American Card Express Gift Purchase
Wed, 10 Feb 2010 13:07:36 +0000
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Jerry A. Diggs, 31, of Middletown, Delaware, was sentenced Wednesday to 132 months for conspiracy to commit wire fraud, 24 months for identity theft, and required to pay $230,644.56 in restitution to more than one hundred victims. Neil H. MacBride, Acting United States Attorney for the Eastern District of Virginia, made the announcement after Diggs' sentencing before United States District Judge Raymond A. Jackson. Diggs pleaded guilty on September 16, 2009 to one count of conspiracy to commit wire fraud and one count of aggravated identity theft.
Investigators say Diggs and others would purchase and/or steal gift cards, then re- encode them with credit account numbers belonging to actual American Express card holders. Approximately sixty-seven credit card accounts of other individuals were compromised.
Investigators say Diggs and others would purchase goods and services with the re-encoded gift cards. The re-encoded gift cards appeared normal and legitimate to merchants. Investigators say Diggs and others used re-encoded gift cards to make various purchases at the Great Wolfe Lodge, in Williamsburg, Virginia. Investigators say Diggs sold some of the purchased goods on eBay .
American Express says the re-encoding scheme was responsible for $217,842.79 in fraudulent charges and an additional $356,627.57 in attempted or declined charges between September, 2007 and October, 2008.
York County police arrested Diggs on December 30, 2007. Officers say Diggs and co-defendant, Freddy G. Herreida, had eleven re-encoded American Express gift cards on them.
Newport News police arrested Diggs on October 14, 2008, after he tried to purchase $300.00 worth of gift cards at a local restaurant with a re-encoded American Express gift card. Police say they searched his vehicle and uncovered three American Express gift cards and fifteen Visa gift cards. American Express and Visa said the gift cards had been fraudulently re- encoded with true customer information.
Diggs was indicted on federal charges in December 2008. A Newport News police officer attempted to arrest Diggs on December 24, 2008 as he got in the passenger side of a vehicle. Police say Diggs fought with the officer and told the driver of the vehicle to drive away with the officer caught in the doorframe. The officer was dragged along the street and injured. Diggs was arrested on December 25, 2008, after fleeing to Delaware.
The United States Secret Service and the Newport News Police Department investigated the case. Assistant United States Attorney Brian J. Samuels prosecuted the case on behalf of the United States.
