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Wednesday, April 5, 2017

Group Sentenced For Massive Stolen Debit Card Scheme

In March 2017, Senior U.S. District Judge Edward J. Lodge sentenced four for wire fraud conspiracy. Back in December 2016, a federal grand jury convicted six members of the same “crew” on conspiracy to commit wire fraud charges. The four members that Judge Lodge sentenced together received an additional host of independent convictions. And all of them consisted of wire fraud and aggravated identity theft.

Two members of the so-called “Traveling Crew” pleaded guilty one-week prior to the hearing and then testified against the original four.

Alejandro Hidalgo, Dilcia Martinez-Marquez, Enrique Matos-Herrera, and Jose Salazar-Quintana received the strictest sentences—save for Martinez-Marquez. In addition to the conspiracy to commit wire fraud convictions that the entire crew received, the four main defendants received convictions for the charges listed below.

The federal grand jury convicted Hidalgo of six counts of wire fraud and aggravated identity theft; Martinez-Marquez of four counts of wire fraud; Matos-Herrera of four counts of wire fraud and aggravated identity theft; and Salazar-Quintana of seven counts each of wire fraud and aggravated identity theft. Hidalgo, Matos-Herrera, and Salazar-Quintana, received 48 months in prison and three years of parole. Martinez-Marquez, Hidalgo’s spouse, received only 21 months and three years of parole.

And the other two, Luis Mejias-Fiz and Eslay Monzon, pleaded guilty to conspiracy to commit wire fraud. Acting U.S. Attorney Rafael M. Gonzalez, Jr., announced that the co-defendants received 25 months in prison and 21 months in prison, respectively. The press release explained that, “in handing down the sentences in this case, Judge Lodge noted that the jury only needed to deliberate for a couple hours.”

Throughout the course of the trial in December, the jury heard that the group used stolen debit card numbers in a massive fraud scheme. The group purchased numbers from a darknet vendor. They bought and exclusively used numbers from Idahoans who banked at Idaho Independent Bank.

From there, they used card writing equipment to encode Walmart and Walgreens store gift cards. They sourced completely blank store cards from a provider of some sort. Factory employees or retail associates are often the preferred route for obtaining blank cards. Blank cards are magnetically consistent and anyone with simple card writing equipment and basic knowledge of the magnetic tracks can encode them with F2F encoded dumps.

Through undisclosed methods, the group reached that point—a reprogrammed, formerly blank, store gift card that carried a balance, thanks to the stolen card numbers. Then, with freshly forged Walmart gift cards, the group purchased new, “genuine” gift cards or other items of value. This procedure repeated with every stolen card number from the darknet vendor until the group amassed a $30,000 debt. And not that they intentionally stopped at $30,000 in damages – law enforcement caught up with them at that dollar amount.

In October 2015, the Meridian Police Department arrested the group. They shared a vehicle, so police arrested the entire group in a single move. The press release credited the public, in part, for the arrest, “thanks to numerous tips.” Law enforcement recovered thousands of dollars in gift cards and merchandise after the arrest. Additionally, investigators recovered the computer “used to execute their scheme.”

In addition to the prison time, the judge ordered a $30,600 restitution from the group as a whole.
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