Last week, authorities in New York indicted more than 100 people suspected of being part of a crime ring that used forged credit cards to buy and resell an estimated $13 million worth of Apple products and other electronics overseas. In this post, I offer readers a behind-the-scenes look at a somewhat smaller but similar organized crime operation that uses stolen credit card numbers to purchase and launder high-end electronics.
One of the simplest ways to extract cash from stolen credit card accounts is to buy pricey consumer goods online and resell them on the black market. Most online retailers grew wise to these scams years ago and stopped shipping to regions of the world most frequently associated with credit card fraud, including Eastern Europe, North Africa, and Russia. But these restrictions have created a burgeoning underground market for reshipping scams, which rely on willing or unwitting residents in the United States and Europe to receive and relay high-dollar stolen goods to crooks living in the embargoed areas.
There are dozens of businesses in the criminal underground engaged in merchandise laundering, known as “Drops for stuff” on cybercrime forums. The “drops” are people who have responded to work-at-home package reshipping jobs advertised on craigslist.com and job search sites. Most reshipping scams promise employees a monthly salary and cash bonuses. But the crooks almost always sever communications with drops just before the first payday, usually about a month after the drop ships their first package.
A typical drop will receive and reship between two and four packages per day. The packages arrive with prepaid shipping labels that are paid for with stolen credit card numbers, or with hijacked online accounts at FedEx and the US Postal Service. Drops are responsible for inspecting and verifying the contents of shipments, attaching the correct shipping label to each package, and sending them off via the appropriate shipping company.
One drops operation, dropforrent.net, allows “clients” to “rent” drops who have signed up for reshipping jobs. “Managers,” those who facilitate drop recruitment scams, can earn money by purchasing merchandise that the reshipping operation can quickly resell. Most reshipping operations seek consumer electronics that can be easily sold for cash, including laptop computers, cameras, smart phones and parts for sports cars. Dropforrent.com pays managers and clients 30 percent of the value of laptops from ACER, HP, Toshiba, Dell, Compaq and Samsung, for example, and more than 40 percent of the retail price for Apple, Sony, VAIO, Canon and Nikon products.
Drops also can be used to reship virtually anything else that the client or manager would like to use or consume themselves, such as clothes, jewelry, and candy. For this service, clients and managers pay a flat rate of 50 percent of the value of the goods to have the items reshipped abroad.
The dropforrent.com managers recruit new hires by posing as legitimate businesses. One manager who uses the name Dick Martin operates a dummy business called applestore-direct.com, and actively recruits drops via ads on craigslist.com. Recruited drops are given a login to applestore-direct.com where they receive daily updates about pending shipments. Drops also are required to use this Web-based interface to notify their managers of received and reshipped items.
Kent Tribbett, a 24-year-old from West Berlin, New Jersey, has been reshipping for applestore-direct.com for almost three weeks. He was hired by Martin via an ad on craigslist.com and was given an account at applestore-direct, where he was instructed to log in daily to receive and transmit information about packages arriving at his home. A screen shot of his user account is below.
According to Dick Martin’s account at dropforrent, at least 10 clients were using Tribbett as a drop. Those same records show that Tribbett was one of 60 different drops recruited by Martin in the past 10 months.
I spoke with Tribbett briefly by phone; he denied receiving or reshipping packages for applestore-direct.com, and then hung up. But the numerous USPS tracking numbers and Express Mail bills attached to the past shipments in his account at the site suggest otherwise.