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Breaking News in the Industry: October 25, 2018

Navy man convicted of scamming 2,500 credit card numbers

A US Navy man will spend three years and six months in prison for his involvement in an identity theft ring that stole more than 2,500 credit card numbers and fraudulently purchased $340,000 in consumer products in 2012. Jarrod Langford, 27, pleaded guilty to conspiracy to commit credit card fraud and aggravated identity theft while he was an active duty Navy member at Lemoore Naval Air Base, according to US Attorney McGregor Scott.

Langford’s preferred scam was to use the stolen credit card information to purchase vouchers for items through popular online third-party platforms such as Groupon. Langford used victims’ information to fraudulently buy vouchers for mattresses, wristwatches, jewelry and hair removal products. Other cons involved the unauthorized resale of Microsoft software keys on eBay.  Scott says Langford used illegal online marketplaces to procure the credit card numbers and other identifying information, including addresses, phone numbers and email addresses. He would share his methods to endear himself to and build trust with other “prospective customers and co-schemers,” according to Scott.

Langford’s conspiracy further involved the use of a virtual private network in an attempt to hide his true location and conceal his criminal activities from authorities. The Florida man was brought to justice after an FBI investigation revealed he had committed the fraud. He was sentenced on Monday in a Fresno courthouse following a guilty plea in June.   [Source: Visalia Times Delta]

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Couple charged with 15 counts of shoplifting

A Cartersville, Georgia, couple was arrested Monday by the Bartow County Sheriff’s Office (BCSO) charged with a total of 15 counts of theft by shoplifting in what is described as a “tag-swap” investigation. Asset protection associates from Walmart, 101 Market Place Blvd., requested assistance from BCSO investigators following numerous shoplifting incidents between July 21 and  October 11.

Surveillance video of the transactions revealed the same male and female using Kool-Aid packets to scan a low price while appearing to scan and purchase larger, more expensive items. The pair would pay using an electronic bank transfer card used by recipients of the Supplemental Nutrition Assistance Program, formerly known as food stamps, and leave with the expensive merchandise.

Zachary Holmes, 41, and Terra Saaed, 38, were arrested Sunday and booked into the Bartow County Jail. Holmes was charged with three counts of theft by shoplifting and Saaed with 12 counts of theft by shoplifting. Holmes posted bond and was released while Saaed is still being held pending bond. [Source: The Daily Tribune News]

Consumers will spend 4.1% more than last year during the holidays.

Consumers say they will spend an average of $1,007.24 during the holiday season this year, up 4.1 percent from the $967.13 they said they would spend last year, according to the annual survey released today by the National Retail Federation and Prosper Insights & Analytics. “The holidays are just around the corner and consumers are ready to shop,” NRF President and CEO Matthew Shay said. “Confidence is near an all-time high, unemployment is the lowest we’ve seen in decades and take-home wages are up. All of that is reflected in consumers’ buying plans. Retailers expect strong demand this year, and are prepared with a wide array of merchandise while offering strong deals and promotions during the busiest and most competitive shopping season of the year.”

Tariffs on a wide range of consumer goods from China took effect last month, but Shay noted that retailers imported record volumes of merchandise ahead of the tariffs this summer and said any effect on pricing during the holiday season is expected to be minimal. The consumer survey comes on top of NRF’s annual holiday spending forecast, which takes into account a variety of economic factors to project overall spending rather than per-consumer spending. The forecast estimated that holiday retail sales in November and December will be up between 4.3 percent and 4.8 percent over 2017 for a total between $717.45 billion and $720.89 billion.

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Consumers will spend in three main categories during the holidays – gifts, at $637.67; non-gift holiday items such as food, decorations, flowers and greeting cards, at $215.04; and other non-gift purchases that take advantage of the deals and promotions throughout the season, at $154.53.   [Source:]

Casino employee grabbed more than $58,000 from gambling facility

After police  in Florida found $58,500 in a car belonging to a Seminole Casino Coconut Creek employee, he was arrested and accused of stealing from the gambling establishment, police say. Former cash operations worker Christomy Christalin, 22, came to the attention of his employers when surveillance video showed him leaning into a kiosk that dispenses money to customers. The video did not show Christalin actually taking money out of the machine, but it later was found to be short $4,600, according to a Seminole police report.

