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Gift card display at Walgreens

GRAFTON, Wisconsin. – Police arrested a man in connection with a gift card scam Thursday, and Ozaukee County prosecutors say he was part of a criminal network that extends far beyond the state line.

The raid began when the manager of a Walgreens store in Grafton I noticed something strange on Thursday afternoon.

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“(The manager) alerted us to a man who was in the store and they believed he was putting gift cards back on the shelf,” said Grafton Police Public Information Officer Patrick Brock.

When officers arrived at the store, they said the man, now identified as 52-year-old Guangguo Zhu of Chicago, was gone. But it wasn’t far.

“Cedarburg, which is right next to us, also got the call that the man was there,” Brock said.

The officers detained Zhu as he left the Cedarburg Walgreens. They then searched his car and found duffel bags with 1,807 gift cards inside. Prosecutors said Zhu had no intention of using any of the gift cards for his own purchases.

Court records indicate Zhu is part of a large-scale gift card scam. Scammers will steal or illegally obtain gift cards, recover the card numbers and PIN, and place them inside stores for people to purchase.

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“Once it’s activated, the money is transferred to the scammer through the dark web or what’s called a ‘bot.’ Then that money becomes yours,” Brock said.

While officers put an end to the scam in Ozaukee CountyDetectives said Zhu’s vehicle has been seen everywhere Wisconsin – as well as in Indianapolis and Chicago – over the past month.

“The gentleman who was arrested was probably in the lower circle of this criminal enterprise,” Brock said.

Police urge people to inspect any gift cards before purchasing them in a store.

“If you feel any tags or barcodes placed on you, that gift card is likely compromised,” Brock said.

Zhu is now accused of Ozaukee County with four counts of forgery and three counts of identity theft. A court commissioner set his bail at $250,000.