Crime ring behind 'substantial' $4 million food stamp fraud enterprise at Detroit-area Sam's Clubs

Three suspects have been charged in one of the largest retail fraud cases to cross Michigan law enforcement's desk after an alleged crime ring was found to be using stolen credit card data to scam Metro Detroit stores out of more than $4 million in purchases. 

The criminal organization, which includes both boosters and fencers, is made up of at least 10 individuals, the Michigan attorney general's office said Tuesday morning.

Those involved used stolen EBT card data from residents in California, Washington, and Michigan to purchase merchandise at several Detroit-area Sam's Clubs locations.

"These aren't regular retail fraud cases," said Attorney General Dana Nessel. "These aren't low-level felonies."

The defendants were arrested during eight separate raids executed last week, and they were arraigned Friday on charges of conducting a criminal enterprise and multiple counts of food stamp fraud. 

The suspects' ages are 39, 23, and 47. Nessel said the case was the first of her newly-created Organized Retail Crime Unit to achieve charges. More arrests are expected.

"This unit is a first-of-its-kind in the nation and I anticipate others will follow Michigan's lead," she said. 

The assistant attorney general overseeing the task force said the ring was set up in late 2022. He wouldn't go into many details about the case since it's ongoing, but did say the EBT data was likely purchased from the dark web.

The illegal purchases included at least 8,000 victims who had their private information stolen. 

The attorney general's office first picked up on the fraud when the Michigan Department of Health and Human Services noticed several large-scale purchases being made with EBT cards at big box stores in Metro Detroit.

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From there, the widening probe included Michigan State Police, Canton Police, the FBI, the U.S. Border Control, and Department of Agriculture. 

People's personal information was likely stolen by electronic skimmers that can read credit cards, recording the information for someone who intends to sell the data online. 

Retail fraud is a $45 billion-dollar industry and includes varying levels of theft from small-time shoplifters to wide-scale crime rings.