Police warn consumers of nationwide scam involving gift cards
Cards purchased at stores can have their value stolen immediately
Cards purchased at stores can have their value stolen immediately
Cards purchased at stores can have their value stolen immediately
Police in New Hampshire are warning consumers about a scam using gift cards that's targeting people across the country.
Investigators said the crime is so quick and unexpected that it's catching thousands of victims.
"It's very sophisticated for that level of efficiency to be taking place," said Concord Det. Steven Carter.
Carter said scammers use gift cards to steal from their victims.
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"It all starts in a retail store," Carter said. "The suspects will go into the store and remove hundreds of gift cards off the shelves."
From there, Carter said, the cards are mailed to other conspirators who work meticulously to un-package the gift cards in order to access information.
"They'll take the PIN code off. They'll record the card number, the PIN code," he said. "Then, the cards get sent back into different people's hands, where they will sneak them back onto the shelves to make them look as if they're new and never been touched."
That sets the trap for an unsuspecting shopper. Carter said the scammers are monitoring the gift cards for when funds are added, and when that happens, they pounce.
"Minutes after money is put on those cards, the funds are being spent," Carter said.
That leaves the consumer with a useless gift card.
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The scam first came on Concord's radar in December. Police said that since then, five people, all with ties to China, have been arrested for their alleged roles in the crime.
They have pleaded not guilty and are being held while their cases move through the court system.
The investigation is ongoing, so Carter couldn't speak of specifics in the case, but during an evidentiary hearing for two of the suspects, Carter testified that detectives found more than $100,000 worth of Apple products in a Nashua apartment. Police believe they were purchased with information from the stolen gift cards.
"We found a large quantity of electronic devices, some concealed under the bathroom sink, as well as a bulk of the products inside of suitcases in the closet," Carter testified.
News 9 Investigates has learned that the investigation then led detectives to Salem, where they found an additional $6 million worth of electronics in a 3,000-square-foot warehouse.
"It's very organized, and, unfortunately, it's very profitable for the criminals," said William Crogan, assistant special agent in charge for Homeland Security Investigations.
Crogan said the scam is being seen across the country.
"When I speak to my colleagues at HSI or other law enforcement agencies across the country, it's something that they're seeing happening on an increasing level, as well," he said.
Crogan said New Hampshire's tax-free status is particularly attractive to scammers.
"Because they get more bang for their buck when it comes time to spend those stolen funds," he said.
As for who's behind the scams, Crogan said it varies, but it's mostly criminal organizations from overseas.
"And what they're doing is they're driving the illicit economies for crime around the world, whether it's drug trafficking or fraud," he said.
The U.S. Department of Homeland Security has launched a task force called Project Red Hook in an effort to combat the scam.
"Investigators here in New Hampshire can talk to investigators across the country or the world inside the project team and share information, so we can find out about where this organization operates, where they're going, where they've been," Crogan said. "And that's important for us, because it gives us evidence to eventually charge people for crimes."
