Gift Card Fraud Rampant: Two Chinese People Suspected of Prime Hook Scheme

In recent years, gift card scam cases have been rampant in the United States, with fraudulent methods constantly emerging, leading to losses amounting to hundreds of millions of dollars. Recently, two Chinese citizens were criminally charged in California, Oakland, for their alleged involvement in a large-scale gift card scam.

It is reported that these two suspects stole gift cards from retail stores and tampered with them, then placed the manipulated cards back in the stores. They used electronic surveillance methods to steal the amounts customers had loaded onto the cards. This method is highly deceptive as consumers usually believe purchasing gift cards in physical stores is secure.

According to the Michigan Attorney General’s Office, 46-year-old Guangji Zhang and 35-year-old Huachao Sun appeared in court in Waterford, Michigan on March 7. They each face one felony charge of “engaging in a criminal enterprise” (punishable by up to 20 years in prison) and two charges of “possession of fraudulent or altered transaction devices” each. During the investigation, the police seized about 3,000 tampered gift cards.

Ricky Lin, legal advisor at Los Angeles Yingda Law Firm, reminds consumers to carefully inspect gift cards for any signs of tampering before purchasing or reloading them. He also revealed that 1,500 gift cards involved in this case were sent out in four batches, with one batch not successfully delivered due to address issues. Using trackers, the authorities successfully traced the suspects’ illegal activities to multiple locations.

Retailers affected include Target, CVS, Walgreens pharmacies, and Albertson’s, with Target suffering the most significant losses. Criminals regularly check the balances on the cards, swiftly transferring funds once they detect deposits. Additionally, they recruit buyers to purchase Apple products and other goods at discounted prices to launder the proceeds.

The Department of Homeland Security (DHS) has initiated “Project Red Hook” to combat criminal syndicates engaging in the theft or alteration of gift card information for illegal fund transfers. It is reported that the suspects in these cases are predominantly of Chinese descent. Investigators believe that these cases involve multiple criminal organizations, with the proceeds possibly being used for activities like drug trafficking or human trafficking.

It is understood that most of the individuals involved in the United States have returned to China after amassing substantial wealth, with the main crime bosses believed to have profited up to ten million dollars.

Ricky Lin advises consumers to choose reputable retailers when purchasing gift cards and carefully inspect the packaging for any signs of tampering. If any suspicious activity is observed, they should immediately report it to the retailer or authorities.