Two arrested in Santa Rosa, 25,000 tampered gift cards found

(KRON) — Two people were arrested in Santa Rosa and police found 25,000 compromised gift cards. Police said Yongsheng Zhao, 29, of El Monte, and Zhipeng Li, 33 of Monterey Park, were responsible for “gift card draining” scams throughout California. The duo was also linked to an international criminal network, the Santa Rosa Police Department announced this week.

The scam was carried out by thieves who removed legitimate gift cards from retail displays in stores, recorded or altered the activation information, then resealed the gift card in the original packaging before returning them to the displays, according to SRPD. Unsuspecting victims purchase the tampered gift cards, only to have the funds drained moments after activation.

Santa Rosa police used Automatic License Plate Reading cameras to spot a vehicle connected to the scam as it traveled into Sonoma County last month.

“The vehicle was observed stopping at numerous CVS locations in Sonoma County. When the vehicle stopped at the CVS location at 2700 Yulupa Avenue, an undercover detective sergeant followed Zhao into the store and witnessed him manipulating gift cards on store shelves while also concealing a large stack of gift cards that were in his possession. Detectives coordinated a traffic stop of the suspect vehicle by an SRPD patrol officer near the intersection of Bennett Valley Road and Warm Springs Road,” SRPD wrote.

Zhao and Li were detained while officers searched their vehicle. The search discovered 10,000 gift cards bundled and coded by store location, police said. Notes and ledgers documenting an extensive operation spanning more than 200 CVS locations in California were also found, police said.

Investigators said some of the gift cards were traced back to CVS stores in Rohnert Park, Petaluma, Sebastopol, and Santa Rosa.

Detectives searched a hotel room on West A Street in Hayward where Zhao and Li rented a room. Inside the room, detectives found nine boxes containing 15,000 more gift cards. “Investigators concluded the suspects had been conducting these operations across California for several months, striking dozens of communities,” SRPD wrote.

Zhao and Li were arrested and booked into the Sonoma County jail for burglary, grand theft, forgery, and conspiracy.

A Sonoma County Superior Court Judge set bail at $100,000. Li remains in custody and Zhao was released on bail.

The police department wrote, “We want to remind the public to always purchase gift cards from reputable retailers and to carefully inspect packaging for signs of tampering. The cards seized by SRPD in this investigation appeared legitimate on face value, and many could only be determined to be compromised after opening the cardboard containers and accessing the card and/or PIN numbers underneath the metallic screens.”