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Breaking News in the Industry: September 2, 2016

Father, Son Arrested In $50K Gift Card Fraud Raid

A tip to Crime Stoppers led Miami-Dade police to a home where they found thousands of counterfeit credit and gift cards. Police raided the home overnight. In addition to the phony cards, they also found skimmers, scanning machines, encoding equipment, a money counter and about 13 grams of crystal meth.

Two men – father and son – who lived in the home, Luis Perez-Luis and his son Jose Perez, were led away in handcuffs, charged with more than 400 counts each of various credit card fraud offenses, but police indicated in court documents that the number of charges could reach into the thousands after they’ve had an opportunity to count all the seized credit and gift cards.

Police say the stolen gift cards that they seized were worth a minimum, of $50,000. The thousands of phony credit cards they said they found contained information gathered by skimmers installed on ATMs, gas station pumps and store counters.

The lead detective said this skimming and counterfeit operation was different than others he’s investigated because it utilized gift cards. “This is one of the larger busts that we’ve come across lately, especially because of the gift card aspect of it. We haven’t seen much of that. You can say that this is one of the first times we’ve run into these individuals who are stealing the gift cards off the racks,” said Detective Marcos Rodriguez.

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The stolen gift cards, for stores like Macy’s and Kohls, would be skimmed for their codes. They would then be returned to the stores where they were stolen from. A log of the skimmed codes was kept and a check online would tell if they had been purchased and activated. “Once they found that these gift cards were loaded with money, they would then redeem the cards by encoding other gift cards with these credit card numbers and either sell them in the street or use themselves for personal purchases,” said Rodriguez.

As for the father and son, Miami-Dade Circuit Judge Mindy Glazer Thursday afternoon ordered them held on more than half a million dollars bail each. In order to post bond, they will have to prove the money is “clean,” not proceeds from illegal operations. [Source: CBS Miami]

Man Gets 47 Years in Jail for Shoplifting on Third Strike Case

Yesterday,  a shoplifter in Palmdale, California, was sentenced to 47 years to life in state prison. The reason for the long sentence? It was his third strike.

On March 5, 2014, the defendant, Geoffrey Scott Bueno aka Spanky, 42, shoplifted various items from a home improvement store in Palmdale. When store security sought to detain him, he kicked and wrestled with the officers. Later it was found he had methamphetamine in his possession. In addition, Bueno was on parole at the time.

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Bueno’s first conviction was in 1993 for manslaughter. He’d been charged with being the driver in a gang-related shooting. In 2009, Bueno received his second conviction for second-degree robbery. In this case, the offense was also shoplifting and he also fought store security officers. It was for this conviction he was on parole at the time of his third offense, the shoplifting in Palmdale.  [Source: Santa Monica Observer]

United Airlines Employee Allegedly Steals $130K in Jewelry from Passenger

A United Airlines employee allegedly stole $130,000 worth of jewelry from a passenger’s bag earlier this month at Denver International Airport, according to the Denver District Attorney’s office. Rafael Magana, 42 of Commerce City, Colorado, has been charged with one count of felony theft.

The jewelry included a $35,000 pair of diamond earrings and a “pearl encrusted bracelet,” also valued at $35,000, according to the Denver police search warrant. The United passenger was traveling Aug. 8 from Aspen, Colorado, to Denver when she discovered a cosmetics case containing the jewelry had fallen from her suitcase in the Aspen airport, the warrant states.

She learned that Aspen airport staff had found the case and put it on her flight. Upon arrival at the Denver airport, the cosmetic case was unloaded and put onto a cart with other carry-on luggage, which was then put into an area near the gate where passengers can grab their bags as they leave the airplane, the search warrant states. Video from the Denver Airport’s surveillance system appears to show Magana “taking possession of the … cosmetic case … and intentionally wrapping the case with a white piece of [printer] paper,” at the gate, according to the statement of probable cause provided by the District Attorney’s office.  [Source: ABC News]

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Alibaba Failing to Deliver in Fight Against Fakes, Say Brands

As a U.S. trade agency considers whether to add Alibaba Group Holding Ltd. to a list of marketplaces notorious for selling counterfeits, nearly a dozen trade groups are complaining that the Chinese e-commerce giant isn’t doing enough to root out fake goods.In a letter sent to Alibaba in late August, trade groups including the Union des Fabricants, the French Federation of Leather Goods and the Federation of the Swiss Watch Industry said that while Alibaba has taken “a great number of concrete steps” in its attempt to address fake items, it has failed to deliver on many promises that could permanently reduce the volume of counterfeits on its platforms.

For instance, the group wrote, Alibaba’s software doesn’t detect images of fake products that are blurred, even though the e-commerce company has said that such images violate its rules. Brands want to trust Alibaba, but the e-commerce giant’s repeated promises to tackle counterfeits “compel us to focus on what has not improved,” according to the letter seen by The Wall Street Journal. “Trust cannot be hostage to delay.”

Alibaba said Thursday that it appreciates the letter’s constructive tone and looks forward “to working closely with the brands represented by the trade groups, many of whom have already built successful online businesses on Alibaba platforms.” Alibaba has said previously that it will spare no expense in tackling fake goods sold on its platforms. [Source: The Wall Street Journal]

Dropbox Employee’s Password Reuse Led to Theft of 60M+ User Credentials

Dropbox disclosed earlier this week that a large chunk of its users’ credentials obtained in 2012 was floating around on the dark web. But that number may have been much higher than we originally thought.

Credentials for more than 60 million accounts were taken, as first reported by Motherboard and confirmed by TechCrunch sources. The revelation of a password breach at Dropbox is an evolution of the company’s stance on the 2012 incident — the company initially said that user emails were the only data stolen.

Dropbox disclosed in 2012 that an employee’s password was acquired and used to access a document with email addresses, but did not disclose that passwords were also acquired in the theft. Because Dropbox stores its user passwords hashed and salted, that’s technically accurate — it seems that hackers were only able to obtain hashed files of Dropbox user passwords and were unable to crack them. But it does appear that more information was taken from Dropbox than was previously let on, and it’s strange that it’s taken this long for the breach to surface. [Source: Tech Crunch]


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