Dozens Charged in $1M Scheme To Fence Apple Goods

UPDATED: The Manhattan district attorney’s office on Wednesday announced the break-up of an identity theft and fencing ring responsible for around $1 million in fraudulent purchases from Apple stores around the country.

Apple storeUPDATED: The Manhattan district attorney’s office on Wednesday announced the break-up of an identity theft and fencing ring responsible for around $1 million in fraudulent purchases from Apple stores around the country. District Attorney Cyrus Vance and the U.S. Secret Service in a press conference said that 27 individuals have been charged in the scheme, which involved the purchase of stolen credit card account information, which was used to purchase goods at Apple retail stores on the East and West coasts.

The individuals charged were mostly from the Brooklyn, New York, area, but the fraudulent activity was widespread, involving Apple stores in New York, California, Connecticut, Nevada, Georgia and Florida. Charges include Grand Larceny and Forgery. The individuals are charged in two indictments totalling 57 counts on two separate conspiracies stretching from June, 2008 to December, 2010.

Eight individuals were charged on Tuesday, with the remainder schedule to be charged on Wednesday, according to a spokeswoman from the DA’s office. The spokeswoman was not able to confirm how many of the 27 had been arrested.

In a complaint, the DA charged a 28 year-old individual, Shaheed Bilal, with being the ring leader of the scheme the creation of fraudulent cards and the management of the fraud network from behind bars. It is unclear why Bilal was incarcerated.

According to the DA spokeswoman, the credit card account information was purchased online from a “Web portal” offering stolen data for sale. Bilal is alleged to have stored the stolen credit card numbers as attachment in a Web based e-mail account accessible to his co-conspirators. Those co-conspirators used the numbers to create bogus credit cards that were given to straw purchasers with instructions to patronize Apple stores, buying iPods, iPhones and other devices, as well as gift cards and clothing. Apple stores across the country were targeted starting in May, 2009.  Purchases ranged as high as $3,000 at individual stores and the total amount of merchandise involved is valued at close to $1 million, the complaint said.

Much of that merchandise was passed on to an intermediary, named in the complaint as “Gil Einhorn,” who then sold it at a profit, according to a statement from the DA.

This is just the latest large-scale identity theft ring broken up in the New York-New Jersey area in recent months. In September, 2010, the FBI and the U.S. Attorney’s Office for the District of New Jersey unveiled charges against 53 individuals in connection with an identity theft and fraud ring. In March, 2009, authorities disrupted an identity theft ring that used crooked bank insiders to raid the checking accounts of 350 New York corporations of millions of dollars.

Homepage image via Yoshikazu Takada‘s Flickr photostream

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