Group of Cubans running massive credit card fraud ring had base in Batavia

    Eduardo Quinones     Jose Quinones     Misael Rios     Yasser Chartrand     Claudia Diaz     Yaily Santurio     Fernando Pizarro     Humberto Roche

In January 2015, state and federal law enforcement raided a house at 3618 Batavia-Oakfield Townline Road, Batavia, and by appearances, it looked like a bust on a marijuana growing operation.

Agents at the scene that day declined to share information and a spokesperson for Homeland Security said that the fact that there were sealed indictments in the case prevented her from providing even a general overview of what investigators hoped to uncover.

It turns out, state and federal investigators weren't looking for marijuana -- though they had a pretty good idea they would find a pot-growing operation -- they were looking for evidence in a massive credit card fraud ring involving a group of Cuban nationals from Tampa, Fla., who set up shop in Batavia and Lockport.

Six of the seven defendants associated with the house have now entered guilty pleas in U.S. District Court, so we now have access to much of the details associated with the investigation that lasted for six months, starting in the fall of 2014.

There were two more people arrested and charged in Onondaga County who weren't charged federally.

It was likely a much larger operation, according to available information, but investigators concentrated their efforts on the individuals tied to the best, most solid evidence, said Ron Wilson, an investigator with the State Police in Batavia.

As many as 20 or 25 individuals could have been involved at various times during the criminal enterprise and the people arrested by federal authorities may not have been even the highest ranking in the organization, but according to the evidence uncovered, hundreds of people in Western New York were victims of credit card fraud at a price tag in the $1 million range.

It took several investigators, including Wilson, Investigator John DiPasquale with NYSP Lockport, Sean Needham with Homeland Security, and John Ferris with the U.S. Secret Service, six months to build the case against the individuals eventually arrested on federal charges. Early on Pat Welch with East Aurora PD brought another case to Wilson. Assistant U.S. Attorney Russell T. Ippolito Jr. prosecuted the case.

Wilson said he and DiPasquale dedicated as much as 50 hours a week on the case for six months, and Ferris and Needham also put in hundreds and hundreds of hours into the investigation.

It all started with a complaint routed to a trooper from a resident in Oakfield who had his debit card with him, but it had been used to make a purchase at a Tops Market in Hamburg.

The case made its way to Wilson and he secured a surveillance video that showed two subjects working together.

Wilson used law enforcement communication channels looking for help within the region (sharing the photo, among others, at the top of the story), but no IDs were forthcoming, so he published the photo on CrimeStoppers. Needham saw that post and called Wilson.

"I think I can identify one of your guys," he said.

Misael Toledo Rios was picked up for questioning, but Wilson quickly realized that Rios wasn't the man in the Tops video, but Rios, who had a prior record related to credit card fraud made some admissions that put him on the radar of investigators.

About this time, a Town of Batavia employee reported he was victimized as well, with his Discover card number being used for thousands of dollars of charges at chain retailers in Erie County, including the purchase of a full set of weight-lifting equipment from Dick's Sporting Goods later located in the Batavia house.

Meanwhile, Welch called Wilson and said he had a similar case he was handling and that the subjects in the Hamburg video matched a video he had that related to a fraudulent transaction in East Aurora.

Then DiPasquale called Wilson and said that Cornerstone Bank had just turned over information on 200 bank customers who had been victimized by credit-card cloning.

"At that point, we knew we had the same kind of investigation, but we didn’t know we had the same individuals," Wilson said.

The men decided to work together to find the criminals.

They started assembling the jigsaw puzzle.

The suspects, particularly the man in that first Hamburg Tops video, provided a stream of cued-up clues, showing up frequently on the cameras of Big Box stores and, once investigators could connect names with faces, in their own social media posts wearing the same outfits, sunglasses and rings that were clearly visible on them in surveillance videos. This match of fraudulent transactions and social media posts helped investigators link locations, purchases, times and dates.

For example, one of the women arrested usually posted from Tampa, Fla., where she apparently lives with her two children, but on the day of at least one fraudulent purchase, she posted a picture of herself with a geo-location of Oakfield, NY. There's also a picture of her where the Walmart in Batavia is obviously identifiable in the background.

"The investigation was arduous, to say the least," Wilson said. "Every day was something new with them."

The primary suspects were working out of the house in Batavia and a house in Lockport. In order to get a search warrant, investigators needed rock-solid evidence of potential crimes. It couldn't be just a hunch.

Wilson started collecting garbage from the Batavia residence, which is how he came to realize there was obviously a marijuana growing operation going on there.

Much of the case was built before the search. Ippolito wanted a solid case to prosecute. Crime scene photos had to show faces clearly, clothing had to match, times and locations had to match, so the investigators had to cross-reference every shred of evidence and only use the receipts, photos and social media postings that wrapped up each accusation in a tight bow.

