CHARLOTTE, N.C. – Seven people are facing prison sentences after they were accused of using stolen credit card numbers and counterfeit gift cards to buy more than $1 million in cigarettes in North Carolina, federal prosecutors said.
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The defendants then sold those cigarettes on the black market, completing a scheme that began with stolen credit information they obtained from overseas hackers.
Federal prosecutors said the group encoded the credit card information onto gift cards, which they took to Walmart stores and bought genuine Walmart gift cards. The genuine gift cards were then taken to Sam's Club stores to buy the cigarettes, which were then sold to a vendor, according to prosecutors.
U.S. Attorney John Stuart Bruce said in a statement that the seven received sentences on Wednesday ranging from about three years to 12 years after pleading guilty to conspiracy to commit money laundering and aggravated identity theft. Four of the seven are from Raleigh, and the other three are from Charlotte, Durham and New York.
Tendai Munyaradzi Makoni, 34, of Durham received the harshest sentence of the seven when he was given a 12-year prison term. An eighth person was convicted at trial last September and was sentenced to 30 months in prison.
The seven were forced to forfeit 117 items, ranging from gift cards and debit cards to iPhones, video game systems and computers.
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"This group sounds very well-organized. You don't see this every day," said Avivah Litan, an analyst for Gartner, Inc., a Connecticut-based technology research firm. "It certainly is very sophisticated. They knew exactly what they were doing."
Litan said Thursday that the criminal infrastructure is getting bigger and better at what it does. She attributes that to the techniques used to steal data without getting caught. She also said the "black web" supplies its own search engines to allow criminals to find what they need to engage in their activities.
"It's a big bazaar now," she said. "Anyone can buy anything they want."
Noting that technology is moving at a rapid pace, Litan said the same is happening with the cyber-criminal "and the good guys aren't really organized to fight it."
To mount a challenge, Litan said there's needs to be a single agency dedicated to fighting cyber-crime.
"We're too fragmented," she said. "It's like everyone is on their own. There's no coordination."
She suggests state-of-the-art technology, information-sharing processes and a focused law enforcement agency to deal with the problem before it happens instead of after it occurs.
"There's pockets of hope, but you need leadership to make this happen at the national level and that's what we don't have," she said.