal from $500,000 to $1,000,000 from Lowe’s, Home Depot, Staples, Best Buy, hhgregg, Macy’s, Nordstrom, Saks Fifth Avenue, and Sears. Some of the bigger items bought include a tractor, big screen TVs, and stoves.

Here’s how it worked, according to the FBI:

In this scheme, these individuals conspired together to contact creditor customer service departments and utilized a variety of tactics to obtain legitimate and active credit account information. This information was used to defraud employees of these customer service departments into adding an authorized user to an account, or change the account holder information to reflect that of individuals that were part of this conspiracy who would act as “runners.” After these “runners” were added as an authorized user, the “runner” along with one or two associates would then go to a victim retailer and request that a store employee look-up their account from personal identifiers that were obtained from the scheme. At times, the “runners” had to show their valid ID or recite the last four digits of the account holder’s social security number as proof they were authorized to use the account. The “runners” would then purchase items and charge them to the account. The individuals involved in this conspiracy had customers who would then purchase these items from them.

“Eight Arrested in Connection with Major Cleveland-Based Retail Fraud Ring” [FBI]
“NJ inmate, 7 Ohio men charged in credit card fraud” [BusinessWeek]