NEW YORK -- In a fraud bust that federal officials described as the largest ever of its kind, 56 men were charged Wednesday with bilking credit card companies out of $8.5 million.
Using a storefront in Queens, the ring allegedly set up bogus businesses to obtain credit card processing machines, then faked customer purchases to ring up millions in credit payouts.
So-called "customers" willingly provided their credit cards, as well as details about their identities and credit histories, in exchange for a cut of the profits, federal officials said. Middlemen in the scheme collected the largest commissions, usually 75 percent to 90 percent of the transactions, according to officials.
"Everybody makes money except the banks," said FBI spokesman Jim Margolin.
Early Wednesday morning, more than 200 FBI agents fanned out through parts of Brooklyn, Queens and elsewhere to execute arrest warrants in the case; of the 56 suspects, 22 were apprehended. However, many of the others had fled to Egypt.
Officials said losses from credit card fraud, which total an estimated $2 billion nationwide every year, are passed on to the public in the form of higher interest rates and fees.
If convicted, the defendants each face up to 7 1/2 years in prison, a $250,000 fine and repayment to the defrauded credit card companies.
Distributed by the Los Angeles Times-Washington Post News Service
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