A crafty crime ring honed a very 21st-century scheme, authorities say: gleaning stolen credit-card numbers online from data thieves, deploying the numbers for a million-dollar, cross-country Apple store shopping spree and using social media to boast about it all.
The scam was so successful that one member branched off to start his own syndicate, and the original ringleader taught his girlfriend how to keep the scheme going while he was in jail, authorities said as they detailed the scheme Wednesday. Arrests of the 27 suspects began Tuesday and were continuing.
The Brooklyn-based group compromised hundreds of accounts as members scooped up laptop computers, iPads, iPhones and other popular products at Apple Stores around the nation, from New York to Portland, Ore., and from Orlando, Fla., to Wauwatosa, Wis., Manhattan District Attorney Cyrus R. Vance Jr. and the U.S. Secret Service said.
At the heart of the "S3" group was Shaheed Bilal, 28, who enlisted his girlfriend, Ophelia Alleyne, and his brothers, Ali, 23, Isaac, 25, and Rahim, 21, to help oversee the scheme, authorities said.
"This was, in essence, a family affair," Vance said.
It eventually sprawled out to include more than a dozen people who were recruited to act as shoppers, several men accused of reselling the ill-gotten goods and a whole spin-off group, authorities said.
Shaheed and Ali Bilal, 23, and Alleyne, 29, have pleaded not guilty to grand larceny and other charges and are being held on various bail amounts. Alleyne's lawyer, Verena Powell, said she "is proclaiming her innocence"; Ali Bilal's lawyer, Daniel Gotlin, declined to comment.
Shaheed Bilal's lawyer didn't immediately return a telephone call Wednesday; the names of lawyers for the other Bilal brothers weren't immediately available, and no telephone numbers for the brothers could be found.
After buying the stolen account numbers through underground websites, the group stored the data in shared e-mail accounts and then printed up phony Visa and MasterCard cards in the shoppers' names, using equipment commercially available and intended for businesses that create magnetic keycards and the like, authorities said.
Then the shoppers would fan out to use the cards in Apple Stores in major cities such as Los Angeles, Atlanta, Las Vegas and St. Louis, and smaller communities such as Short Hills, N.J., and Stamford, Conn., according to an indictment. The thieves sometimes charged more than $3,000 worth of products in one stop, but other transactions were as small as a $53.45 tab for a laptop case, the indictment says.
Visa Inc., based in San Francisco, and MasterCard Inc., based in Purchase, N.Y., representatives said the companies recommend that merchants look carefully at cards and match signatures to customers' names. But it's unclear whether any of that would have flagged the allegedly fraudulent transactions in this case; the cards would have the shoppers' names but the victims' account numbers encoded in their magnetic stripes, authorities said.
Cupertino, Calif.-based Apple Inc. declined to comment on the case.
Shaheed and Isaac Bilal at point used the social networking site Twitter to trumpet an online video of themselves bragging about using forged credit cards at a restaurant, authorities said. Bilal's Twitter accounts and the video have apparently been removed.
Shaheed Bilal was so enmeshed in the scheme that while jailed in an unrelated case from May to December 2010, he told Alleyne from jail how to run the scam, authorities said. And when Bilal was released, he got back into business with a new e-mail handle: "rightbackonit," authorities said.
Meanwhile, one of the men recruited as a shopper, Anthony Harper, split off in September to run the scam with an 10-person ring of his own that hit Apple Stores in locales including Washington, D.C., and Pittsburgh, prosecutors said.
Harper, 28, remains at large, and prosecutors didn't know whether he has a lawyer. No telephone number for him could be found.
The two groups kept some of the merchandise but took the rest to men who bought it at below-market prices and resold it at a profit, authorities said.
Authorities say they seized three guns, $300,000 in cash, and bank accounts during the investigation.
"These crimes can move quickly from the Web to the streets," Vance said.
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