John Marshall Mantel for The New York Times
By NOAH ROSENBERG November 18, 2011 The New York Times
The customers went for the dry-aged sirloin and tender cuts of filet mignon, like many at New York City’s better steakhouses. And, like many, they handed their credit cards to the waiters after their meals, expecting to tip, sign and be on their way.
Eric Brahms, one of those indicted, in State Supreme Court in Manhattan on Friday. According to the police commissioner, members of the ring used counterfeit cards to make purchases at stores like Bergdorf Goodman, Burberry and Chanel.
The diners had unwittingly become pawns in a “very high-tech, evolving group of criminal organizers,” Cyrus R. Vance Jr., the Manhattan district attorney, said Friday during a news conference to announce the indictments of 28 people.
Seven waiters, he said, used lipstick-size electronic “skimmers” to extract data from the magnetic strips of American Express Centurion, or “black,” cards and other high- and no-limit credit cards belonging to patrons. Such customers, used to high credit card bills, would probably not have immediately noticed or been alerted by card companies to any suspicious activity on their accounts, Mr. Vance said.
Equipped with the stolen data, members of the ring allegedly manufactured counterfeit credit cards and identification cards in an Upper West Side apartment using what Mr. Vance called “the tools of their trade”: computers, scanners, encoders, embossing machines and other high-tech equipment.
The counterfeit cards, which the police commissioner, Raymond W. Kelly, described as high-quality duplicates, were used by “shoppers” associated with the ring to make purchases at high-end retailers like Bergdorf Goodman, Burberry and Chanel, in places as far away as Boston, Chicago and Florida. But first, to make sure the cards would be accepted, members of the ring used them for things like cab rides.
Mr. Kelly — standing behind a display that included thick stacks of $100 bills, designer handbags and aged bottles of red wine seized from the defendants — called the ring “well organized and very selective.”
On Thursday, the authorities seized more than $1.2 million in cash and more than $1 million worth of goods, including 35 cases of wine, from a storage unit in Manhattan and from the Upper West Side apartment.
Mr. Vance said the criminal enterprise, whose members were charged with enterprise corruption, conspiracy and grand larceny, among other counts, extended beyond restaurant workers in Manhattan to those at a Morton’s steakhouse in Stamford, Conn., and the Bicycle Club in Englewood Cliffs, N.J. He said the man he called the leader of the ring, Luis Damian Jacas, 41, of Manhattan, was “one organized, intelligent operator.”
A special agent with the Secret Service, which was also involved in the 18-month investigation, said the kind of skimming devices the ring used could be purchased on the Internet.
Mr. Vance said identity theft was “one of the fastest growing crimes in Manhattan.” In fact, Jonathan Mintz, the commissioner of the city’s Department of Consumer Affairs, told reporters at the news conference announcing the indictments that he himself had twice been a victim of identity theft.
Mr. Mintz said handheld credit-card-swiping mechanisms used at a diner’s table could help lessen the chances of identity theft while assuring diners that their sensitive personal information would not be compromised.
But in the end, “the victim in this case, really, is American Express,” Mr. Vance said, noting that cardholders are typically reimbursed for any fraudulent charges, albeit in a potentially long process with a “cascade of consequences.”
Of the 28 people listed on two separate criminal indictments, 22 were arraigned on Friday in State Supreme Court in Manhattan, where they pleaded not guilty. Two others were expected to be arraigned in the coming days, and four additional people were still at large on Friday.
Mr. Kelly said that one of those yet to be apprehended, Gregory Portacio, had a criminal record that dated back about 30 years, when he was arrested for trying to steal a gold necklace from a pedestrian. He had latched onto the necklace and, from a moving car, dragged the woman to her death, Mr. Kelly said.