For almost a year, a Phoenix couple laughed all the way to the bank with money from hundreds of other people, according to a federal indictment filed in U.S. District Court in Arizona.
They were nothing if not prolific. Prosecutors said they used almost 2,000 stolen credit cards or credit card numbers to get cash. They took a total of $1.5 million, lawyers on both sides agreed.
But this was not your classic low-tech swipe-and-swindle operation, according to federal prosecutors. They say 37-year-old Dewayne Frederick Johnson and 33-year-old Antoinette Suzanne Arangua “encoded stolen credit card numbers onto other cards, tested the stolen numbers at various stores and gas stations, and then used them at gas stations to make larger purchases.”
“As part of their scheme,” prosecutors alleged, the pair, “possessed more than a thousand stolen credit card numbers, as well as a credit card encoder, credit card embossers, and other materials and equipment they used to create fraudulent credit cards.”
On May 17, 2017, for instance, Arangua used 15 different credit card numbers in 30 minutes at one Phoenix convenience store, prosecutors allege. Three months later, Johnson tried to use 18 stolen credit card numbers on 11 transactions at a Phoenix store.
Most of their activity was in Phoenix, between February and October 2017. Some was in Tucson.
A federal grand jury indicted Johnson and Arangua on charges of conspiracy and possession of illegal equipment, devices, and counterfeit cards. In addition, the government charged each with four counts of aggravated ID theft.
On Monday, Johnson entered court using a wooden walking stick, shackled in orange prison garb, and changed his plea to guilty on one conspiracy count. The government agreed to drop the other six other charges and recommend the low end of possible sentences. He faces up to five years in prison. He had been staring at 17 to 23 years behind bars, court documents suggested.
The case against Arangua continues, prosecutors told U.S. District Court Judge Diane Humetewa.
The March 2018 indictment spells out how the government thinks the two pulled off their caper. On Monday, Johnson admitted in court the government had it right. In a firm, deep, clear voice he said, "I used credit card embosser to defraud the government."
How? Judge Humetewa asked.
"To buy gas and other property that wasn't mine," Johnson replied.
With whom did you conspire? Humetewa asked.
"My co-defendant," Johnson said. And with that, he'd thrown his companion under the wheels of the federal justice system. Arangua had earlier told authorities she was Johnson's girlfriend and the mother of his child, court records said.
Johnson agreed that he and Arangua obtained “a large number” of credit cards without cardholders’ or financial institutions’ permission. Then they encoded the stolen numbers onto other credit cards in their names. Sometimes, prosecutors alleged, they used an embosser to stamp their names onto the manufactured card.
They tested the new fake cards on small transactions at gas stations mostly in and around Phoenix. They continued testing cards until they were certain the banks hadn’t cancelled them.
Emboldened, they then took the working phony cards to supermarkets and bought prepaid debit cards and gift cards.
In one scheme, prosecutors alleged, Johnson and Arangua went to gas stations with gift cards, deliberately targeting those that were busy, and pumped a small amount of gas. Then they’d go to the overworked attendant "who would be less likely to catch on to their scheme" and ask for the remaining balance in cash.
Eventually the financial institutions would get wind of the fraud and suspend the accounts.
Then Johnson and Arangua would start over on a new set of cards, prosecutors allege.
Some of the cardholders, financial institutions, and gift-card vendors were located outside Arizona.
Between August and October, the pair went to more than 200 gas stations and convenience stores in Phoenix and Tucson.
In October, federal agents searched the couple's Phoenix apartment on North 27th Avenue, their cars, and a Tucson hotel room they used. Agents found 1,700 credit card numbers, more than 100 credit cards, two credit card embossers, 17 pieces of white plastic, one device that reads and decodes credit cards, and 74 prepaid gift or debit cards.
The couple were arrested in March after federal agents had them under surveillance and used a tracking device on their cars to follow their movement, court records show. Video footage from the stores shows the couple trying to use the cards, and it matched information provided by vendors and banks, the government claimed in court documents.
Johnson is scheduled for sentencing on September 19. Arangua's trial, for now, is set for October.