Former gift card store owner sentenced in fraud case

The former owner of an Oklahoma City gift card store was sentenced Wednesday to more than 15 years in federal prison for defrauding Lowe’s and other retailers out of millions of dollars.

Leonard Ray Foster, 48, of Moore, was ordered to pay more than $7 million in restitution to various retailers.

Foster, who owned A-to-Z Giftcards, directed numerous customers to shoplift highdollar items from retailers, according to Oklahoma City federal prosecutors.

The thieves later returned the stolen merchandise without a receipt, prosecutors alleged. In exchange, unsuspecting store clerks gave the thieves store value cards, according to prosecutors.

Foster bought the cards from the shoplifters for a fraction of the card’s value, knowing the cards were obtained through fraud, prosecutors said. He then would upload large batches of cards electronically to Giftcard Zen, an online “cards for cash” exchange business based in Arizona, records show.

The scheme occurred “on a daily basis” between May 2015 and March 2017, according to prosecutors. The gift card shop reportedly was raided and shut down in March 2017 by local and federal authorities.

In November, Foster pleaded guilty to wire fraud and money laundering.

During the sentencing, Assistant U.S. Attorney Julia Barry said the scheme cost retail chains millions of dollars. She told U.S. District Judge David L. Russell there were hundreds of victims.

Lowe’s alone lost $3 million. The home improvement company even changed its return policy because of Foster’s actions, the prosecutor said.

Walmart lost nearly $1 million.

Foster appeared in court Wednesday dressed in an orange jail uniform. After pleading guilty, the judge revoked Foster’s bond when a drug test showed he’d used methamphetamine, according to prosecutors.

Foster told the judge he was “truly sorry,” but did not express much remorse.

Instead, Foster listed many other gift card exchange businesses, including Walmart’s own program.

The judge then stopped Foster and asked him why he was acting as if he was running a legitimate business. The judge noted Foster pleaded guilty and stipulated to there being as much as $9.5 million in losses to various retailers.

Foster said the business was legitimate in the beginning but later turned into something else.

“It grew into something unsavory,” defense attorney David Ogle told the judge.

The defense attorney said Foster created a vehicle for those stealing in the community to “cash out.” Foster denies that was the initial purpose of his business.

Prosecutors, though, alleged there was no evidence Foster ever was operating legitimately.

“I don’t believe for a second that Mr. Foster opened this as a legitimate business,” Barry told the judge.

The prosecutor said the money was spent on cars and “illicit means.”

The judge said, “It’s clear Foster was the leader of the enterprise.”

Foster also sold syringes at his store. The judge said it was an obvious effort to attract drug users to the shop to recruit them in the scheme.

Foster said his business license allowed him to sell medical supplies and the syringes were unrelated to illicit drug use.

The judge sentenced Foster to 188 months in federal prison plus the restitution. The judge also ordered Foster to forfeit a 1969 Ford Mustang, more than $20,000 in various bank accounts and a money judgment of $3.1 million.

Foster has been to prison in the past for offenses related to firearms, drugs, forgery and assault, according to prosecutors.