Last month, a group of five members of the US National Guard was arrested for allegedly using Bitcoin to purchase stolen credit card numbers. They later used these credit card numbers to make several fraudulent purchases from many military bases. The Department of Justice said that three guards were arrested after being indicted last month.
The Bitcoin Scam
A group of five US National Guard members was arrested and charged with having used Bitcoin to purchase stolen credit card numbers, which they used to make many fraudulent purchases from different military bases. Three guards by names Quentin Stewart, James Stewart, and Derrick Shelton were indicted and arrested last month.
The accused bought the stolen debit/credit cards on the web by paying in Bitcoin, a form of digital currency. Bitcoin, also known as a cryptocurrency, is generated and managed using a software program that operates in a decentralized fashion.
The stolen debit and credit card numbers that were purchased online using Bitcoin belonged to both businesses and individuals having accounts in federal credit unions and with billing addresses in and around Maryland.
Subsequently, they made purchases of strip-card coding tools and reprogrammed the cards they had with the stolen numbers. Soon afterward, they made purchases such as PlayStation and Xbox video game consoles, gift cards, consumer electronics items, luxury goods, etc. They made the purchases at Air Force and Army Service Exchange outlets in Maryland, Virginia, and South Carolina. This is a chain of retail stores that operates in many of the military bases in the United States. They used the goods themselves or sold it to others.
Jamal Moody, another US National Guard member, was, however, charged with a different but similar case, including buying stolen credit card using Bitcoin. He used these credit cards to buy off about $2,196 worth products many of which were from AAFEES stores. According to the release from the US Attorney Office (Maryland), the accused and arrested US National Guards conspired during the period July ’14 to May ’15 and carried out the crimes.
Whereas Jamal is awaiting a sentence after he pleaded guilty in the month of January, Grant, James, and Shelton were discharged (under pretrial supervision) after the initial set of hearings. Quentin remains in custody. Vincent Grant was accused separately, and the charges that he faces include identity theft and device fraud. He can get up to 7.5 years in prison if proved guilty.
The five members of the US National Guard have been charged with various counts including identity theft, wire fraud, conspiracy to commit fraud through access device and credit card fraud. If proven guilty of the Bitcoin scam, each of the three guardsmen can face up to 20 years in prison.
All of the five guards who were involved in the Bitcoin scam are based in Washington, DC and Maryland.