On October 10, police watched Christalin on surveillance video recorded while he was at work and driving in a garage at the casino that is at 5550 NW 40th St. in Coconut Creek. He appeared to put an empty money bag in a cart used to bring cash to a kiosk and later was seen removing a bulging money bag that appeared full, the report said. Christalin went to a men’s room, and when he left the restroom, the money bag appeared to be empty. He went to his car and was seen on video moving what appeared to be stacks of money between the seats, police said.

When detectives confronted Christalin, he denied stealing from the casino and told them he had $55,000 in his car that came from his gambling winnings. An audit of Christalin’s department found $58,500 was missing. After a search warrant was issued to police to search the car, they recovered the same amount, the report said. Christalin, of Lauderhill, was fired from his casino job, police spokesman Gary Bitner said. “This case shows the pervasive use of surveillance video at this casino and in fact, all casinos,” Bitner said. Christalin was arrested October 15. He faces a charge of grand theft greater than $20,000 and less than $100,000 and was freed on a $5,000 bond, court records show.   [Source: SunSentinal]

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Scammer sent to prison for ID fraud

David Romero, 63, pleaded guilty to one count each of identity fraud and forgery, both fourth-degree felonies in September. Ottawa County Judge Bruce Winters sentenced him to 17 months in prison for each charge and ordered the sentences be served consecutively for a total prison sentence of two years and 10 months. Romero originally pleaded not guilty to the charges, but he later accepted a plea deal. In exchange for pleading guilty to one count each of identity fraud and forgery, the other charges were dismissed. Judge Winters reasoned consecutive sentences were necessary to protect the public given Romero’s “history of criminal conduct,” according to court documents.

On Monday, the Ottawa County Sheriff’s Office was given a warrant to convey Romero to the Lorain Correctional Institute, where he’ll serve his sentence. Romoro was originally charged with 50 felonies, which included engaging a pattern of corrupt activity and multiple counts of identity fraud and forgery. The charge stems from a traffic stop on Ohio 2 made by the Ohio State Highway Patrol in March after Romero was allegedly speeding. During the traffic stop, the state troopers allegedly noticed criminal indicators and searched Romero’s van. The troopers allegedly found 26 fraudulent identification cards, 36 fraudulent credit card and about $16,000 worth of electronics.  [Source: Sandusky Register]

Apple’s ‘Zombie Check’ tool for iPhone repair fraud

Last week, The Information’s Wayne Ma reported about a sophisticated fraud scheme in which organized thieves would buy or steal iPhones, remove valuable components like the processor or logic board, swap in fake components, and return the purposefully-broken iPhones to receive replacements they could resell.

Apple became aware of the increasing fraud in 2013 and, in the years since, it has managed to “dramatically reduce” the rate of iPhone-related repair fraud in its retail stores, particularly in China, according to the report. One of Apple’s countermeasures was to develop diagnostic software that its retail employees could use to quickly detect fake parts in iPhones, the report said. To evade this tactic, however, many fraudsters started to intentionally disable the iPhones so they couldn’t be turned on and subjected to diagnostics.

Fraudsters even went as far as obtaining Apple customer records, including serial numbers, for iPhones that had already been sold in China. In some cases, the incorrect serial numbers would be etched on the back of the iPhones. To combat the use of stolen serial numbers, The Information reported that Apple came up with a screening method known as “Zombie Check” internally that tested whether serial numbers for the broken iPhones held for inspection were also associated with iPhones still using Apple’s online services like iCloud.

According to an internal Apple document obtained by MacRumors, the tool was initially limited to China, but Apple began rolling it out to Apple Authorized Service Providers around the world in February 2018. The aptly-named Serial Number Reader is a simple tool with a Lightning connector on one end and USB-A on the other. It is used to validate the serial number of an iPhone 6 or newer that will not power on by retrieving it directly from the logic board, although a source said it doesn’t always work.

Apple’s efforts appear to be working. Apple’s annual Form 10-K indicates that, in 2017, Apple’s warranty expenses decreased to $4.32 billion from $4.66 billion a year earlier. The serial number tool, it would appear, is quite effective.   [Source: MacRumors]

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