Officials: 13,800 credit cards ‘skimmed’ in alleged scheme

By Rich Coleman

Monday, Sept. 20, 2010 | 6:22 p.m.

Federal charges have been filed against a Las Vegas man in connection with the production and use of counterfeit credit and debit cards that allegedly were encoded with information skimmed from gas pumps in Las Vegas and elsewhere.

Zelalem Berhe, 41, is charged in a criminal indictment with five counts of bank fraud, possession of 15 or more counterfeit access devices, possession of access device-making equipment and aggravated identity theft, said U.S. attorney for Nevada Daniel Bogden.

From about April 16, 2009, to May 4, 2010, the indictment alleges that Berhe and others installed devices used to steal magnetic information from credit and debit cards — known as "skimming" — at gas pumps in the Las Vegas area, as well as in Florida and Arizona.

Berhe and others used computers, encoders and software programs to transfer the stolen credit and debit card information to counterfeit credit and debit cards through a process called re-encoding, authorities said. A re-encode is when someone uses a real credit card and erases the magnetic information on the magnetic stripe to replace it with the stolen information.

Berhe and others allegedly skimmed about 13,800 credit and debit card account numbers using this system and unlawfully used the stolen account numbers to fraudulently obtain about $591,872 from more than 10 financial institutions, officials said.

According to the indictment, during two local traffic stops on Feb. 7 and May 4, 2010, officers recovered skimmers, laptops with access device-making equipment from Berhe, as well as 18 counterfeit credit/debit cards.

If convicted, Berhe faces up to 30 years in prison and a $1 million fine on each bank fraud count, up to 20 years in prison and a $250,000 fine on each access device count, and a minimum of two years in prison for aggravated identity theft.