Nationwide gift card scam linked to fentanyl and human trafficking, DHS says
By Ginger Allen, Kelsy Mittauer
NORTH TEXAS – Gift cards are bound to remain popular holiday presents, but anyone with them on their shopping list needs to be aware of a worldwide scam. The CBS News Texas I-Team found the latest fraud involving gift cards is on a global scale, and it includes Chinese gangs and hundreds of “mules” across the country.
“It’s more massive than most people understand,” said Capt. Jeff Roberts with the Texas Financial Crimes Intelligence Center, a statewide office that coordinates law enforcement investigations for organized financial crimes.
“The reality is, this is organized crime and at the high level, this is affecting every state in the continental U.S., and probably worldwide,” Roberts said.
Chinese-backed organized crime gift card fraud
Even federal law enforcement is involved. Last year, Homeland Security Investigations created the Project Red Hook, a collaborative effort that teams up law enforcement with big box stores to focus on Chinese-backed gift card fraud.
“We have seen heavy involvement of Chinese organized crime into this space,” said Adam Parks, the director of Project Red Hook. “I think they’ve seen this as an opportunity to get rich quick without a lot of consequences.”
According to the DHS’ website, the gift card fraud funds illicit gang activity like fentanyl production and smuggling, illegal immigration and human trafficking.
Maryland became the first state to pass a law against gift card draining. New York police have urged consumers to watch out for scammers tampering with barcodes on gift cards, while police in Pennsylvania issued a warning about the gift card scam in late 2023.
How the gift card scam works
Gangs hire people, known as “mules,” to shoplift gift cards en masse from popular retailers. The mules send them to a location where the scammers open the cards, copy the information and repackage them, then send them back to the mules who place them back in stores.
“We’ve seen videos … where there are literally factories or places where people are manufacturing and resealing to surgical precision,” Roberts said.
When consumers pay for the compromised gift cards, the scammers then have access to the money. By the time the intended recipient goes to redeem the gift card, the funds are gone.
Thousands of stolen gift cards worth millions of dollars
In Burleson, just south of Fort Worth, police arrested two men this summer in what their department called a “sophisticated multi-state gift card tampering ring.” The men are Chinese nationals who apparently entered the country illegally.
According to Det. Madison Marston, the men were caught leaving a Target store in Burleson with “packed pockets” full of shoplifted gift cards. During a traffic stop, officers found more than 1,000 cards inside the car.
Marston said the men were operating out of a hotel in Carrollton, just north of Dallas. When police searched the hotel room, they found another 4,000 cards with an estimated value of $1.7 million.
Investigators believe the men were shipping the cards to California, where they would be tampered with, resealed, and then put back on store shelves in DFW.
“You would never know which is a good gift card and which is a bad one,” said Marston.
Filling racks with adulterated gift cards
Police in Pantego, near Arlington, had a similar case last fall at a CVS pharmacy on Park Row. An employee called the police after watching a man take gift cards from his pockets and put them on the racks.
When officers arrested the man, they found him with a backpack full of gift cards. A search of his vehicle turned up boxes with several thousand more.
“He was actually a college student,” said Pantego Police Chief Robert Rife. “He just happened to get picked up for this job, making extra money, to put these gift cards on the shelves.”
The 25-year-old man was from California. Rife said he told officers he was traveling across the U.S. in a rental car, switching out gift cards at stores.
“I believe he was down on the bottom of the organization that was conducting this theft ring,” Rife said.
By filling the racks with dozens of adulterated cards, criminals increase the chances that customers won’t notice signs of tampering. That’s why authorities said shoppers need to carefully inspect every card before purchasing.
“The advice that I give is to treat gift cards like you do produce,” said Parks, the Project Red Hook director. “You don’t want to get the bruised apple, you want the best one. Red. Clean. Same with gift cards.”
He also suggested using the card immediately, or transferring the money to a digital wallet if possible.
According to Parks, Project Red Hook has led to more than 150 arrests nationwide since it was established last year.
How to spot gift card tampering
According to Project Red Hook, these are the following red flag indicators of gift card tampering:
- 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.
- 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.
