Published: January 09, 2009 09:36 pm      

HPD investigating massive credit card scam

Huntsville Police began a massive investigation into an international fraud ring on Friday after arresting a Houston woman with more than 100 credit card numbers in her possession Thursday afternoon.

At 1:45 p.m. Thursday HPD officers Lance Schulz, Matthew McDaniel and Christopher Myers responded to the Huntsville Wal-Mart after Wal-Mart staff alerted them to a possible fraud in progress. Detectives Ken Foulch and G.P. Shearer, who were already in Wal-Mart on unrelated police business, also responded.

When the patrol officers arrived on scene they detained 47-year-old Deborah Ann Washington of Houston after loss prevention officer Nick Lopez observed her attempting to use several pre-paid debit cards at a register. Foulch and Shearer arrived soon after and initiated a search of Washington.

“No one had searched her yet,” said Shearer. “So we thought it necessary to search her and she consented. When we searched her purse we found a pretty thick stack of cards, so we thought that warranted further investigation.”

Washington was asked to accompany the officers to the Huntsville Police Department. Before leaving, Washington consented to allow the officers to search her vehicle.

In the vehicle, officers found more evidence of fraud.

“In her vehicle we found several typed pages of credit card numbers and access codes, many of which had names with them,” Foulch said. “There were also numerous slips of paper with names and credit card information written on them, along with more cards.”

In total, Washington was found to have 38 credit and debit cards in her possession, and at least 62 credit card numbers written down in her vehicle and purse, along with $3,000 cash and several gift cards.

“Simply being in possession of someone else’s information like that is a felony,” said Lt. Kevin Lunsford of the HPD’s Criminal Investigation Division. “If you have over 50 pieces of that information, it becomes a first degree felony.”

Washington was transported to the Huntsville Police Department and interviewed by Foulch and Texas Ranger Steve Jeter. During the interview Washington confessed to both possessing the information and using it for fraudulent purposes.

According to Washington, she purchased the pre-paid debit cards illegally through an unknown source. She was then instructed to go to various stores by this source.

“What she was doing was going to Wal-Mart and buying small items like clothing,” Foulch said. “Then she would pay for the items with the pre-paid cards and ask for the remaining balance from that card on a gift card. She would then sell the gift card for a fraction of its balance to make money.”

“It’s a money laundering scheme,” Shearer said. “Each of those debit cards was imprinted with someone’s credit card information. So, it looks like a simple pre-paid card, but in reality every time it’s swiped it accesses someone else’s account. So, when she takes the balance off that card and puts it on a gift card, she’s not only getting rid of primary evidence, she’s also getting cash from that account.”

After obtaining the gift cards, Washington would either use them or sell them at a discounted rate to earn cash.

“She’s sold several $500 gift cards in this area for $200, earning a profit for herself” Shearer said. “It’s easy money if you don’t get caught, but you always get caught.”

During the initial hours of the investigation, detectives also established a financial connection to the Ukraine, leading them to believe that this scam is part of an international criminal group.

“This is a multifaceted operation,” Foulch said. “These scams are pretty common right now, and many of them come from overseas. We’ve seen many of these lately coming through Nigeria, but this is the first one we’ve seen from the Ukraine.”

One of the owners of the credit cards in Washington’s possession, a Houston woman, has already reported the theft to Huntsville’s police, the first of what detectives anticipate will be a steady stream of victims.

“So far, she’s the only local victim we’ve found,” Foulch said. “Some of these numbers come from as far away as Florida, New York and New Jersey, so there’s a long paper trail for us to follow.”

With one day of the investigation complete, Foulch and Shearer already anticipate a lengthy and complex search not only for all of Washington’s victims, but also for her sources and associates in the scam.

“We’re not sure as of yet what her source was,” Foulch said. “We know that she had several credit card numbers that were somehow obtained after being used at hotels. We also know she owns a cleaning business, so she may have been getting information that way.”

“We just urge everyone to protect their credit card information just as they would their social security information,” Lunsford said. “Shred your credit card records and check your account often.”

As for the future of the case, Foulch anticipates that several local cases, including previous incidents involving Washington, could be resolved through Washington’s arrest.

“Now we’re getting into the paper trail,” Foulch said, “which we hope will lead us to both more victims and more suspects. We will be coordinating this case with state and federal agencies, and we anticipate a lengthy investigation.”

Washington has been charged with fraudulent use of identifying information with 50 or more in her possession, a first degree felony, and is currently being held at the Walker County Jail. Her bond was set Friday by Precinct 4 JP Judge James F. Mature at $40,000. If convicted, she could face life in prison.