Latvian Nationals Arrested for Sophisticated $14 Million Gift Card Cloning Scheme

Multi-State Crime Spree Exposed

Three European men were arrested for their involvement in a high-tech and extensive criminal enterprise. The suspects are accused of committing crimes in several cities across the United States before eventually being arrested in Texas. Kristians Petroviskis, Romunds Cubrevics, and Nurmunds Ulevicus were arrested by the Texas Financial Crimes Intelligence Center (FCIC). The men are foreign nationals from Latvia.

Investigators estimate the suspects committed approximately $14 million in fraud. The suspects told investigators they typically stole gift cards from about 10 stores each day, seven days a week, and had been doing so since May. More than 400 gift cards were found in the suspects' possession at the time of their arrest.

The group is accused of targeting stores in several cities, including Austin, Dallas-Fort Worth, Houston, and San Antonio. "These people were all here illegally, and they were all specifically here to commit crimes," said Adam Colby, director of the FCIC.

The Sophisticated Cloning Operation

Scammers go to stores or kiosks and steal empty gift cards. They open them carefully, obtain the card number and activation code, then carefully seal and cover up any tampering before returning the cards to the store. The info from the cards is keyed into a computer running a program that keeps watch until someone buys one of the tampered-with cards and loads it up with money. The thieves then instantly transfer the money on the card to themselves, leaving the purchaser with a worthless piece of plastic.

Victims' cards are sometimes drained before they return to their cars at the location where they made the purchase, Colby said. Chinese criminal groups had been the leaders in gift-card scams, Colby said, but criminals sometimes share information, and Eastern Europeans have taken up the scam.

The men are charged with fraudulent possession of gift cards, a first-degree felony. Kristians Petroviskis, Romunds Cubrevics and Nurmunds Ulevicus were charged with fraudulent possession of gift cards after Texas enacted a law to crack down on gift card tampering, which went into effect in September.

Consumer Protection and Prevention

Colby recommends consumers inspect gift card packaging and check for signs of tampering before purchasing. "The only way once you purchase it is to actually check to see what the balance is on that card, but unfortunately, most people are going to give it as a gift, and they don't want to scratch it off to see what's on there," said Colby.

Shoppers should also buy gift cards with a credit card as they can dispute the charge and may get their money back, according to an article from the FTC. It is also important to keep copies of the gift card and receipt from the store where it was purchased, so if you do get a compromised gift card, you can report the fraud to the gift card company and the FTC.

Legal Consequences and Broader Implications

Two of the men are being held in the Dallas County Jail while the third remains in jail in Garland. They also have holds placed on being released on bond on suspicion of being in the country illegally, according to jail records.

This scam is more "newish" and has become widespread enough in the past few years that the Texas Legislature this year enacted a law more clearly defining gift card fraud and upping the penalties. The case highlights how sophisticated criminal networks are exploiting vulnerabilities in retail gift card systems, targeting everyday consumers during peak shopping seasons when gift card purchases surge.

This arrest represents a significant victory in combating organized retail crime, but experts warn that similar operations likely continue operating across the country. The international nature of the scheme underscores the need for enhanced cooperation between state and federal law enforcement agencies to protect consumers from increasingly sophisticated fraud operations.