Saturday, February 14, 2009

Heartland Footnote: Stupid Criminals Dept.

StorefrontBacktalk (SFBT) reports that three Florida men were arrested in the Tallahassee area using data stolen from credit card processor Heartland Payment Systems.

However, Timothy Julsaint Johns, 21, Jeremy A. Frazier, 20, and Tony Acreus, 20, the three who were arrested, are at the very end of the criminal food chain -- not the original perpetrators -- and were caught because of their own negligence.

According to SFBT, authorities said the three were arrested after being caught on Wal-Mart surveillance video using homemade Visa gift cards. A Florida law enforcement statement didn’t say the dollar value of the thefts associated with the three suspects, but indicated that "the total actual and declined fraudulent transaction in Leon County is currently in excess of $100,000. This amount is expected to be much higher as this investigation continues."

The thieves themselves, or perhaps co-conspirators, simply used an electronic coding device to overwrite the data on the magnetic strip of existing gift cards, rather than going to the trouble of embossing phony plastic credit cards. Notes Evan Schuman of SFBT, "If a thief grabs a credit card, it’s only a matter of hours -- and sometimes minutes —- before the theft is discovered and the bank invalidates that card worldwide. But if the thief uses that card to immediately purchase gift cards, it significantly extends their safety timeframe. Even once that credit card is deactivated, the gift cards are still valid. That continues until law enforcement tracks down the purchases and then identifies the specific gift card numbers. Different retailers have different levels of sophistication regarding gift card tracking.

"In this case, though, the suspects took such a long time to use all of the stolen credit card numbers that some had already been deactivated and the Wal-Mart gift card system flagged them as unacceptable."

In a related story, StorefrontBacktalk reports that "The Federal Bureau of Investigation and the Secret Service issued an unusually specific joint statement on Thursday (Feb. 12) warning E-tailers of 'a considerable spike in cyber attacks' against them and detailing the cyber thieves’ modus operandi and some suggested preventative tactics." Click HERE for more information.

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