LYNNWOOD — Hundreds of thousands of dollars were stolen from Target in a scam by a Snohomish County man, who figured out algorithms for the company’s gift cards, according to charges in King County Superior Court.
The $500,000-plus fraud case was cracked by a journal found in a stolen car at a Kirkland motel.
It was around 6 a.m. Nov. 28, when a Kirkland police officer found a Subaru with no license plates and many purses inside at a motel. A strip of plastic conveniently covered the VIN on the dash. A sloppy paint job left spray paint splashed over the tires, according to charging papers.
Nearby, the officer noticed a man smoking, Jeffery Douglas Mann, 28. Mann watched the officer, but told him he didn’t know anything about the car. He walked away.
Officers learned the Subaru was stolen a week earlier near Lynnwood. In the car police found burnt tinfoil, traces of what looked like crystal meth and more than 150 pieces of mail taken from addresses around Everett. Police recovered jail booking paperwork for a woman, 41, and handwritten notes.
“He can get like 100 check digits in literally minutes,” one of the notes said. “Being around him is how I’ve always gotten my bomb.com card numbers that he’s gotten from Cali and Colorado and places like that.”
A handwritten address book listed info for Jeff Mann, who has ties to Marysville. Letters mentioned going to Target stores that hadn’t been “burnt yet,” with a guy named Jeff. Police found gift cards for Hotels.com, Costco and the online video gaming service Steam, among other evidence.
One Target receipt documented a purchase of $1,582 that had been paid for with dozens of gift cards.
A registry showed Mann had been staying in a room at the Kirkland motel for a few weeks, and that he’d been driving a Volvo with temporary tags. Two days later he was driving the Volvo, with no license plates, when Kirkland police pulled him over. Inside the vehicle police could see about 100 gift cards. Mann had a fake ID and the tags on the car looked obviously forged, according to the charges.
Mann agreed to talk with police for about an hour and a half — and his story often conflicted, the charges say. He told the detective he’d been working in the drywall business, but he couldn’t give details, and eventually admitted he hadn’t been employed for a while.
Detectives asked why he went to far away places to avoid “burnt” Targets. He reportedly said the stores sometimes got suspicious and denied him when he tried to use too many cards at once.
But he insisted to officers that his “side business” with the gift cards was legitimate. He’d buy cards off Paxful.com, a site that converts U.S. dollars to Bitcoin, at a rate of about 50 cents on the dollar, according to his explanation in court papers. He’d sell the cards at a profit, 70 cents per dollar.
Police confronted him about how suspicious that sounded, because gift cards bought at half price probably were stolen.
“Mann claimed to not know that the funds were likely stolen and could not explain why he was being so deceptive if he had nothing to hide and was not doing anything illegal,” Kirkland detective Sean Carlson wrote in a report.
Mann gave police permission to search the Volvo. Inside they found Target receipts; “dozens and dozens of gift cards” from Target, Steam and other businesses; laminating film; printer ink; blank gift card stock; and about a dozen grids full of numbers that were partly filled out.
Police suspect he’d been using the grids to figure out the final digits in a series of gift cards. That could allow him to check balances and cash out the cards.
Eventually, Mann admitted he and a friend had figured out the algorithm for the barcodes that ran on Target cards. He could take a group of barcodes to predict codes on other cards. Those cards would be bought and loaded by unsuspecting customers. He could use his profits to buy thousands of dollars in more gift cards, for resale online.
Lynnwood police had been notified of a gift card scam linked to Mann as early as July 6. Police wrote an overview of what was happening at the Target in Lynnwood, and passed along the case to the U.S. Secret Service.
Target released a statement about the case to The Daily Herald on Wednesday.
“Last year, we identified an organized crime ring in the northwest United States that was accessing funds from select Target gift cards,” the statement read, in part. “We immediately contacted and began working with federal and local law enforcement agencies to investigate.”
A company spokeswoman, Jenna Reck, said Target has added safeguards to protect customers, and that anyone with questions can call the gift card team at 800-544-2943.
Mann was booked into jail Nov. 30. He’s charged with first-degree identity theft, forgery and money laundering in King County Superior Court. Police believe Mann is linked to a group that has stolen at least $500,000 in Washington state. The charges don’t give details about the fraud ring.
Further investigation revealed the magnitude of the losses for Target — at least $249,000 directly attributed to Mann, in Washington, Nevada and Colorado, according to court papers. His bail was set at $200,000.
He was supposed to show up for a jail work crew near the end of December but didn’t hook up his electronic monitoring equipment, according to the King County Jail. He escaped.
“We haven’t seen him since,” jail Capt. Troy Bacon said.
Snohomish County sheriff’s deputies arrested Mann again Sunday. He was being held in the Snohomish County Jail.
Last year Mann’s mother asked for a protection order against her son. He had gone through drug rehab in 2014. But little by little, his mother wrote, she found evidence that he’d been using drugs again and stealing her mail.
“He has gotten credit cards in my name and my late husband that I lost to cancer,” she wrote to a judge in January 2017. “I have found stolen mail in my home. I am afraid of him.”
Caleb Hutton: 425-339-3454; firstname.lastname@example.org. Twitter: @snocaleb.