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Kevin Bae, 28, was among several people charged -- including the bar owner and his wife -- following a 10-month investigation dubbed "Operation Smiles."
Bae processed transactions with the stolen credit cards and illegally acquired gift cards at the Roxbury club, known as Smiles II, acting Attorney General Christopher S. Porrino said Friday.
“These defendants allegedly racked up millions of dollars in illicit proceeds in the back room of a go-go bar, where they spent hours swiping stolen credit cards and ill-gotten gift cards,” Porrino said. “With these arrests, we have frozen their bogus credit and put a stop payment on their criminal schemes.”
Charges against the defendants included racketeering and money laundering.
Bails range from $100,000 to $250,000.
The others charged:
Kevin Lipka, 61, of Livingston, co-owner with his wife of the company She-Kev Inc., which does business as Smiles II, a strip-club bar on Route 46 West near Route 10 in Roxbury. He's accused of leading the criminal enterprise with the help of key associates;
Peter Vasilipous, 71, of Elizabeth, a manager of Smiles II, who authorities said partnered with Lipka in the criminal enterprise;
Eric Olsen, 47, Roxbury, a second manager of Smiles II who handled finances for the business and allegedly partnered in the criminal enterprise.
Jordan Turner, 23, of Jamaica, who was accused of bringing stolen credit cards and illegally acquired gift cards to Lipka and his associates and sharing in the profits;
Kevin Rodriguez, 23, of Whitehall, Pa., who authoritie said brought stolen credit cards and illegally acquired gift cards to Lipka and his associates and shared in the profits.
Lipka’s wife, Shelly Lipka, 60, was charged with misconduct by a corporate official and failure to file a tax return. She was released on a summons.
“Most people think of gift cards as the perfect present when they don’t know what to give, but criminals think of them as a perfect way to launder money anonymously,” said Division of Criminal Justice Director Elie Honig. “Working with the Roxbury Police, we showed these alleged con artists that their perfect fraud scheme was not so perfect after all. They face the most serious financial charges provided for under state law.”
The stolen credit card numbers were used to buy pre-paid gift cards issued by credit companies such as Master Card and Visa at various retail stores, including Target and Home Depot, authorities said.
The gift cards were later cashed in through phony transactions at Smiles II, and the proceeds were divided among the participants, they said.
Some of the defendnats also used stolen credit cards to buy high-priced merchandise at retail stores, particularly Home Depot, authorities said. The merchandise was later returned for in-store credit that could be used later, or for in-store gift cards that could be exchanged for cash on the Internet, they said.
In other cases, the defendants bought alcohol for Smiles II using stolen credit cards or illegally acquired gift cards.
The crew used other schemes, as well, Porrino said.
In one scheme, he said, vehicles were fraudulently offered for sale through eBay and Craigslist. Unsuspecting purchasers would be directed to pay for the vehicle with pre-paid gift cards from credit companies, such as Master Card and Visa, and those gift cards also were allegedly processed through Smiles II.
The vehicles were never shipped to the victims.
In other instances, the defendants bought gift cards through variations on the common “grandparent” scam, in which an elderly victim is contacted by someone posing as the grandchild or nephew of the victim and claiming to need bail money to be released from jail, Porrino said.
The victim would be told to pay the bail by purchasing gift cards and providing the gift card information by phone to a “police officer’ involved in the arrest, he said.
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