Oklahoma City man pleads guilty to gift card fraud
The Associated Press - November 6, 2017 10:20 am
OKLAHOMA CITY – Leonard Ray Foster, of Oklahoma City, has pled guilty to fraud and money laundering in connection with a scheme to defraud retailers of millions of dollars through gift cards, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to charges filed last week, Foster owned and operated Acquisitions Unlimited, LLC, also known as A-to-Z Giftcards. This business bought unused or partially used retail gift cards, also known as store value cards, for a fraction of the cards’ face value. With Foster’s personal involvement, the business then sold the value on the cards to Giftcard Zen, an online retail gift card exchange based in Phoenix, Arizona.
According to the charges, from May 2015 to March 2017, individuals affiliated with Foster or his business shoplifted large quantities of high-dollar items from retail stores, including Walmart, Lowe’s, Target, and Home Depot. They then returned these stolen items, without a receipt, to the retailer for a store value card in the amount of the returned merchandise. Each day, Foster purchased multiple cards from these individuals for a small fraction of the cards’ face values. He knew the cards had been obtained through fraud. Indeed, Foster sometimes directed the shoplifters himself. Through A-to-Z Giftcards, he then sold the face value on the cards to Giftcard Zen, in violation of terms of service that prohibited selling store value cards obtained through fraud.
Foster is charged in two separate counts. First, he is charged with wire fraud in connection with a particular wire during the scheme: a $59,035.38 transfer on December 9, 2015, from Giftcard Zen’s out-of-state bank to an account of Acquisitions Unlimited at Bank of America in Oklahoma. Second, he is charged with money laundering, based on a December 10, 2015, withdrawal from Bank of America in the amount of $18,000. The charges also include forfeiture allegations that seek a 1969 Ford Mustang, currency seized from accounts at First Fidelity Bank, and proceeds of the offenses generally.
Today Foster pled guilty to both wire fraud and money laundering. In a plea agreement, he has acknowledged that the losses associated with his scheme are between $3.5 million and $9.5 million. At sentencing, he could receive up to 20 years in prison and 3 years of supervised release on Count 1. On Count 2, he could receive up to 10 years in prison, followed by 3 years of supervised release. He will also be subject to mandatory restitution in an amount to be determined by the court and fines of up to $250,000 per count.
This case is the result of an investigation by the Internal Revenue Service–Criminal Investigations, the United States Postal Inspection Service, and the Oklahoma City Police Department. It is being prosecuted by Assistant U.S. Attorneys Julia E. Barry, Ashley L. Altshuler, and Wilson McGarry.