A grand jury in a federal court in Lexington has indicted a man in a gift card scam that could have cost unsuspecting shoppers more than a million dollars.
The grand jury on Thursday indicted Yongjian You, 41, on charges of mail fraud and possession of counterfeit gift cards.
According to state and federal court records, Lexington police encountered you on July 8 at a Kroger supermarket on Bryan Station Road, where they found compromised Amazon gift cards on the shelves.
The indictment says gift card manipulation is becoming a new front for organized retail crime in the United States.
The scheme typically involves several steps and begins with the theft of gift cards from retailers. Those involved in gift card fraud target large retailers with high customer volume and fast inventory turnover, according to the indictment.
A person involved in the fraud then manipulates the cards in a way that ultimately gives him access to the money a buyer pays a store to load the cards, the indictment says.
The fraudsters achieve this by changing the PIN number on the card or replacing the barcode, the indictment states.
The people involved in the plot then put the compromised cards back on the store shelves.
They check when a compromised card is activated, such as through a balance inquiry, and then use it to purchase goods or remotely empty the balance using the altered information on the card, the indictment says.
When Lexington police arrested You on July 8, he had 54 gift cards that had not been tampered with. In his car were 871 tampered cards and 998 cards that had not been tampered with, the indictment states.
According to the indictment, police found five altered cards on the Kroger shelf at Bryan Station and a total of 216 altered cards at other Kroger stores in the area.
Surveillance cameras showed you at several Kroger stores in Lexington and Versailles.
Authorities also tracked down two packages containing a total of 2,651 gift cards that you allegedly sent to California on July 6 and July 8, one from Ohio and one from Lexington. The cards were likely intended to be altered as part of the scam.
The potential harm to consumers from the cards in You’s car and the cards he sent to California was $1,047,900, the indictment says.
In state court in Lexington, you were initially charged with criminal possession of a forged document.
A court document listed his address as Flushing, New York City.
The charge against him of mail fraud carries a maximum sentence of 20 years in prison.
