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Police arrest first Heartland suspects

$100K gift card scam unpicked

Internet Security Threat Report 2014

Three Florida-based men have been charged with credit card fraud following the first arrests connected with the hacking attack against payment processor Heartland Payment Systems.

The trio - Tony Acreus, Jeremy Frazier, both 20, and Timothy John, 21 - are accused of using stolen card details to "electronically encode Visa Gift Cards". These vouchers were allegedly used to buy goods, subsequent ally sold for cash, at local Wal-Mart stores and elsewhere around Tallahassee.

Police estimate the scam involved more than $100,000 in fraudulent transactions. Each man is charged with credit card fraud and grand theft.

Arrests of the three suspects followed a three month investigation involving Leon County, Florida Sheriff's office, the Tallahassee Police Department and the US Secret Service, a statement (pdf) explains:

Acreus, Frazier and Johns have been using stolen credit card numbers to electronically encode VISA Gift Cards which were then used to make fraudulent purchases at local businesses, including several Tallahassee Wal-Marts. The group would then sell the fraudulently obtained merchandise for cash. The stolen credit card numbers utilized by the group were stolen in an international computer hijacking of records from the Heartland Processing Center in New Jersey.

The total actual and declined fraudulent transaction in Leon County is currently in excess of $100,000. This amount is expected to be much higher as this investigation continues.

Further arrests may follow as the investigation continues. The three suspects are likely to be leaned on heavily for information on how they obtained the allegedly stolen card details.

BankInfoSecurity.com, which broke the story of the arrests, reckons the number of banks affected by the Heartland breach stands at more than 220. Heartland admitted in January that a malware-related security breach in its processing systems last year which resulted in the disclosure of an unspecified number of customer records.

The firm hasn't said how many records were exposed.

But since Heartland handles 100m transactions a month on behalf of 250,000 merchants, and considering the nature of the breach, the number of exposed records is likely to be huge and might even rival that of the infamous TJX breach. ®

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