Eight men have been charged in a credit card fraud scheme of up to $1 million targeting major retail chains in Ohio and run by telephone by a federal prison inmate in New Jersey, the FBI said Thursday.
Seven Cleveland men and a Trenton, N.J., man serving time in Fort Dix, N.J., are charged with conspiracy to commit wire fraud, the FBI said. Seven of the men were arrested Wednesday night and Thursday morning; the eighth was at large.
The ring targeted credit cards issued by stores including Lowe's, Home Depot, Best Buy, Macy's, Nordstrom, Saks Fifth Avenue, Sears, Staples and hhgregg, where the men bought high-priced items including a tractor and household appliances, the FBI said. The cards involved were backed by financial institutions including GE Capital, Citigroup Financial and HSBC, and the amount lost was between $500,000 and $1 million, the agency said.
"These are stores that we all frequently visit with store credit cards that many of us carry in our wallets," said C. Frank Figliuzzi, special agent in charge for the Cleveland Division of the FBI.
Items found during a raid in Cleveland on Thursday included a John Deere tractor, big-screen televisions, snow-blowers and stoves, some in their original packaging, Figliuzzi said.
The investigation involved communities across northeast Ohio, including many with strong retail presences, including Strongsville, Beachwood and Richmond Heights.
The men are accused of wrangling personal information from credit card customer service departments and using the information to become authorized users of cards issued to other people.
Investigators said he men used "a variety of tactics" to obtain credit card information from customer service employees and then used it to add authorized users to the accounts or change account holder information.
When making purchases, the men had store employees look up account information by showing IDs or giving the last four digits of a card holder's Social security number, the FBI said.
Items purchased were resold, authorities said.
"They would purchase big-ticket items often from a shopping list supplied by prearranged buyers who treated this ring as their own personal shoppers," Figliuzzi said.
He said that the Thursday raid was at a home used to store merchandise and that the site was equipped with a surveillance system being monitored by a man within reach of a loaded gun and another man sleeping with a shotgun.
Figliuzzi said the men were arrested after authorities put electronic surveillance on an unauthorized cell phone being use by the prison inmate and undertook physical surveillance of the Cleveland men during their shopping trips.
Figliuzzi said he believes the New Jersey man met one of the Cleveland men in an Ohio prison.