- Product and brand logos, colors, or marks closely resemble, but do not match a company’s intellectual property.
- The personal identification number (PIN) cover has pieces missing, is fully missing, is not flat/smooth or contains wrinkles.
- 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.
- There may be no physical signs of tampering, but the balance does not match what you purchased.
Ohio trio arrested after allegedly stealing more than $600K from SNAP to buy candy and junk food — how this may be eating into your benefits
Courtesy of ABC 6 On Your Side
Updated Sep 11, 2025
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A trio in Columbus, Ohio, are awaiting their chance to enter a plea to fraud charges after allegedly bilking more than $600,000 from the Supplemental Nutrition Assistance Program (SNAP) benefit program.
It’s not yet known how the group’s scheme worked, but the sweet tooths have been collaborating since July 2024, using stolen SNAP benefit cards to buy thousands of dollars worth of candy, soda, Red Bull and other junk food.
Ionut Bizga, Doina Maria Bacelan, and Juan Carlos Pagan Hernandez are charged with several counts of criminal activities described as a “pattern of corrupt activity and food stamp fraud,” according to an Ohio Department of Public Safety spokesperson, in an interview with WHIO-TV.
The stolen goods were placed in Columbus storage units before being shipped out of state, according to Newsweek. Investigators seized card skimmers, cloned gift cards, credit cards, laptops and cell phones. They are also working to identify further suspects in the case.
While Ohio government officials are working hard to crack down on SNAP fraud, one question remains: Are professional scammers stealing your tax dollars from the program?
A year-long investigation
Bizga first became known to Columbus Police in July 2024 when they cited him for crashing into a city fire hydrant. He was rushed to the hospital, where it was learned that he had no identification. He had Texas plates on his minivan, and an additional set of plates for Virginia was found in the trunk. Bizga was found guilty of driving without a licence and fined $300.
One month later, the Ohio Investigative Unit investigated a tip about stolen SNAP benefits and fake electronic benefit transfer (EBT) transactions were received.
Bizga appeared in court again in May 2025, but the case was postponed until Bizga and Bacelan could be provided with a Romanian interpreter. Bizga is also subject to an Immigration and Customs Enforcement hold — meaning he was held for an additional 48 hours past his release — according to reports from his initial court appearance.
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How widespread is SNAP fraud?
The Ohio Department of Job and Family Services told ABC News 6 On Your Side that more than $17 million in SNAP benefits have been stolen in the state since summer 2023.
The most recent federal-level study of SNAP found that between 2015 and 2017, benefit trafficking amounted to approximately $1.27 billion in lost funds. The U.S. Government Accountability Office reported that $10.5 billion of the SNAP program’s overall $90.1 billion budget for 2023 was paid improperly, meaning that people received more benefits than they qualified for.
Theft of the program’s EBT cards is the biggest issue for regulators. Between 2023 and 2024, states were directed to use $150 million of federal tax dollars to reimburse SNAP recipients who were victims of skimming, card cloning and other types of fraud.
The situation has caught the attention of Tristan Rader, the representative of the 13th District in the Ohio House of Representatives.
“Tens of thousands of Ohio families have had their SNAP benefits stolen, leaving them without food and putting more pressure on food banks,” he wrote in a LinkedIn post. “I am working to stop this fraud and make sure help gets to those who need it — because no one should go hungry due to a broken system.”
Preventing SNAP fraud
The USDA is in the process of upgrading swipe cards with chipped ones to prevent EBT card theft.
In 2023, the Identity Theft Resource Center, a nonprofit organization dedicated to reducing fraud, found that SNAP benefits theft accounted for 11% of all government benefits fraud in identity theft cases.
Software company Propel surveyed 1,700 victims of EBT theft and found that half of the victims didn’t know their benefits were stolen. Additionally, 44% of those reported that they had to borrow money or go into debt to buy food after their benefits were gone.
In addition to upgrading to more secure EBT cards, the USDA has also released the [SNAP Fraud Framework] to establish best practices for detecting potential fraud. This framework will likely come under more scrutiny as charges were laid in a landmark fraud and bribery scheme involving a longtime USDA employee in May.
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