Texas Police Seize $1.7 Million in Tampered Gift Cards, Arrest Two in 'Sophisticated' Scam

Police in north Texas announced the arrest of two suspects and the seizure of more than $1.7 million worth of gift cards in connection with a "sophisticated" multi-state gift card tampering ring.

The Burleson Police Department said officers recently were alerted when a Flock Safety automated license plate reader system identified a vehicle associated with fraud activities at Home Depot stores.

The suspect vehicle was located in the parking lot of a Target Store on NW John Jones Drive in Burleson.

Officers observed two men exiting the Target store and entering the suspect vehicle. They stopped the vehicle and discovered over 1,000 "neatly packaged" gift cards inside.

Investigators then executed a search warrant at a hotel in Carrollton, Texas, where another 4,017 gift cards were discovered, valued at an estimated $1.72 million.

Both suspects, who were not named, were charged with theft of property over $300,000; fraud, possession or use of credit card or debit card over 50; and fraud, use or possession of identifying information 50 or more items.

Burleson police said investigators coordinated with retail loss prevention teams, and law enforcement agencies including a U.S. Secret Service Task Force, Homeland Security Investigations, Immigration and Customs Enforcement, and the Texas Financial Crimes Intelligence Center.

Earlier this year, the Plano Police Department in Texas seized thousands of tampered gift cards for stores including Apple, Sephora, Amazon and Foot Locker amid an investigation into a wide-ranging gift card scam.

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Xiaohong Zhang, a 42-year-old woman, and Xiongling Chen, a 33-year-old man, were each arrested in connection with the scam, but police said there would be additional arrests.

Gift card-draining schemes typically involve scammers stealing the card numbers and PIN codes from unpurchased gift cards, then resealing them and placing them back on store shelves. Once a customer purchases and activates the tampered gift card, the scammers are able to drain the card's funds.

TMX contributed to this report.