Credit card fraud foiled at airport
Investigators arrested 5, halted nationwide scam
A year ago, Spencer Dixon and four of his friends went to Milwaukee’s Mitchell International Airport to fly home to Atlanta.
Two of his friends had purchased the tickets the day before at the American Airlines counter. The group showed up for the 6:53 a.m. flight as planned. They never made it on board. The Chase credit card used to buy their tickets was a clone, created using a stolen number, and Milwaukee County Sheriff’s detectives were waiting at the gate.
The group was arrested and found to have 62 credit or bank cards between
them — 47 confirmed fraudulent — and $17,000 in gift cards.
Soon, detectives and prosecutors realized they had hit upon something much larger: a nationwide credit card fraud scheme.
The dark web
The scam was sophisticated.
The crew’s leaders — identified by investigators as Dixon and Eric L. Spann — would search for stolen credit or bank card numbers for sale on the dark web, hidden websites that can’t be accessed without special software.
Then they imprinted blank credit cards with the real names of their coconspirators, known as “mules,” whom they sent into stores to buy gifts cards or other items.
Spann and Dixon used a specialized machine to encode the card’s magnetic stripes with the stolen financial numbers.
The cards could be re-coded with different stolen numbers and used over and over again. Investigators noted the raised numbers on the front of the card frequently did not match the magnetically encoded numbers.
When Dixon and Spann were arrested in Milwaukee, each had an encoding device with them.
Bold and ‘unusual’ tactics
The “mules” used their real names. “It was unusual,” Assistant District Attorney Bruce Landgraf said in an interview.
“They used their true identities in the stores because they knew they would be out of town soon,” he said.
It was bold, but it worked.
By the time any fraud was discovered, “they would be safe at home, hundreds of miles from here,” Landgraf wrote in a court document.
A prosecutor considering the case likely would assume they used fake names and would not issue a charge or seek a warrant unless there was strong ID evidence, he wrote.
Plus, Dixon and Spann seemed to choose numbers by region to avoid triggering fraud alerts.
If a Wisconsin cardholder made purchases in Utah, for example, that likely would prompt the bank to alert the customer. When the crew came here, they used stolen account numbers based in Wisconsin.
At least two people whose numbers were stolen never noticed the fraud.
They simply paid their bill.
Scam uncovered
The Milwaukee trip in April 2017 was apparently Dixon’s first time running the show.
The 27-year-old, who once played professional basketball in Romania and Kosovo, texted with Spann in advance and they debated when to end their trip.
“We should be back before that but if we getting bread I’m goin wherever bread takes me lol,” Spann wrote.
Later, Dixon texted: “lol I never wanna be in a state more than 3/4 days.”
Investigators linked the two men and their crew to at least 24 fraudulent transactions in south-central and southeastern Wisconsin between April 20 and April 22, 2017.
They found at least 55 individuals’ account numbers had been compromised.
The group’s downfall came from an alert American Airlines employee.
On April 16, 2017, the airline official thwarted an attempted purchase of tickets between Salt Lake City and Atlanta. The official continued to monitor transactions with names like “Span,” “Reed” and “Dixen.”
The employee identified — but was unable to stop — the purchase of tickets between Milwaukee and Atlanta by the group on April 20, 2017. When the group purchased return tickets back to Atlanta, the transaction was flagged as fraudulent.
American Airlines notified the Milwaukee County Sheriff’s Office, which has jurisdiction at Mitchell Airport, and detectives made the arrest on April 22, 2017.
‘Biggest mistake of my life’
Dixon and Spann were polite and courteous to detectives.
Dixon, now 28, claimed he was visiting Milwaukee to try to get his clothing line into boutique shops here.
He admitted to traveling previously with Spann but requested an attorney when the detective began asking questions about his recent trip to Salt Lake City.
Spann, 28, said he worked as a freelance graphics and fashion designer. He had attended some college courses, most recently the Art Institute of Atlanta-Decatur, but did not have a degree. His work history was mainly sales and customer service.
In a later letter to the court, Spann described how he lived below the poverty level while in nursing and fashion school.
“I lived in cheap apartments with my brother; we were barely making ends meet and to be honest, barely eating,” he wrote. “For the most part, without heat, resulting in very cold winters and no running hot water. I then began to reach my breaking point.”
It was then, he said, that he turned to white collar crime, which “ultimately was the biggest mistake of my life.”
More crimes
Dixon, Spann and their accomplices arrested at the airport — Astagshia Lobasco, Shawn Porterfield and James A. Reed — each were charged with conspiracy to commit credit fraud, a felony.
As their cases in Milwaukee County moved through the court system, Spann and Dixon were out on bail.
They did not stay out of trouble. On Nov. 8, five days after making a court appearance in Milwaukee, Spann was arrested at a mall in Minnetonka, Minn.
Police said he had a scanning device — another encoder to make cloned credit cards — and arrested him with another “mule,” a woman.
Between the two of them, they had 52 gift cards worth thousands of dollars, according to Minnesota authorities.
As for Dixon, investigators had seized and searched his phone for evidence of fraud after his airport arrest. They noticed a photo created on April 1, 2017, showing Dixon fanning $100 bills.
At first, investigators in Milwaukee thought it was a “brag” photo, showing the profits from the credit card scam.
They reconsidered after Feb. 9 when Dixon was arrested during a traffic stop in Marietta, Ga. State troopers there found about four ounces of marijuana and a .40-caliber gun in his car and nearly $2,000 in Dixon’s pocket.
Investigators in Milwaukee County filed a new search warrant and went through the phone again, turning up photos showing Dixon with a gun and drugs.
Landgraf noted the photos in his sentencing memo. He wrote about one photo in particular that showed “distribution size packages of marijuana buds,” a gun, a roll of cash, a phone and jewelry sitting atop Dixon’s court papers.
“I do not interpret this a sign of respect for the legal system,” the prosecutor wrote.
An ‘insidious’ crime
Credit card fraud and identity theft may not be a life or death situation, but it is not a victimless crime.
One woman whose bank number was used illegally by the crew told the judge in a written victim impact statement how she was “embarrassed and stressed out” when her card was declined in a store.
The woman, who was pregnant, had to shut down her checking account and fell behind on her rent and other bills. She reluctantly borrowed money from relatives until her money was returned and she could open another account.
All of the defendants, except Lobasco, have pleaded guilty to conspiracy to commit credit card fraud. Spann and Dixon had other bail jumping offenses considered at sentencing.
Porterfield, 27, and Reed, 25, received a stayed sentence and instead were ordered to serve two years of probation and 100 days in the House of Correction in Franklin.
Lobasco, 21, is expected to enter a guilty plea later this month in Milwaukee County, online court records show. She already received two years probation in Ozaukee County for a related identify theft conviction.
Spann and Dixon, whom investigators identified as the ringleaders, were sentenced in the past two weeks. The judge received numerous letters of support and character references asking for leniency on their behalf.
Milwaukee County Circuit Judge Michelle A. Havas sentenced each to one year in prison and another year and a half on extended supervision. They also were ordered to pay more than $10,000 in restitution.
“There’s an entire class of people that the tentacles of this crime have reached out to, and I’m holding you responsible for this crime,” she said.