NEWS RELEASE
UNITED STATES ATTORNEY'S OFFICE
WESTERN DISTRICT OF VIRGINIA
Julia C. Dudley Acting United States Attorney Brian McGinn Public Affairs Specialist |
BB&T Building 310 1st Street, S.W., Room 906 Roanoke, Virginia 24011 (540) 857-2974 FAX (540) 857-2179 |
July 10, 2008
TRIO PLEAD GUILTY FOR ROLES IN CREDIT CARD MASTERING SCHEME
Acting United States Attorney Julia C. Dudley announced today that Steve Allen Black, age 31, Ronald Edward Black, age 26, and Dereck Lorenzo Dunston, age 40, all of Evington, Virginia, have pled guilty in United States District Court for the Western District of Virginia in Lynchburg to a variety of fraud charges related to a credit card mastering scheme they operated throughout the Western District of Virginia, and elsewhere.
“These individuals used deception and fraud for their own personal, financial gains,” Acting United States Attorney Julia C. Dudley said today. “The scheme these three defendants devised was complex and wide-ranging. However, thanks to the tireless work of all the agencies involved in this investigation, the fraudulent activity was uncovered and these men have been brought to justice.”
At today’s hearing, Steve Black, Ronald Black and Dunston, all entered pleas of guilty to multiple fraud counts. Each man pled guilty to one count of conspiracy to commit mail fraud, wire fraud, bank fraud, identity theft and credit card fraud, one count of bank fraud and one count of aggravated identity theft.
The three men were charged in February 2008 in a 25-count indictment. The three defendants admitted in District Court today to participating in activities in which legitimate access device, or credit card, account numbers were successfully coded onto counterfeit access devices.
According to the investigation, as of January 2008, Capital One had more than 500 accounts compromised that accounted for more than 3,000 fraudulent transactions and over $131,000 in fraudulent charges to be made.
In order to obtain counterfeit cards, Black, Black and Dunston either traveled to New York to pick-up counterfeit access devices personally or had them mailed to a variety of addresses within the Western District of Virginia.
To further their scheme, Black, Black or Dunston would meet individuals at a Lynchburg area car wash and either follow or ride with those individuals to local gas stations. Once there, one or all of the defendants would utilize the pay-at-the pump feature and swipe a counterfeit access device as payment for the gasoline or merchandise just purchased. The defendants would then receive a cash payment for approximately half of the cost of the merchandise or gasoline charged to the counterfeit access devices. The proceeds of the transactions would then be split by Black, Black and Dunston.
Throughout the Western District of Virginia, Black, Black and Dunston, who were known as the “Gas Men,” used the counterfeit access devices to purchase goods and services from a variety of local merchants, including: 7-eleven, Amoco Oil, Exxon Mobil, Kroger, Sheetz, Shell Oil and Wilco Hess. Specifically, the fraudulent charges were made at locations in Altavista, Bedford, Forest, Harrisonburg, Lynchburg, Madison Heights, Roanoke and Salem.
In the most egregious cases, the Sheetz store located at 14480 Wards Road in Lynchburg, received 1,198 fraudulent transactions in the six-month period between April and September of 2007. There were 620 fraudulent transactions made at the Wilco store located at 37332 Campbell Avenue in Lynchburg.
When arrested, Dunston was found to be in possession of eight counterfeit access devices on his person. Authorities found another 155 fraudulent access devices in various locations throughout his residence. Law enforcement officials also found an additional 50 counterfeit gift cards in a United States Postal Service 2-day priority mail envelope addressed to “Mr. Black” at Ronald Black’s home address. A total of 213 counterfeit access devices were found that day that represented a total of twenty different financial institutions from the United States and overseas.
At sentencing, each defendant faces a maximum of thirty-seven years imprisonment and a fine of up to $1,500,000. Steve and Ronald Black are scheduled to be sentenced on October 9 at 10:30 a.m. A sentencing hearing for Dunston has been scheduled for October 31, 2008 at 10:30 a.m.
The investigation of this case was begun by the Lynchburg Police Department and handled by the Central Virginia Computer Crimes Task Force, the Federal Bureau of Investigation, the United States Secret Service, the Virginia State Police, the Amherst County Sheriff’s Office, the Campbell County Sheriff’s Office and the Longwood University Police Department. Assistant United States Attorney Charlene R. Day is prosecuting the case for the United States.