Credit Card Fraud Ring Includes Waiters, Racks Up $3 M in Charges
The operation, which involved waiters in about 40 restaurants, racked up more than $3 million dollars worth of bogus purchases.
The waiters copied credit card information in food establishments located in several states, including New York, Florida, Connecticut, New Jersey and New Hampshire.
Subsequently the credit card information was passed on to other members who used the information to make purchases. Some produced fake credit cards, others performed the shopping.
When the 35-year-old ringleader was arrested last week, Manhattan District Attorney Robert Morgenthau said, "police found 296 fake credit cards, $200,000 in cash, numerous Rolex watches and expensive handbags in his Brooklyn home."
The conspiracy leaders began the fraudulent operation in November 2005 as they recruited and managed the waiters who were given small, hand-held "skimmers."
These devices allowed the waiters to quickly and transparently record the data off of the magnetic strips of the customer's cards.
For their part in the scheme, leaders paid the waiters up to $50 for the credit card information stored on the gadget.
The charges brought against the 13 members include fourth-degree conspiracy, which carries a maximum penalty of four years in prison. Seven members are additionally charged with second-degree grand larceny, which carries a maximum penalty of 15 years incarceration.
Credit Card Theft - Many Involved, Few Prosecuted
While several stories exist concerning credit card fraud online or from stolen computer data, this operation involved neither, and it represents the majority of crime in the industry. Additionally, credit card fraud has a reputation of occurring in bars and restaurants.
Yet credit card fraud often goes unpunished unless it meets a certain minimum, $2000 for the FTC, often only then do authorities act. The schemers are aware of this so typically make small purchases.
Additionally the credit card skimmers are easy to obtain and often include keypads to enter the card security code that is not included in the magnetic strip. So the code is of little value in these cases.
Improved encryption technology is being pursued to help reduce these credit card schemes.
In the meantime, check monthly statement closely and avoid using a debit card without selecting the credit card option. Failure to do so may allow criminal access to your PIN number and cash.
Source: Fox News (http://www.foxnews.com/story/0,2933,267601,00.html) April 21, 2007
Published by Donna Porter
Writer / Journalist -- A Yahoo News! Contributor Donna began her writing and internet career in 1995 in the health industry and became an early dot-com entrepreneur soon after. Masters certified in Internet... View profile
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- 12 of 13 members arrested, while John Doe remains at large.
- Operation ongoing since November 2005
- Criminals are not often deterred from credit card fraud.
15 Comments
Post a CommentIf there is some way to scam people, sadly there is always someone out there willing to try it.
Great article. It really makes you afraid to use credit and debit cards anywhere you have to hand your card to someone.
I have never heard of this type of crime. I am always amazed by the effort people will go to just to get rich quickly. I hope the thieves have to pay back every dime that they stole.
Informative. Thanks!
I have had this happen to me before and it really stinks, always use the credit card option since.
no 300 you cant get that on ebay-and if you do run across a credit card skimmer, make sure you report that! As a former rest. mgr for rests. in New Orleans b4 this type of thievery started, I can't imagine how responsible rests. let this fly under their radar-I hope they get even mmore of these thieves-I mean really, to have to worry about that while trying to enjoy eating out is really disturbing
Wow- that is awful that people would do that. Thanks for sharing this.
More and more I see reasons to rely on cash as much as possible.
"credit card skimmers are easy to obtain" - I can get that on eBay? Probably! Good article. Thanks. :)
Very good article. It's sad that so many of these cases are popping up more and more today.