Four Mexican nationals joined forces with Russian hackers to counterfeit thousands of credit cards and make over $400,000 in fraudulent purchases over two years in Tucson and elsewhere in Arizona, federal prosecutors here said.
The conspiracy included about 25 people, court records show. The indictment included four named defendants, all of whom pleaded guilty in federal court in Tucson to conspiracy to commit bank fraud and aggravated identity theft, and two whose names were redacted.
The cards were used to buy Apple iPhones, designer clothing, electronics, gift cards and other items that were sold for profit in Mexico. Prosecutors said the conspirators made 5,800 counterfeit credit cards from over 300 financial institutions by the time the fraud was uncovered.
Most of the hundreds of fraudulent purchases occurred between 2013 and 2015 and involved $500 to $3,500 each time, federal prosecutors said.
The group used stolen credit-card information sent by email from Russia, Ukraine and Tajikistan to Hermosillo, Sonora, and later to Tucson, where it was printed onto counterfeit cards in an apartment on River Road, according to documents filed in U.S. District Court in Tucson.
Jorge Williams Araiza, 28, was sentenced Sept. 12 to three years in prison. Javier Ramirez Villegas, 36, was sentenced Aug. 23 to four years in prison. Both men were accused of being the “shoppers” who used the counterfeit credit cards at retail stores in Tucson and the Phoenix area, court records show.
Anwar Barragan Flores, who prosecutors believe led the scam, wired money to individuals in Ukraine and Tajikistan to pay for the stolen credit-card information, court records show.
He and Rey Martinez Lopez, who is accused of printing and distributing the counterfeit cards, both pleaded guilty in November 2016. Martinez’s sentencing is scheduled for the first week of November, and Barragan will be sentenced Sept. 29. Martinez faces up to eight years in prison and Barragan faces between six and 12 years in prison.
How it worked
Prosecutors said Barragan “micromanaged” every detail of the scam, such as buying the stolen account information, how many credit cards to make, where to shop, what to buy and the dates of the trips into Arizona.
Barragan used email and instant messaging apps to outline the specific times, places and methods of shopping excursions, prosecutors said.
In one chain of messages from June 2014, Barragan instructed the “shoppers” to run yellow lights to make sure they were not being followed by police officers while leaving a store in Glendale, and wrote, “It’s not like you are murderers.”
During the conspiracy, Barragan owned several pawn and loan shops, as well as Victory Rent-A-Car, in Hermosillo and Nogales, Sonora. He frequently arranged for his “shoppers” to drive his company’s rental cars into the United States to make purchases, records show.
In February 2014, Williams and an uncharged co-conspirator were stopped while trying to drive into the United States through a Nogales port of entry, but they were released from the port’s waiting area when customs officers did not find contraband in their car.
Later that day, Homeland Security Investigations agents received a confidential tip and found 105 counterfeit credit cards in a trashcan in the port’s waiting area, court records show.
When Williams first became involved in the scam, defense lawyer George Soltero said in court documents, he was told by an unidentified man over the phone to go to a convenience store in Phoenix, where he would find 15 gift cards in a small box outside the store.
After Williams left money in the box for the gift cards, the unidentified man told Williams in which stores he could use the gift cards to buy diapers, a baby crib and other items for his family. Soltero argued that Williams never knew Barragan and did not agree to have more credit cards printed in his name.
Bert Vargas, the defense lawyer for Ramirez, said in court documents that Williams, Ramirez and the two defendants with redacted names were “minor participants” and their sentences should reflect their limited roles as “shoppers.”
Vargas argued that Ramirez used stolen account information from nine victims, totaling $5,500 in purchases, rather than the 434 credit cards prosecutors alleged were in his name.
In February 2016, Barragan was arrested while attempting to return to Mexico from a family vacation in California.
After searching his car at the port of entry in downtown Nogales, customs officers found more fraudulent credit cards under the driver’s seat and in his wife’s purse.
Weeks later, Barragan called his wife from the detention center and told her to erase his phone and computer accounts, prosecutors said in court documents. He also told one of his employees to delete all the files from his laptop.
The email account used in the conspiracy was deleted four days after his arrest from a computer in Hermosillo, Sonora.
Barragan’s defense attorney, Jesus Romo Vejar, argued Barragan never owned the credit-card-making device nor instructed his wife to delete any information related to the investigation. He also claimed Barragan did not recruit Martinez, Williams and Ramirez.
All the men in the conspiracy were ordered to pay back the $413,000 they made in profit from reselling the goods in Mexico.
Romo argued the amount of money the defendants owe is much lower than the government claims, no more than $130,000.
U.S. Attorney’s Office spokesman Cosme Lopez declined to comment on the ongoing case. None of the defense attorneys for the group responded to requests for comment.