That's why the final criminal charges covered only a bit less than $100,000 in fraudulent transactions, even though in the time frame of the credit-card cloning operation, the suspects probably conducted transactions worth as much as $1 million.

That's also why there was neither a state nor federal charge for the marijuana growing operation. Too many people had access to the house in Batavia that there simply wasn't enough evidence to tie any one or two people specifically to cultivating pot.

As investigators were moving in, the suspects started moving further afield, with transactions popping up further and further east.

Wilson said he was getting nervous that the suspects were getting ready to wrap up operations in WNY and head back to Florida.

Then, they got caught.

Police in DeWitt, which is in Onondaga County, received a complaint from a store of a fraudulent credit card transaction and the suspects were still in the store.

Two subjects were picked up and questioned. It became clear to investigators that there were other individuals involved. They figured out what hotel they were staying at and what vans they were driving. The District Attorney got involved. Search warrants were obtained.

What investigators found were hundreds of credit card blanks, the hardware and software to make credit cards and evidence of prior purchases.

All six were arrested and charged in Onondaga County and the evidence obtained by investigators there helped seal the deal on search warrants for Batavia and Lockport.

"They did an amazing job in DeWitt," Wilson said.

While the U.S. District Attorney's Office has released information in the federal indictments and guilty pleas in the case, the scope of the case and its ties to Batavia, Lockport and DeWitt were not discussed openly pending convictions of five of the suspects.

Investigators believe members of the ring acquired the card numbers through two common methods: placing a scanner over the top of a card reader on a gas pump, allowing the card numbers and information to be read and stored in memory for later collection, and by purchasing numbers from hacker websites (often referred to as the "dark web").

As part of the surveillance during the investigation, one member of the group was observed placing a reader on a pump at a gas station in Oakfield. A week later, he retrieved it.

The dark websites allow credit-card cloners to search for high-limit cards within a certain geographic location. For the Cuban ring operating in Western New York, a card belonging to a resident in Oakfield or Batavia, for example, wouldn't raise suspicions for the bank or credit card company if used in Rochester or Buffalo, where a card issued to a resident in Nevada or California might. This would allow the scammers to get more use out of the card before it was shut off.

The ring members purchased merchandise, such as sunglasses, clothing and jewelry and gift cards and gasoline for later resale.

One member of the ring owned a Ford F-250 pickup with a plastic fuel tank that could hold 300 to 400 gallons of gas in the bed that had a hose and pump nozzle attached. At the time, gas was selling for about $4 per gallon, so a member of the ring would fill up the plastic tank and sell the gas for $2 or $2.50 a gallon, and since the initial purchase was with a stolen credit card, the proceeds were pure profit.

A seventh suspect is in custody and awaiting extradition from Costa Rica.

Below are the names and information on the people identified in the cases:

• Jose Valdivia Quinones, 41, Cuban National from Tampa, convicted of bank fraud, was sentenced to 10 months in prison and required to pay $1,642.51 in restitution. He was known to investigators as "JVQ" and was one of the men captured in the surveillance video at Tops in Hamburg. He as also among the six indicted in Onondaga County (Town of DeWitt).
• Eduardo Hernandez Quinones (Hernandez), 46, Cuban National and former resident of Miami, was convicted of conspiracy to commit bank fraud and was sentenced to 31 months in prison. He was ordered to pay $13,785.29 in restitution. He was also arrested in DeWitt.
• Misael Toledo Rios, 46, a Cuban National and former resident of Miami, was convicted of conspiracy to commit bank fraud and was sentenced to 31 months in prison. He was ordered to pay $13,785.29 in restitution.
• Yasser Carrillo Chartrand, 24, a Cuban National, entered a guilty plea to conspiracy to commit wire fraud in U.S. District Court. He's scheduled to be sentenced in September. He was also arrested in DeWitt.
• Claudia Diaz Diaz, 22, a Cuban National, was convicted of conspiracy to commit bank fraud and sentenced to time served and three years probation. Diaz was convicted of using the credit cards (79 different accounts), but not tied to the operation to obtain numbers and make cards. She was also among the six arrested in DeWitt.
• Yaily Santurio Milian, 32, Cuban National, was convicted of conspiracy to commit bank fraud. She was scheduled to be sentenced in May, but we don't have information on her sentencing. She was also arrested in DeWitt.
• Fernando Pizarro, 38, of Miami Gardens, Fla., and Humberto Roche, who is homeless, were also arrested in DeWitt, but not charged federally.

These two photos show one of the suspects wearing the same blue jacket in social media posts that she was seen wearing at a time and place where she used a cloned credit card.

File photo: An officer removing a marijuana plant from the house at 3618 Batavia-Oakfield Townline Road, Batavia, which served as a base of operation for members of the credit card cloning ring operating in Western New York.