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Major credit card fraud ring in Ohio

On April 1, 2010, Cleveland Division of the Federal Bureau of Investigation (FBI) and United States Attorney for the Northern District of Ohio announce the arrests eight  individuals who are charged with conspiracy to commit wire fraud. Seven of these individuals are from Cleveland and one is from Trenton, New Jersey. They are Andre Reese, age 36, of Cleveland, Ohio; Dimorio McDowell, age 33, of Trenton, New Jersey; Jeffery McClain, age 39, of Cleveland, Ohio; Kevin McBride, age 33, of Cleveland, Ohio; Michael Sailes, age 50, of Cleveland, Ohio; Edwin Peavy, age 51, of Cleveland, Ohio; Daniel Ashford, age 36, of Cleveland, Ohio; and Jay Paul Williams, age 27, of Cleveland, Ohio.

According to the press release of the Cleveland Division of the Federal Bureau of Investigation(FBI), these individuals targeted  "private label" credit card accounts which are accounts offered to consumers specific to a particular retail chain and are backed by independent financial institutions. The retail chains used for the scheme include Lowe's, Home Depot, Staples, Best Buy, Gregg, Macy's, Nerds, Saks Fifth Avenue, and Sears. The financial institutions include GE Capital, Stagger Financial, and HSBC.

The FBI press release explains how the scheme worked: "These individuals conspired together to contact creditor customer service departments and utilized a variety of tactics to obtain legitimate and active credit account information. This information was used to defraud employees of these customer service departments into adding an authorized user to an account, or change the account holder information to reflect that of individuals that were part of this conspiracy who would act as "runners." After these "runners" were added as an authorized user, the "runner" along with one or two associates would then go to a victim retailer and request that a store employee look-up their account from personal identifiers that were obtained from the scheme."

Since these individuals were added as authorized users. they would purchase items from the retail chains and sell those items to other customers. This scheme has caused losses that range from $500,000 to $1,000,000 to the financial institutions.

 

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