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Breaking News in the Industry: April 5, 2018

Man who planted gas pump skimmers gets 9 years in federal prison

A Florida man was sentenced Tuesday to nine years in federal prison for planting credit card skimming devices inside gas pumps in Madison, Wisconsin, that were used to steal credit card numbers from unsuspecting customers. U.S. District Judge William Conley said he didn’t impose the sentence on Alejandro Arias-Perez lightly, but said he felt compelled to hand down the sentence to send a message to others about the seriousness of “rampant credit card fraud that occurs, and you being at the leading edge of it.” “What is sadly apparent from the record is how capable you are and how greatly misdirected your skills have been,” Conley said. “You said you did this to support your family, but you did this at the expense of an awful lot of people.” In all, federal authorities said, Arias-Perez, 29, of Miami, had gathered about 50,000 stolen credit card numbers from which he created cards that were used to methodically make fraudulent purchases at stores in a number of states of items that were eventually sold for cash. In November, Arias-Perez pleaded guilty to possession of a credit card skimming device that was placed at a Shell gas station. A second count, for placing a skimmer at a BP station was dismissed as part of a plea agreement. Under advisory federal sentencing guidelines, because of the scope of the thefts and Arias-Perez’s role as leader of an enterprise of more than five people, he could have received a sentence between 12½ and 15½ years. Conley said that range seems high for a white-collar crime, but given the need to send a message about credit card fraud, “it doesn’t strike me as an outrageous range.”  [Source: Wisconsin State Journal]

Man allegedly hits retailer for $86,000 in refund fraud since 2012

Analytic reporting identified a Gilbert, Arizona, man who reportedly stole nearly $86,000 worth of items from Home Depot. Chandler Police report that from February 2012 to February 2018, Antoine Elkik, 57, made nearly $86,000 by stealing goods from Home Depot stores in Maricopa County. Police say Elkik would legitimately purchase products, put them in his car, then immediately go back to the store with his receipt and select the same products and exit the store. If he were questioned, he would show the sales associate the receipt from the prior purchase. He would later, reportedly, return the stolen products to the store for a refund. Police say he purchased 402 items since 2012, returning all of them for refunds. Home Depot Organized Crime Investigators said, “Antoine was identified through analytical reporting in which he was showing a high amount of refunds.” He was arrested on March 27 and has been charged with 30 counts of retail theft.  [Source: NBC2 News]

Smugglers used aerial drones to sneak $80 million in iPhones into China

Chinese authorities have arrested 26 people who were part of an iPhone smuggling operation between Hong Kong and the mainland city of Shenzhen. The criminals used aerial drones to connect two 660-foot cables between two high-rise buildings, and then passed as many as 15,000 iPhones per night across the border. According to Reuters, the state-owned Legal Daily reports that it was the latest escalation in smuggling operations that have been going on for years. “It’s the first case found in China that drones were being used in cross-border smuggling crimes,” customs officials said. The arrests were made in February as part of a joint anti-smuggling effort between authorities in the two cities. It’s unclear from the reports exactly which drones were used, but Drone Life speculates that at least one was a modified DJI Phantom 4, judging from the images released by Chinese media. Ironically, the drone may even have been manufactured in Shenzhen, which is a Chinese tech hub and home to a DJI plant. Once the cable was attached between the buildings, the smugglers sent individual packages of 10 iPhones across. Working in the dead of night, they were able to pass as many as 15,000 phones per night across the border. Over a six-month period, that added up to 500 million yuan ($79.8 million) in refurbished iPhones.

