EVERETT — An Everett pawn shop owner is in trouble with the law over thousands of dollars in fraudulent gift cards.
Jeffrey A. Jones, 49, is accused of buying and selling stolen property out of his downtown Everett pawn business, Sound Loan. He is scheduled to make his first appearance today in Snohomish County Superior Court.
Prosecutors charged Jones with second-degree trafficking in stolen property, a felony, after a year-long investigation into thefts at Lowe’s hardware stores. Investigators believe Jones knew he was buying and selling fraudulently obtained merchandise cards.
Detectives last year learned thieves were returning stolen merchandise to Lowe’s and receiving gift cards for the value of the ill-gotten goods. The store allowed for an unlimited number of returns without receipts and provided store credit for the returned merchandise, according to court documents.
The Everett store’s loss prevention manager contacted Everett police after discovering that between January 2006 and October 2007 more than 300 calls were made from Sound Loan to verify the balance on Lowe’s merchandise cards, Snohomish County deputy prosecutor Travis Johnson wrote in charging papers.
The cards totalled nearly $80,000.
Police tracked the sale of more than 50 Lowe’s gift cards on eBay dating back to 2006. The eBay accounts were registered to Jones, Johnson wrote.
Detectives also reported speaking with two men who admitted that they returned stolen items to Lowe’s for merchandise cards. The men said they sold the cards to Jones at Sound Loan. One man said he sold a $500 card to Jones for $250. He told detectives he thought Jones knew the card came from a bogus return.
The man “believed that the Sound Loan owner was trying to make a quick buck by buying and reselling these cards,” Johnson wrote.
Everett police detective Steve Paxton met with Jones in August and confronted him about the transactions, according to court documents.
Jones told Paxton he’d spoken to another police officer about buying the cards. He said the officer told him it was legal as long as the seller provided Jones with a store receipt showing the balance on the card, court papers said.
Jones acknowledged, however, that he was never told not to complete a pawn receipt for the transaction or report the sales to police, Johnson wrote.
Pawn shop and second-hand store owners are regulated by laws requiring them to thoroughly document their sales.
When someone sells something to a pawn shop, the store must hold the merchandise for 30 days before attempting to resell the item. Store employees also must get identification from the seller, including a verified signature. They also must record descriptive information about the item, including a serial number.
The law also requires pawn shop owners to report the information to their local police department within 24 hours, Paxton said. Generally, pawn shops record the information using a Web-based program called Leads Online. Police are able to access the information on the Internet to check for stolen merchandise.
Shop owners also are prohibited from buying anything from people convicted of a property crime in the last 10 years. Once a year, Everett police provide the city’s pawn shops with a “no buy” list that identifies people who can’t engage in pawn transactions, Paxton said.
Jones allegedly told police he used his eBay accounts to sell the cards. He also sold or traded some of the cards to builders and family members, court papers said. He said he sold the cards to builders for 65 cents on the dollar. He denied buying cards from the men who told police they received them after returning stolen merchandise to Lowe’s, court papers said.
Jones allegedly told Paxton he used some of the cards to buy appliances for his house four or five years ago.
Police have worked with Lowe’s to change their return policies to stop further scams.
Paxton works directly with the city’s 10 pawn shops and second-hand businesses to monitor their compliance. He also works with the owners and employees to help locate stolen property. For the most part they’re very happy to be in compliance with the law, he said.
“Most pawn shops don’t want to do business with people who sell them stolen property,” Paxton said. “It’s bad for their business.”
Diana Hefley: 425-339-3463, hefley@heraldnet.com.
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