Natalie Frank, Ph.D.
A 52-year-old Chicago man, Guangguo Zhu, has been arrested in connection with a large-scale, multi-state gift card scam that targeted retailers across several states. The scheme, which involved compromised gift cards, was uncovered after local authorities in Wisconsin responded to a tip from a Walgreens store manager in Grafton.
Zhu, who was seen returning gift cards to the display rack in an unusual manner, had been spotted engaging in suspicious activity at multiple Walgreens locations. When police located him at another store, they discovered duffle bags containing 1,807 gift cards, which authorities believe were part of a wider criminal network.
The scam works by obtaining or stealing gift cards, recording their numbers and PINs, and then returning them to store racks for unsuspecting customers to purchase. Once activated, fraudsters use the dark web or bots to transfer the funds, effectively laundering the stolen money.
Zhu, who is believed to be a lower-level member of the operation, now faces multiple charges, including forgery and identity theft. He is currently being held in Ozaukee County with a bond set at $250,000 as the investigation continues.
Authorities are warning the public to be cautious when purchasing gift cards, especially if the packaging shows signs of tampering or if barcodes appear to be altered.