VA: Gift Card Re-encoder sentenced to 13 years

Jerry A. Diggs, 31, of Middletown, Delaware, was sentenced Wednesday to 132 months on a charge of conspiracy to commit wire fraud, a consecutive 24 months on a charge of aggravated identity theft, followed by three years of supervised release and the requirement of restitution in the amount of $230,644.56 to over 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 pled guilty on September 16, 2009 to one count of conspiracy to commit wire fraud and one count of aggravated identity theft. The plea resulted from the defendant’s participation in a large scale gift card re-encoding scheme. The investigation revealed that the defendant and other conspirators would purchase and/or steal gift cards issued by a number of vendors, including American Express, Visa, and other merchants. The conspirators would re-encode the gift cards with the credit account numbers belonging to actual credit card accounts of American Express card holders. In the course of doing so, approximately sixty-seven credit card accounts of other individuals were compromised. The defendant and other conspirators would travel within Virginia, Maryland, Delaware and other states, and purchase goods and services with the re-encoded gift cards. The re-encoded gift cards appeared normal and legitimate to merchants. The use of the re-encoded gift cards resulted in charges accruing to the accounts of the legitimate individual credit card holders.

After the defendant was indicted on federal charges in December 2008, he was observed in Newport News, Virginia, on December 24, 2008. A Newport News police officer attempted to arrest the defendant when the defendant was entering the passenger side of a vehicle. The defendant fought with the officer and instructed the driver of the vehicle to drive away with the officer caught in the doorframe of the vehicle. The officer was dragged along the street and sustained injuries. The defendant was arrested on December 25, 2008, after fleeing to Delaware.

This case was investigated by the United States Secret Service and the Newport News Police Department. Assistant United States Attorney Brian J. Samuels prosecuted the case on behalf of the United States.

Source: U.S. Attorney’s Office, Eastern District of Virginia

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