Texas Authorities Bust $14 Million Gift Card Cloning Operation

Three Latvian Nationals Arrested in Massive Fraud Scheme

Texas investigators have dismantled a sophisticated gift card fraud operation that drained an estimated $14 million from unsuspecting shoppers across the state. The Texas Financial Crimes Intelligence Center arrested three men accused of operating a gift card fraud operation that authorities estimate caused about $14 million in losses , marking one of the largest gift card fraud busts in recent memory.

The men are foreign nationals from Latvia - Kristians Petrovskis, Romualds Cubrevics and Normunds Ulevicus are suspected of gift card cloning . "These people were all here illegally, and they were all specifically here to commit crimes," said Adam Colby, director of the FCIC . Investigators say the men had more than 400 gift cards in their possession at the time of their arrests .

The suspects told investigators they typically stole 10 gift cards a day, every day, since May 2025 , operating with methodical precision across multiple regions. Authorities linked the suspects to recent cases in the Dallas-Fort Worth area, Central Texas and along the Gulf Coast .

How the Gift Card Cloning Scheme Worked

The operation relied on a deceptively simple but effective method known as gift card cloning. The scheme involves the theft of unactivated gift cards from retail store kiosks, opening the gift card packaging, copying the electronic number off the card, then re-sealing the gift card packaging and returning it to the kiosk at the store .

The thieves would then take the items to another location and carefully remove the packaging almost surgically. "The card is removed, and then the material on the back that covers up the numbers to transfer anything or activate the card is then removed so that they can see it," said Colby . This surgical precision allowed them to reseal packages so expertly that customers couldn't detect the tampering.

When a customer purchases a card and loads funds onto it, the thief can check the card's balance and drain the card of funds before the customer can use it . The victims often discovered the theft only when they tried to use their gift cards, finding empty balances despite having paid full value.

Legal Consequences and New Enforcement

All three suspects were charged with fraudulent possession of gift cards, a first-degree felony . Two are being held in the Dallas County Jail, while one remains in custody in Garland . The timing of these arrests proves significant, as the arrests come just weeks after Texas Penal Code 32.56, a new law aimed at cracking down on gift card tampering, took effect on September 1, 2025 .

Agencies assisting in the investigation included the Garland Police Department, Dallas Police Department teams, the Texas Department of Public Safety and U.S. Customs and Border Protection . This coordinated effort demonstrates how seriously Texas authorities are taking gift card fraud, which has become increasingly prevalent during the holiday shopping season.

Protecting Yourself from Gift Card Fraud

Consumer awareness remains the best defense against these sophisticated schemes. To avoid being caught up in the scam, customers are urged to closely examine gift card packaging for any excess glue or damage to the packaging . Colby recommends consumers inspect gift card packaging and check for signs of tampering before purchasing .

However, detection can be challenging even for vigilant shoppers. "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. "Beyond that, there really isn't that much you can do other than to be vigilant" .

This case highlights how gift card fraud has evolved beyond simple online scams into organized criminal enterprises. As Texas strengthens its laws and enforcement capabilities, consumers and retailers must remain alert to protect against increasingly sophisticated theft operations that can drain millions before anyone notices.