Kentucky police uncover massive gift card scam worth estimated $1M; 4 men arrested
By Madeline Carter
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SAINT MATTHEWS, Kentucky (WLKY) — Four men are facing hundreds of charges in connection with a massive gift card scam uncovered by the St. Matthews Police Department.
On Saturday, officers discovered thousands of fraudulent gift cards linked to an organized crime scheme impacting people across the country.
Chief Barry Wilkerson told WLKY that the fake gift cards they recovered from suspects are estimated to be worth at least $1 million.
Wilkerson said a suspect was caught placing altered cards on the rack at the Kroger on North Hubbards Lane in St. Matthews. Surveillance video from Oct. 19 shows a man spending a long amount of time in the store’s gift card section. A store employee reported him to police, who discovered he was working with three accomplices.
“All the ones that we have caught so far have been Chinese Nationalists,” Wilkerson said.
Police arrested four men on Saturday: Chaoming Lin, Zhiqiang Huang, Huixing Yu and Tianlong Chen. Lin and Huang are charged with 999 counts of criminal possession of a forged instrument. Yu and Chen are each facing three charges: one count of criminal possession of a forged instrument, one count of fleeing or evading police and one count of engaging in organized crime.
They’re accused of opening gift cards at major retail stores to obtain their serial numbers, sealing them back in the original packaging and returning them to store shelves. Then, they would allegedly steal the money loaded onto the cards when activated.
“What are they using the money for?” Wilkerson said. “Is it tied to terrorism? I don’t know. That’s why we turn these cases over to the federal agencies so they can get a better look and a better grasp of what or how deep these cases are.”
St. Matthews police handed the investigation over to the United States Department of Homeland Security, which recognizes this as part of an organized crime scheme committed by the Chinese. The four suspects allegedly hit stores in New York, Pennsylvania, Ohio and Kentucky.
The Kentucky Retail Federation told WLKY this has become a growing problem in the commonwealth over the past year.
“Kentucky seems to be a center point just because we have three major interstates that crisscross the state,” said spokesperson Steve McClain.
According to McClain, the federation is planning to meet with Kentucky Attorney General Russell Coleman to push for stricter legislation to crack down on this crime at major retailers. Police told WLKY the consequences typically include just a short jail or prison sentence.
“Most of these cases are amended down, sadly, just to get them through the process,” Wilkerson said.
In the meantime, police are encouraging shoppers to be vigilant when buying gift cards from Kroger and other grocery or retail chains. They shared the following advice:
Inspect the packaging. If a gift card appears to be tampered with, don’t buy it. Keep the activation code receipt and pass it along to gift card recipients. Consider purchasing gift cards directly from the company instead of a rack at a major retailer, or buy gift cards digitally from the company’s official website. If you think you’re a victim of a gift card scam, report it to the gift card company right away and ask for your money back. You should also file a report with the police and the Federal Trade Commission.
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