Federal Credit Card Fraud

Federal Credit Card Fraud

Federal agents arrested you for credit card fraud, access device fraud, or trafficking in stolen credit card information. You’re charged with violations of 18 U.S.C. § 1029, which criminalizes fraud involving credit cards, debit cards, account numbers, or other “access devices” used to obtain money, goods, or services. Federal credit card fraud covers using stolen card numbers, possessing stolen card information, trafficking in stolen cards or account numbers, possessing card-making equipment, and using unauthorized access devices to conduct transactions. Simple possession of 15 or more stolen or fake cards or account numbers within any twelve-month period triggers federal jurisdiction. Credit card fraud carries ten years maximum for basic offenses, fifteen years if the fraud constitutes identity theft, twenty years if violations occur during a felony or the defendant has prior fraud convictions. Restitution for victim losses is mandatory.

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek, who has defended credit card fraud cases for many, many years. We’ve represented clients charged with using stolen card numbers, possessing databases of stolen account information, accused of running carding websites that sold stolen card data. Federal credit card fraud prosecutions target individuals using stolen cards, sophisticated trafficking operations, and hackers who steal payment card data from businesses. Understanding what conduct triggers federal charges and what intent prosecutors must prove determines whether your activity was criminal fraud or legitimate conduct.

Federal Credit Card Fraud Offenses

Using unauthorized access devices under 18 U.S.C. § 1029(a)(2) criminalizes knowingly using credit cards, account numbers, or other access devices without authorization or with intent to defraud. This includes using stolen card numbers to make online purchases, using fake cards with stolen magnetic stripe data, or using someone else’s card without permission. Trafficking in unauthorized access devices under § 1029(a)(3) criminalizes possessing 15 or more stolen or fake cards or account numbers within twelve months. This targets individuals possessing databases of stolen cards, selling stolen card information, or operating websites trafficking in compromised payment data.

Possessing device-making equipment under § 1029(a)(4) criminalizes owning card readers, writers, embossing equipment, or software designed to create counterfeit cards or encode stolen data onto blank cards. Possessing this equipment with intent to commit fraud is criminal even if you haven’t yet produced fake cards. Producing unauthorized access devices under § 1029(a)(1) criminalizes creating fake cards, encoding magnetic stripes, or generating account numbers. Soliciting or selling unauthorized access devices covers operating carding forums, selling stolen card data, or advertising services to supply compromised payment information.

How Federal Agents Investigate Credit Card Fraud

Secret Service and FBI investigate credit card fraud through monitoring of carding websites and dark web markets selling stolen card data. Undercover agents make purchases of stolen cards to identify traffickers. Banks and payment processors report fraud patterns and share data about compromised cards. Merchants report suspicious transactions or customers using multiple cards. International cooperation with foreign law enforcement targets overseas carding operations affecting U.S. victims. Data breaches that compromise millions of payment cards trigger major investigations to identify hackers and those who purchase and use stolen data.

Prosecutors trace suspicious transactions to identify users of stolen cards. Financial records showing deposits from unauthorized charges prove fraud. Digital evidence from computers and phones reveals databases of stolen card information, communications with co-conspirators on carding forums, or evidence of trafficking in compromised payment data. Cooperating witnesses who participated in trafficking operations testify about schemes. Forensic analysis of seized equipment reveals card-making operations or evidence of card testing to verify stolen numbers work before selling them.

What Constitutes Access Device Fraud

Access device means credit cards, debit cards, account numbers, PINs, security codes, or any device or code that can be used to obtain money, goods, or services. Authorization means permission from the cardholder or issuing bank to use the device. Using a card or account number without the cardholder’s permission is unauthorized use even if the card hasn’t been reported stolen yet. Using your own card for purchases you intend not to pay for is fraud – authorization requires intent to pay, not just physical possession of the card.

Knowingly and with intent to defraud means you knew the access device was unauthorized and you intended to obtain something of value through fraud. Accidentally using someone else’s card that looks like yours isn’t fraud. But trying one card after another until one is accepted shows knowledge of unauthorized status. Using stolen cards to buy items you later return for cash or gift cards shows intent to defraud. Testing stolen card numbers to verify they work constitutes attempted fraud.

Penalties for Credit Card Fraud

Credit card fraud under 18 U.S.C. § 1029 carries ten years maximum for basic violations. Fifteen years if the fraud is in connection with identity theft or during a felony. Twenty years if defendant has prior convictions for access device fraud. Aggravated identity theft under 18 U.S.C. § 1028A adds mandatory consecutive two years if you used another person’s identity in connection with fraud. Multiple counts are charged for each unauthorized transaction or each separate card possessed in trafficking cases. These charges stack to create long potential sentences.

Wire fraud charges under 18 U.S.C. § 1343 (twenty-year maximum) are commonly added to credit card fraud cases. Bank fraud under § 1344 applies when fraudulent transactions affect financial institutions. Computer fraud under 18 U.S.C. § 1030 charges apply to hacking cases that resulted in stealing payment card data. Conspiracy charges under § 371 or § 1349 add exposure for participating in trafficking rings or organized fraud schemes.

Defenses to Credit Card Fraud Charges

Authorization – you had permission to use the card or account, the cardholder gave you the card to make purchases, or you had legitimate access to account information. Lack of knowledge – you didn’t know the card or account number was stolen or unauthorized, you believed you had permission to use it, or you received the card in a transaction you thought was legitimate. No intent to defraud – you intended to pay for purchases, you believed charges were authorized, or errors were mistakes not deliberate fraud.

Insufficient evidence – prosecutors can’t prove you’re the person who made the fraudulent transactions, someone else had access to cards or account numbers, or digital evidence doesn’t reliably link you to the fraud. Unlawful search and seizure – police violated Fourth Amendment rights when searching your property or accessing your computer. In trafficking cases, mere possession isn’t enough – prosecutors must prove you knew the devices or account numbers were stolen and you intended to use or transfer them fraudulently.

Restitution and Civil Liability

Criminal restitution for credit card fraud requires repaying victims’ actual losses – including cardholders, banks, and merchants who suffered fraud losses. Restitution amounts include fraudulent charges plus costs incurred investigating and responding to fraud. Federal courts impose restitution as part of sentence and tie it to supervised release – failure to pay restitution can violate supervised release conditions. Civil liability includes damages sought by banks and merchants through civil lawsuits, often exceeding criminal restitution amounts.

Asset forfeiture proceedings target property purchased with fraud proceeds. Cars, electronics, jewelry, or other property bought with stolen cards are subject to forfeiture. Bank accounts containing deposits from fraudulent transactions are frozen and forfeited. The government seeks forfeiture of proceeds from trafficking in stolen card data even if defendants already spent the money, creating debt obligations that survive prison sentences.

Todd Spodek has defended credit card fraud cases throughout his career – SDNY, EDNY, federal courts nationwide. When you’re charged with federal credit card fraud, call 212-300-5196.