Although the majority of iPhone manufacturing is done in China, taxes and fees make it prohibitively expensive to own one, and there’s a thriving black market for smugglers. An iPhone that costs $1,000 in the U.S. may run upwards of $3,000 in China. One woman was recently caught at the Chinese border with more than a hundred phones and 75 luxury watches strapped to her body. Other enterprising criminals have used Twinkie boxes, coffee tins, and toothpaste containers.    [Source: Digital Trends]

- Digital Partner -

More than 1,000 people avoid jail time, record through Adult Pre-Arrest Diversion Program

A recent program in Florida that helps people committing minor offenses avoid jail time is working by cutting costs at the jail, according to the Pinellas County Sheriff’s Office. In 2017, Pinellas County avoided booking more than 1,700 people into the county jail through their Adult Pre-Arrested Diversion Program, or APAD, which launched in 2016. More than 30 percent of the people admitted to the program were charged with retail theft. As a result, offenders admitted into APAD do not face jail time. Instead, they complete community service or pay fines. The Pinellas County Sheriff’s office said in a letter released earlier this year that the program is working by cutting major costs of taking these offenders to jail. Sheriff Bob Gualtieri also says it creates consequences for breaking the law. Some stores say they will continue to turn offenders into police no matter what. Lesley McDaid, co-owner of One Amazing Find in Tarpon Springs, recently captured a woman on security camera stealing more than $140 of high-end chalk paint. “It’s infuriating to thing that somebody can just so quickly think that they can come into our home, which is what I consider my store, pick up whatever they feel like and walk out the door,” McDaid said. Frustrated, she posted the security camera footage on her store’s Facebook page asking for the public’s help in identifying her. The video got thousands of shares. Eventually, someone identified the thief and police were able to contact her. Tarpon Springs Police said that woman was referred to the APAD program.   [Source: ABC Action News]

Restaurant’s web site leaks millions of customer records

Panera Bread’s web site for the American chain of bakery-cafe fast casual restaurants by the same name, leaked millions of customer records including names, email and physical addresses, birthdays and the last four digits of the customer’s credit card number, for at least eight months before it was yanked offline earlier Wednesday, KrebsOnSecurity is reporting. The data available in plain text from Panera’s site appeared to include records for any customer who has signed up for an account to order food online via The St. Louis-based company, which has more than 2,100 retail locations in the United States and Canada, allows customers to order food online for pickup in stores or for delivery. KrebsOnSecurity learned about the breach after being contacted by security researcher Dylan Houlihan, who said he initially notified Panera about customer data leaking from its web site back on August 2, 2017. Fast forward to early this afternoon, exactly eight months to the day after Houlihan first reported the problem, and data shared by Houlihan indicated the site was still leaking customer records in plain text. Worse still, the records could be indexed and crawled by automated tools with very little effort.  [Source: KrebsOnSecurity]

Locking shopping carts to prevent thefts

IN Oregon, local Fred Meyer stores are rolling out a new device to hopefully keep shoplifters from leaving with merchandise. At the Johnson Creek Fred Meyer, the grocery carts now have locking devices on the wheels. The system is designed to prevent shoplifters from loading up a cart and then heading out the doors without paying. How it works is customers go through a checkout lane where there’s a deactivator for the locking device, including at self checkout. After paying, it’ll deactivate the carts from locking, so customers can easily leave the store, according to Tabitha Shelton, the assistant manager at Fred Meyer. “It does help prevent loss in our stores, definitely,” Shelton said. “We would have certain incidents where things go out the door, so now we can be more aware of it and it sets off a camera, so our loss prevention associates can look at it and determine why it did go off.”  The locking devices also help alleviate the store loss prevention team’s job as it’s tough for them to detain someone inside the store suspected of shoplifting when the thief could say they were planning to pay. There are some technical bugs they’re working out with the carts. Some people paid, but their carts still locked as they tried to leave. However, loss prevention does have a quick-release device to help them get on their way. “It does need to be right in front of the sensor for about 30 seconds — normally the time it takes to unload a shopping cart,” Shelton said. The carts have signs on them explaining how the locking devices work — and customers seem to like it. “I support that idea. I think you should be able to protect your business,” customer Tom Fiora said. Fred Meyer said it has 7 stores in the Portland area with locking devices on the carts and more on the way.   [Source: KOIN6 CBS News]

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