Thirteen people, including seven from Queens, were arrested for their alleged roles in running a multimillion-dollar gift card “washing” scheme, prosecutors announced Wednesday.
According to the DA’s office, the scam included buying credit card numbers from the dark web, going on shopping sprees with the legitimate gift cards and using an online option to exchange gift cards for cash, as well as laundering money through a Bronx check cashing establishment. The operation allegedly generated roughly $1 million every month for two years.
The main defendants in the operation are identified as Christopher Nathoo, 33, of Glen Oaks, and his brother Bryan Nathoo, 30, of Dix Hills, NY, both of whom allegedly ran the ring with their wives. They, as well as the 11 other defendants, face a 192-count indictment with enterprise corruption, grand larceny, conspiracy and other crimes. An addendum of the names and charges of the 13 individuals is available here.
If convicted, many of the defendants could face prison sentences ranging from one to 25 years.
“This indictment is the culmination of a three-year-long investigation into a multi-faceted illegal operation that bilked millions of dollars from banks and department stores, and caused extreme damage to the credit scores of innumerable citizens,” said acting District Attorney John M. Ryan. “The defendants charged in this case ‘washed’ gift cards purchased with fraudulent credit cards to fill their pockets and bank accounts with millions of dollars — the bosses allegedly even did home improvements using these scrubbed gift cards. This criminal enterprise has been shut down and the defendants face prison time for their alleged greed at the expense of others.”
According to charges, in 2015 the NYPD began to investigate an illegal operation (a “fence”) based in Jamaica, Queens, that was originally located at 150th Street, and eventually moved to Liberty Avenue. The fence, which was allegedly run by Christopher and Bryan Nathoo, allegedly bought gift cards purchased with fraudulent credit cards.
Charges say that the Nathoo brothers allegedly used cash to buy gift cards that had been purchased using fraudulent credit cards and then re-sold those gift cards to Cardcash.com, an online gift card exchange business. However, the investigation allegedly found that the scheme was far more elaborate than this.
The illegal enterprise allegedly had specific roles for each individual involved, including Fence Manager, Swipers, Shoppers, Fence Employees, Money Launderer and more. Those who were swipers acquired stolen credit card numbers from the dark web and embossed the information onto blank cards. The swipers would then use these fake credit cards and go to stores such as Bloomingdale’s, Macy’s, Nordstrom’s and Target and buy legitimate store gift cards for varying sums. The swipers would then sell the legitimate gift cards to the fence.
Once the cards were in the fence, according to the indictment, gift cards would then allegedly go through a “washing” process where swipers or shoppers would go to department stores, buy merchandise and return the items for either a “cleaned” gift card or store credit, which would allegedly further removed from the fraudulently purchased gift card, making it less likely to be connected to the fraudulently purchased one and deactivated by the bank.
Charges say that Christopher and Bryan Nathoo allegedly recruited their wives, Hama Nathoo and Annarrisa Nathoo, respectively, to take on some of the shopping responsibilities. Hama Nathoo allegedly used the “cleaned” gift cards for personal purchases, including buying Home Depot gift cards and buying items to renovate the couple’s home, while Annarrisa Nathoo also allegedly used “cleaned” cards to make online purchases for herself and also used the gift cards to remodel the couple’s new home purchased in Suffolk County.
Many shoppers in the operation would allegedly repeatedly buy merchandise, return it for another gift card and repeat the process over and over again to get further and further away from the first fraudulently purchased gift card. The shoppers were allegedly paid $10 an hour or $100 for the day, and they would allegedly pay the swipers a percentage for each gift card.
The indictment states that one employee at Cardcash.com allegedly handled the Nathoo brothers business exclusively and bought the illegal enterprise’s gift cards, earning the website a profit of up to 20 percent of the value of the gift cards. At times, the employee allegedly met with the Nathoo brothers to deliver checks, which were then laundered through shell companies — that existed in name only — with the assistance of the manager of Uniondale Check Cashing in the Bronx. The Bronx check cashing establishment would collect a 2 percent take for each transaction with the manager pocketing 1 percent for himself.
Finally, the indictment says that in 2016 and 2017, the operation allegedly generated approximately $1 million in profits every single month as a result of this scheme. Profits allegedly dipped in 2018, however the operation still made money.
Police executed court-authorized searches on July 10, 2019, and allegedly recovered more than 8,000 gift cards from various retailers, as well as Visa, Mastercard and American Express gift cards.
“The NYPD and its law enforcement partners remain committed to targeting criminals who exploit victims’ personal information and profit through fraud,” said NYPD Commissioner James P. O’Neill. “I commend the NYPD detectives, Queens district attorney and New York State Department of Financial Services for their efforts and cooperation in this investigation involving enterprise corruption, grand larceny, and conspiracy. Together, we will continue to be relentless in fighting crime that impacts the people we serve wherever, and however, it occurs.”