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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of New York

Friday, June 10, 2016

Five Men Arrested For Operating A Credit Card Fraud Scheme

CONTACT:      Barbara Burns
PHONE:         (716) 843-5817
FAX:            (716) 551-3051

ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that five defendants are under arrest and charged by criminal complaint with operating a credit card fraud scheme. Under arrest are:

• Kyle Bertrand
• Paul Kozlyuk
• Richard Lipke
• Michael Gerone
• Herbert Street

The defendants are charged with conspiracy to commit wire fraud, aggravated identity theft, and trafficking in unauthorized access devices. The charges carry a mandatory minimum penalty of two years in prison, a maximum of 20 years, and a $250,000 fine.  

“This case serves as a reminder that consumers should never provide credit card information to anyone but known, trusted companies and persons,” said U.S. Attorney Hochul. “In addition, legitimate companies will seldom if ever threaten to terminate a service unless credit card or other financial information is provided immediately over the telephone.”

Assistant U.S. Attorney Melissa M. Marangola, who is handling the case, stated that according to the complaint, between January 2015 and July 2015, the defendants made fraudulent and unauthorized credit card purchases over the phone at various stores in the Rochester area. The purchases were made at stores such as All County Lawn, Tractor, and Trailer, Home Depot, Victor Power Equipment, Charlotte Appliance, Admar Construction Equipment, Brodner Equipment, Del Monte Spa, Wehner Mower, Inc. Bentley Brothers Tractor Equipment Supplier, GBG Inc., Little Power Shop, Diesel Power Products, and Best Tile. 

The defendants randomly called people on the phone and stated that their cell phone or cable would be shut off unless they provided credit card information over the phone to settle delinquent bills. The defendants then used the stolen credit card information to make the purchases.

Items purchased by the defendants using the stolen credit cards included snow plows, gas generators, saws, freezers, electric ranges, dishwashers, microwaves, washers and dryers, gift cards, jet skis, and furnaces. Further investigation determined that some of the items were listed for sale on Craigslist.

A search warrant was executed at the residence of Michael Gerone and law enforcement officers recovered some of the items includinf a refrigerator, dishwasher and furnace. Richard Lipke was also found in possession of some of the items. 

Hochul further stated, “Consumers should know common sense safety measures which can be taken. Upon receiving a call that a bill is allegedly owed, obtain the telephone number and name of the caller. Next, look up or research for yourself whether you owe the bill, and further, the customer service information for that creditor.  Never be rushed, and threats to terminate service are often red flags for a fraudulent scheme.  These and other tips can be found at the”
The complaint is the culmination of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

Financial Fraud
Updated June 20, 2016