OZAUKEE COUNTY, WI (WTAQ-WLUK) — A Chicago man is accused in a “large scale gift card scam” that police believe spanned several states and likely hit several cities in Northeast Wisconsin.
Guangguo Zhu, 52, is charged with three counts of uttering a forgery, three counts of unauthorized use of an entity’s identifying information or documents and one count of financial transaction card – forgery.
According to the criminal complaint, the case against Zhu began Thursday in Grafton, when law enforcement was dispatched to a Walgreens store for a fraud complaint. The store manager said a middle-aged Asian man “came into the store and placed several forged/altered gift cards onto the gift card rack.”
The manager stated due to widespread fraud and scams involving gift cards, Walgreens did a reset of the gift cards issued for sale. The manager showed Officer Brandt the backs of the valid gift cards, which were different than the backs of the cards the defendant put on the rack. The cards put on the rack by the defendant were no longer in circulation or sold by Walgreens.
When a Walgreens in Cedarburg reported Zhu was at their store, police conducted a traffic stop and Zhu was arrested. Officers searched his car “and recovered the gift cards in the driver’s side door, various identification cards with the defendant’s name on it, and two duffle bags filled with gift cards.”
Surveillance footage from the Grafton Walgreens showed Zhu pull into the parking lot, enter the store, place the gift cards onto one of the racks and then leave the store.
Cedarburg officers found similar, out of circulation, gift cards on the rack at the Cedarburg Walgreens.
In total, Zhu had 1,807 gift cards in his possession. The cards ranged from values of $10 to $500 and were branded as being from the following outlets:
Visa
Nike
Apple
Razor
Macy’s
Sephora
Nordstrom
Xbox
Dicks
eBay
Amazon
Bath and Body Works
Home Depot
The criminal complaint explains the scam as follows:
“Grafton Police Detective Justin Gehm is aware of a common gift card scam in which nefarious parties are able to obtain gift cards, either via theft or inside sources. The packaging for the gift cards is meticulously cut open and the gift card is removed. The parties then remove the “scratch off” coating to reveal the gift cards identification numbers. Once the numbers are documented, the identification number is covered back up and the gift card is reinserted into the packaging. Finally, the packaging is sealed. Once prepared and ready, the cards or re-stocked onto gift card racks, waiting for customers to purchase the gift cards.”
“When the cards are purchased, they are either loaded with the set amount of funds or the customer can choose how much money, within the range, to load the card with. The scammers are then able to obtain the funds loaded onto the card for their own benefit. The party receiving the gift card will learn their card has no funds on it, when they ultimately try to use the gift card.”
At the time of the complaint, officials said approximately 60 of the recovered gift cards have been opened; officers confirmed the packaging has been tampered with and the “scratch off” coating on the identification numbers has been removed.
In the past 30 days, Zhu’s vehicle was located in Green Bay, Appleton, Oshkosh and Sheboygan, in addition to Chicagoland and two locations in Indiana (Indianapolis and South Bend).
Authorities say Zhu is a Chinese citizen.
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