Gift cards, one of the most basic financial products in the US retail market, have become the backbone of a billion-dollar criminal economy that investigators say is moving American money into China.
Homeland Security Investigations agents say Chinese organised-crime groups have built a laundering network that uses US retailers, mobile wallets and cryptocurrency to steal and export wealth.
Operatives inside the US drain compromised gift cards, buy high-value goods such as iPhones and laptops, and ship them to China, where they are resold for profit.
The proceeds are then converted into digital currency and funnelled through Chinese payment platforms, creating what investigators describe as a hidden pipeline of American capital leaving the country.
“The end goal is to cash out stolen money from fraud or other criminal activity,” said Adam Parks, an assistant special agent in charge with Homeland Security Investigations. “When you’re talking about China, the trade relationship gives them the perfect exit.”
It looks small until you add it up … Multiply that by millions of transactions and you start to see what we’re dealing with
The DHS operation, known as Project Red Hook, has exposed a web of China-based organisations using stolen card data and digital wallets to turn everyday US consumer spending into a revenue stream.
