38 charged in fake credit card scam

March 6, 2008 4:29:03 PM PST
More than three dozen people have been charged in a fake credit card scam. Queens District Attorney Richard Brown and NYPD Commissioner Ray Kelly announced Thursday that the forged credit card and identity theft ring, based in Queens County and with roots in the Far East, has been successfully dismantled.

Thirty-eight people were indicted Wednesday.

The ring was allegedly responsible for stealing the personal credit information of scores of American consumers and costing these individuals, financial institutions and retail businesses more than $1 million in losses over the past year.

"Many of the defendants charged today are accused of going on nationwide shopping sprees, purchasing tens of thousands of dollars worth of high-end electronics, handbags and jewelry with forged credit cards that contained the account information of unsuspecting consumers," Brown said. "Particularly disturbing is the fact that, in a number of cases, the defendants are charged with using bogus documents to purchase airline tickets and then using those documents as identification to board commercial aircraft."

Brown said the principal defendants, 26 individuals, have been charged in a 174-count indictment. They are accused of being members and associates of an organized criminal enterprise that operated in Queens County and elsewhere and that, between February 2007 and February 2008, systematically schemed to defraud scores of unsuspecting consumers and financial institutions - such as American Express, Visa, MasterCard and Discover Card.

According to the indictment, the defendants fraudulently obtained account holders' checking and debit account numbers from a supplier in China, which were then used to manufacture forged credit and identification cards. Once the counterfeit cards were created, according to the indictment, they were ultimately given to teams of "shoppers" who were sent out on shopping expeditions in New York, Texas, Arizona and other areas of the United States.

They allegedly purchased high-end electronics and other merchandise, such as flat-screen televisions, laptops, designer handbags, game consoles and jewelry, which either had been requested or could easily be fenced and re-sold, typically over the Internet.

In a variation on the scheme, it is alleged, two members of the enterprise, working in tandem with a dishonest merchant in Queens County, conducted a "bust out" scheme in which large amounts of merchandise were charged to credit card accounts without any merchandise actually ever being purchased, thus causing a monetary loss to financial institutions and/or the true cardholder. In turn, the merchant allegedly would then provide the enterprise members with a cash percentage of the total amount in merchandise charged.