Saturday, February 14, 2009

First Heartland Arrests, With New Twist To Bogus Gift Card Scheme

Evan Schuman writes on StorefrontBacktalk:

U.S. Secret Service and local law enforcement have confirmed the arrests of three Florida men on hundreds of counts of credit card fraud, using cards that police said were made using data stolen from credit card processor Heartland Payment Systems. But the arrests revealed a new kind of gift fraud technique, one where the fraudsters need never use identification and don’t have to pay for the equipment to manufacture bogus cards.

The Tallahassee arrests of Timothy Julsaint Johns, 21, Jeremy A. Frazier, 20, and Tony Acreus, 20, are very far from closing this case. Federal officials are still focusing on an overseas group—apparently in Eastern Europe—that accessed the data from Heartland. It’s not unusual for such groups to then sell the numbers in bulk to various smaller criminal groups, which then turn the data into bogus credit cards and false gift cards and then use those documents to purchase goods, which are then sold for cash.

Just this week, the Secret Service and the FBI issued an alert describing the methodology behind what it termed “a considerable spike in cyber attacks” against e-tailers. That detailed an alert typically means that authorities already are tracking the suspects, who most likely are fully aware they are being tracked. Hence, there’s little investigative risk to issuing an alert to try and minimize additional data theft attempts using the same procedures.

Meanwhile, the full impact of the Heartland breach has not been confirmed, but the number of financial institutions that say that they have been impacted by the Heartland continues to rise, now hitting 221.

More here.


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