13 indicted in NYC for $3 million credit card fraud
NEW YORK --Thirteen people were indicted Friday on charges stemming from their roles in credit card frauds that resulted in more than $3 million worth of illegal purchases across the country, prosecutors said.
The credit card account information was stolen from customers who visited restaurants in Manhattan's Chinatown and other parts of the New York metropolitan area, as well eateries in Florida, New Hampshire, New Jersey and Connecticut.
Some members of the group stole customers' information; some made the counterfeit cards; others shopped for merchandise; and finally someone bought the goods for cash, Manhattan District Attorney Robert Morgenthau said.
Morgenthau said 12 of the 13 people indicted are in custody and are expected to be arraigned Monday. All of the defendants are being charged with fourth-degree conspiracy, punishable by up to four years in prison, and seven are also being charged with second-degree grand larceny, which carries a penalty of up to 15 years.
One of the accused, identified by prosecutors only as "John Doe," was still being sought by authorities.
When the 35-year-old ring leader was arrested Wednesday, Morgenthau said, police found 296 fake credit cards, $200,000 cash, numerous Rolex watches and expensive handbags in his Brooklyn home.
The district attorney said conspiracy leaders recruited and managed people who worked as waiters and provided them with small hand-held "skimmers" that read and recorded information on the magnetic strips of patrons' credit cards.
The leaders, some of whom worked in the restaurants with their recruits, then collected the skimming devices and paid the waiters $35 to $50 for information from each credit card stored in the devices, Morgenthau said.
He said the conspirators operated in about 40 restaurants from November 2005 until this week.
The suspects used the stolen information to create counterfeit credit cards by encoding the information on high quality credit card blanks, Morgenthau said.
The bogus cards were embossed and encoded with a fake name rather that the name of the person who held the account number, Morgenthau said. This allowed a single fake driver's license or other ID to be used as verifying identification.
Shoppers in the group received 20 to 40 cards and were expected to buy at least $1,000 worth of merchandise with each card. They were paid about 15 percent of the retail value of their purchases.
Assistant District Attorney Aaron Karczmer, lead prosecutor in the case, said some shoppers spent as much as $15,000 to $20,000 on individual credit cards.
Another person then sold the goods to a stolen-goods dealer or to electronics and computer stores in the metropolitan area, Morgenthau said.
