BUDA, Texas – Three people were arrested and thousands of gift cards were recovered after authorities dismantled a multi-county gift card tampering operation.
Timeline:
The investigation started with a report of suspicious activity by a retailer in March. A store employee had seen a man loitering near the gift card display, which later was discovered to have 15 altered cards.
Investigators were about to identify a rental vehicle associated with the suspects and tracked them between Houston and Austin.
TDLR says that the suspects had entered the US with Taiwanese passports, rented a vehicle in Austin, and established a base of operations in Houston. Over five days, they were seen visiting more than 20 retail locations per day.
The suspects allegedly used a calculated four-step process:
Theft: Suspects remove large quantities of gift cards from retail displays at stores, including Walgreens, CVS, and Dollar TreeCompromise: Suspects then peel back security scratch protectors to record activation codes and serial numbers and then repackage the cards to appear intactReturn: The tampered cards are returned to store shelvesDraining Funds: Consumer purchases and activates the card at the register, prompting the suspects to drain the funds electronically, leaving the victim with a zero balance
On March 30, Houjie Lin and Yi-Hsun Wu were taken into custody at a Buda store where they were allegedly tampering with gift cards.
On April 1, Hsai Lin was arrested during a search warrant execution at an Austin hotel room. She had allegedly been processing and dismantling stolen cards.
On April 10, investigators learned of a home in the Sharpstown area of Houston believed to be the primary base for the ring.
Hsai Lin (Texas Department of Licensing and Regulation)
The trio each face charges of first-degree felony enhanced engaging in organized criminal activity, with a predicate offense of fraudulent use, possession, or tampering with gift card data.
Under Texas law, these enhanced charges carry a minimum sentence of 15 years in prison.
By the numbers:
Investigators were able to recover 11,563 gift cards in total.
The potential value of the recovered cards means authorities prevented about $5.6 million in financial losses, says the Texas Department of Licensing and Regulation.
80 tampered gift cards, two Taiwanese passports and a glove box of rubber bands were recovered during a vehicle search in Buda when Lin and Wu were arrested.
More than 3,000 cards were recovered from the Austin hotel room.
Another 277 bundles of cards were found hidden in a closet at the Houston home.
(Texas Department of Licensing and Regulation)
The Source: Information in this report comes from the Texas Department of Licensing and Regulation