Chasing bad plastic tests the mettle of police, feds

ROCHESTER - When Rochester Police Sgt. Anthony Deluca said a credit card scam attempted by two New York men at Rochester Crossing last month was the tip of the iceberg, it could’ve been the understatement of the year, and it was only January.

Four days later more credit card high jinx by another pair of New Yorkers was thwarted at the Lilac Mall, again by Rochester Police.

While there were differences between the two cases as put forth by police and prosecutors, the basic premise is a constant: police say both pairs of men were attempting some variation of credit card fraud, which is as pervasive throughout the ranks of financial and commercial entities worldwide as it has ever been.

Deluca alluded to the sophistication of these types of criminal enterprises, noting that the suspects in the cases Rochester Police are now investigating are many levels away from the kingpins who likely orchestrated the caper.

Reports show that there are even underground “stores” where crooks can buy stolen credit card numbers for between $20 and $100 apiece that they can then seek to exploit, according to a website that deals with the security of financial instruments, krebsonsecurity.com.

To assist them in their investigation Rochester Police called in the Secret Service, the federal agency charged with keeping tabs on and desperately trying to stay one step ahead of the bad guys.

The problem is that credit card fraud has become as ubiquitous as crime, itself.

It used to be you had to watch out for the waitress swiping your card twice after a meal, or a gas station attendant writing your number on a piece of scratch paper after taking your card.

Those were the good old days.

Now credit card fraud runs the gamut from criminals on their own using skimmers to swipe numbers from gas stations and ATMs, to cyberhackers breaching entire merchant accounts to steal millions of numbers in an instant.

According to the Verizon 2013 Data Breach Investigative Report, more than 47,000 reported security incidents were recorded last year, with 621 confirmed data breaches. Over the entire nine-year range of the study, more than 2,500 data breaches have been identified along with 1.1 billion compromised records, or accounts.

The report by Verizon isn’t necessarily focused on the mom and pop skimming operations, but it shows the scope and sophistication of the online criminal element.

Virtually anyone can buy a skimmer online. They’re about the size of a pager and affixed to the device where a credit or debit card is inserted. Thieves retrieve the device after a period of time and credit and debit card numbers run in the interim are now in their hands.

The skimmers The Lebanon Voice saw for sale on a Google search were from China’s Guangdong province.All they need then is a supply of blank cards with the magnetic strip to which they load on the legit numbers and they’re off to the races, with your money.

Most of them cost several hundred dollars but promised aspiring criminals a quick and easy cash source.

Below a description of the hardware, purported thieves endorsed the products and exulted in comment boxes about how easy it was to make some easy money.

Sophisticated equipment can even be bought that allows the thief to collect the passcode of debit cards so they can then retrieve cash from ATMs and merchants that allow cashback purchases.

Strafford County prosecutors and Rochester Police argued in Rochester District Court that skimmers or some sort of major data breach were factors in the two Rochester cases, saying that the numbers on the front of the cards didn’t match the numbers coded in the magnetic strip on the back.

At many retail establishments clerks don’t even check the cards as they go through a cashier station, so if there’s money on the number encoded on the magnetic strip, the transaction is approved.

When the two men alleged to have bought several gift cards at Hannaford’s last month then came back into the store moments later to buy some more it drew managers’ attention, especially after they unsuccessfully tried to buy several more with different cards that came back rejected.

Therein lines one of the “rubs” for criminals. They often don’t know how much money is on the credit card, so they keep using it till it’s rejected and then can draw scrutiny from store security personnel.

However, if their buy is successful, they now have a “clean” gift card.

The two men suspected in the Hannaford incident were later arrested and charged with several felonies in connection with the alleged fraud, but at their probable cause hearing many of those charges were either reduced or thrown out.

Deval Rhodes, 22, of Elmont, N.Y., who had been charged with felony forgery, saw both charges dropped to Class A misdemeanors. Rhodes will also face a misdemeanor charge on marijuana possession during a March trial. Probable cause for his felony receiving stolen property charge, however, was not found.

Djeffry Louis, 20, of Rosedale, N.Y., meanwhile, saw his felony cocaine possession charge bound over to Superior Court where he faces possible indictment by a grand jury next month. Probable cause for Louis’ receiving stolen property charge was not found.

The two men after they left Hannafords reportedly went and bought or attempted to buy gift cards at several stores in the Lilac Mall as well as stopping to buy baby formula and Newport cigarettes at a Rochester CVS drug store, where they also allegedly used a bogus card.

Deluca stated the two men had close to 130 gift cards between them, including Home Depot and American Express.

He said they also had in their possession many cards on which information stored on the magnetic strip on the back of the card did not match the embossed information on the front.

Defense attorneys at the probable cause hearing sought to distance their clients from each other and the counterfeit cards, saying prosecutors hadn’t confirmed they weren’t in fact theirs.

Even though their charges were to a large degree reduced or tossed out, their high cash bail of $50,000 cash was continued.

The pair arrested at Rochester Crossings earlier in the month also had their cases bound over to Superior Court.

In that case, it is alleged the men bought several items at Lowe’s with fraudulently obtained credit cards.

Vic Washington, 44, of 203^rd St., Queens waived his probable cause hearing last month on four felony counts of receiving stolen property, while several charges regarding false IDs, theft by deception, forgery and possession of controlled/narcotic drugs were all nol prossed, meaning they won’t be prosecuted.

Aaron Young, 30, also of Queens, waived his probable cause hearing for felony identity fraud, while several other lesser charges regarding certain theft by deception and forgery charges were also nol prossed.

Prosecutors at the pair’s arraignment said the two men had obtained many credit numbers using night cameras to capture people’s credit card numbers as they checked into a Marriott hotel in New Jersey.

Interestingly, news accounts on Monday night reported that White Lodging, the company that maintains Marriott, Sheraton and Westin hotel franchises, apparently suffered a data breach that exposed guests' credit and debit card information in 2013, according to the security website noted earlier in this story.

Strafford County prosecutors, meanwhile, also alleged that the pair had at least one video stored on a cell phone that showed them in possession of vast sums of cash.

The two men are alleged to have entered Kohl’s on Jan. 9 and tried to use a bogus credit card to purchase items. When the clerk swiped the card, the rejection came from a credit card provider other than the one named on the card. After the pair left Kohl’s empty-handed, store managers contacted Rochester Police, who met up with the two men as they were leaving Lowe’s after purchasing several items using one of the bad cards.

Rochester Police arrested the pair and also confiscated “many” fraudulent credit cards and phony Indiana driver’s licenses.

Young and Washington are being held on $250,000 cash bail, Strafford County Jail personnel said today, however if any of the four suspects does come up with cash bail, the origins of that money will be scrutinized at a Nebbia hearing to determine if the money is legit and not stolen.

Rochester Police Capt. Paul Toussaint said last week that Rochester Police continue to investigate the case and continue to work with the Secret Service to try to determine the identity of possible victims in the case who might have seen their credit and debit accounts drained.

Toussaint said similar bogus credit card scams had been attempted in other New Hampshire communities, including Exeter and Dover.

Secret Service agents, though tight-lipped on their investigation into the Rochester incidents, said their Electronic Crimes Task Force and its 31 domestic command centers and two foreign outposts are kept ever-busy trying to foil new schemes to compromise credit card integrity.

One agent referred to recent massive hack jobs at Target, Neiman Marcus and Michael’s where perhaps millions of credit and debit accounts were compromised.

The most important thing the consumer can do to guard their accounts against identity theft and credit cards scams is to be vigilant and keep constant watch on all of their accounts, he said.