A Dix Hills man and his brother from Queens led a convoluted gift-card “washing” scheme that raked in an estimated $24 million for shopping sprees, victimizing banks, big name retailers and consumers whose credit ratings were damaged, officials said Wednesday.
Bryan Nathoo, 30, and Christopher Nathoo, 33, of Glen Oaks, Queens, along with their wives and nine others, were named in a massive enterprise corruption indictment unsealed in Queens State Supreme Court. The indictment laid out a complex scheme involving credit card numbers found on the dark web and used to purchase thousands of gift cards for shopping at stores like Bloomingdale’s, Macy’s, Nordstrom’s and Target, according to Queens acting District Attorney John Ryan.
The three-year investigation uncovered evidence that the suspects in the gift-card ring pulled in $1 million a month over two years and used the services of a check-cashing operation in the Bronx as part of the effort to garner cash, Ryan said.
The defendants were charged with various counts, including enterprise corruption, conspiracy and criminal possession of stolen property. They mostly face prison terms of up to eight and half-years if convicted, except for one defendant who was a predicate felon and could face up to 25 years, officials said.
Investigators from the NYPD and the New York State Department of Financial Services worked on the case. Most of the defendants live in Queens, officials said.
The scheme was uncovered in late 2015, Ryan said, when the NYPD’s grand larceny division targeted a stolen property operation in Jamaica, Queens. Investigators found that as part of the operation, gift cards were put through a “washing´ process after they were used to purchase merchandise. The items purchased were returned for either a “cleaned” gift card or store credit cards, far removed from the initial fraudulent purchase and not likely to be canceled by a bank, Ryan said.
At one point, Bryan Nathoo’s wife, Annarrisa Nathoo, 32, allegedly used gift cards to make online purchases for herself and for the remodeling of the couple’s home, Ryan said.
Those in the ring did various jobs, according to investigators. Some were shoppers while others acted as fences and money launderers, among other jobs. Some of the gift cards were resold to an online gift card exchange business in return for checks the Nathoo brothers allegedly laundered through shell companies with the assistance of a separate Bronx check cashing business.
Some of the defendants were released on their own recognizance by Queens State Supreme Court Judge Charles Lopresto while others had bail set in various amounts, said a spokeswoman for Ryan.
Christopher Nathoo’s bail was set at $50,000 while his wife Hama, 32, was freed on her own recognizance. Bryan and Annarrisa Nathoo were on vacation and are expected to surrender at a later date, the spokeswoman said.