NH victims of this China-based multi-million-dollar gift card scam may be eligible for restitution

CONCORD, NH – Homeland Security Investigations, in conjunction with the U.S. Attorney’s Office for the District of New Hampshire, is seeking to identify potential victims of a sophisticated gift card fraud scheme for victim restitution purposes.

In December 2023, Homeland Security Investigations, the Internal Revenue Service’s Criminal Investigations, the U.S. Postal Inspection Service (USPIS), and the Concord, New Hampshire Police Department (CPD) began investigating a sophisticated gift card fraud scheme that is perpetuated by criminal organizations in China. This network has established a base of operations in New Hampshire due to the State’s tax-free retail environment and is responsible for millions of dollars in consumer losses.

Co-conspirators identified in this region work together in a highly coordinated fashion to purchase high-end electronics utilizing stolen gift cards.  These stolen gift cards are acquired though several fraudulent schemes, including elder-fraud, gift card tampering, and network intrusions. Once the electronics are purchased, they are re-packaged and shipped internationally where they are sold. Click here for more information on this general fraud scheme.

Potential fraud victims who had gift card funds stolen or used without authorization between October 1, 2023 and January 11, 2024, especially if the stolen funds originated from Apple, Walmart, Target, and BestBuy gift cards, are asked to provide the gift card number(s) and receipt or proof of purchase to HSINewEnglandVictimAssistance@ice.dhs.gov.

Please also include the victim’s name and contact phone number.  The victim’s gift card number will be run against a database of known gift cards stolen in this conspiracy.  If matched, the victim will be contacted for next steps in the restitution process.  This filing period will be open until June 30, 2025.

Project Red Hook

As described by Homeland Security, a prevention team known as Project Red Hook, has assembled to raise awareness of how Chinese organized crime groups are exploiting gift cards to launder money.

Gift card draining techniques not only affect retailers, but also our Nation’s economy and jeopardize our Nation’s national security and public safety. While gift card fraud is not committed by any one organization, Project Red Hook specifically targets Chinese organized crime groups due to the cross-border nature of the crime. This type of fraud erodes Americans’ confidence in our Nation’s economy and retailers, and funds the illicit activities of Chinese organized crime groups, such as:

• Fentanyl production and smuggling
• Illegal migration
• Human trafficking

Here are some red flag indicators that a gift card has been tampered:

1. Visibly evident tears in the zigzag cuts around the perimeter of the secure pack or visible paper fibers around the borders where a sharp knife may have cut through an edge.
   
2. Visibly evident tears or exposed nicks along the pull tab or a pull tab that has been compromised or cut with a knife and then laid back down. A slight bend back and forth can show if this has occurred.
   
3. Product and brand logos, colors, or marks closely resemble, but do not match a company’s intellectual property.
   
4. The personal identification number (PIN) cover has pieces missing, is fully missing, is not flat/smooth or contains wrinkles.
   
5. The product’s packaging or PIN covering deviates from the company’s standard gift card packaging. Compare the packaging and PIN to others on the shelf.
   
6. There may be no physical signs of tampering, but the balance does not match what you purchased.

If you suspect that a gift card you purchased may have been tampered with, contact the customer support number on the back of the gift card.