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Gift cards probed in Apple purchases

Apple store exterior.

(CNN) — New York Police investigators are probing whether three men arrested last week with a stash of Apple products possibly bought with gift cards altered with stolen credit card data may have ties to a broader network of scammers, a law enforcement official said.

Prosecutors in Brooklyn charged the three suspects, who were arrested on Thursday following a traffic stop.

In their car, prosecutors allege, the men carried 17 Apple iPad Air and 11 iPad Mini tablets, 7 iTouch players, one X-Box, and 9 $25 iTunes cards.

They also had a stash of 39 gift cards with magnetic strips that had been altered to carry stolen credit card data, according to court documents.

Investigators believe they used similarly altered gift cards to buy the Apple haul from Target stores in Brooklyn and Long Island, a law enforcement official said.

The arrests followed disclosures by Target that the retailer had been the victim of a major breach that may have exposed the credit and debit card data of as many of 40 million shoppers who patronized Target stores in the three weeks after Thanksgiving.

The timing of the arrests and the Target breach prompted New York Police financial crimes investigators to alert the U.S. Secret Service which is investigating the Target breach.

There is no indication that the Brooklyn arrests are related to the Target matter.

Police and other local authorities routinely turn over information on credit card thefts to the Secret Service, which investigates such crimes.

A Secret Service spokesman declined comment beyond saying the agency continues its investigation of the Target case.

Law enforcement officials and experts said altering gift cards, or other so-called stored-value cards, is a favored way for scammers to launder money and stolen credit cards.

Rather than making new fake credit cards with the stolen data, thieves use gift cards to avoid detection since cashiers are less likely to be suspicious.

Point of sale machines in stores read the magnetic strip data and won’t detect that a gift card is carrying stolen credit card data.

The-CNN-Wire
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