Inmate Ran $1 Million Credit Card Scam Using Cell Phone & Secret Shoppers

Armed with only an illegal cellphone and a cadre of secret shoppers, an inmate at the nation’s largest single federal prison was able to coordinate upwards of $1 million in credit card fraud in the outside world.

According to a rather exhaustive piece in the Cleveland Plain-Dealer, the inmate, already serving time in New Jersey for credit card fraud, would spend up to 17 hours a day on his phone, calling directory assistance to ask for the numbers of people with names that matched those of his cohorts on the outside.

He’d then call these people, posing as a staffer from a utility or cable provider, trying to wrest even a small portion of identifying info — birth date, some digits from their Social Security Number — from them. Then he’d call up the credit card companies, often pretending to be a fraud investigator at the same company, trying to turn that scrap of information into all the relevant details he would later need. If the employee became suspicious, he would hang up and try again until he found someone who he could sweet talk.

Once he had all the info to steal someone’s identity, he would once again contact the credit card folks, this time to either add one of his shopper’s as an approved user on the card or to have his shoppers’ name and info swapped in for the real user.

With that nasty business out of the way, the inmate’s secret shopper crew could now go about their business of running up huge credit card tabs on the heisted accounts. If stores checked with the credit card providers, these shoppers would show up as approved users, so they were able to go about their business unimpeded.

The shoppers would go into stores with detailed list of things to purchase, which would then be sold to pre-arranged buyers for around half of the retail value, all of it profit to the criminals.

It wasn’t until a detective from Ohio began investigating an incident at a local Lowe’s, where one of the shoppers had purchased over $14,000 of stuff with someone else’s card, that the inmate’s plot began to unravel. The investigation would eventually involve the U.S. Attorney’s office, the federal prison system and a wiretap on the inmate’s phone.

After investigators figured out how the inmate was directing his crew from behind bars, they identified a handful of stores that were to be visited by the secret shoppers. The stores were to allow the transactions to go through while investigators followed the shoppers and other crew members to find out how the goods were being distributed.

When police finally swooped in, the inmate was found to have three phones — it’s not known if they were used in the scam — along with notebooks full of names, credit card and Social Security Numbers.

Even after he was taken to Ohio to face these new charges, the inmate still managed to use the prison pay phone to continue his scheming. A search of his new prison cell turned up a six-page spreadsheet containing credit card information, a packet of receipts, canceled checks, bank statements and credit-card images.

He even attempted to pass himself off as a member of the U.S. Marshal’s service to get himself transferred to another prison.

The inmate eventually pleaded guilty to wire fraud and ID theft charges and was sentenced to an additional 14 years in prison. Authorities have asked that he be labeled “a serious telephone abuser” so that his access to prison pay phones will be limited.

Inmate’s huge credit-card scam unravels when Bath Township detective connects dots [Clevand Plain Dealer]