Hanover Police and the Federal Secret Service are investigating nearly 50 cases of illegal credit card skimming that officials say took place at Panda House Chinese Restaurant during November.
"Skimming" is an increasingly widespread practice in which a barcode scanning device is used to copy credit card information that that can be downloaded onto a computer and ultimately used to make counterfeit cards.
So far, over 45 Panda House customers have reported credit card fraud to the Hanover Police. No Dartmouth students have yet come forward, although others affiliated with the College have reported illegal charges to their cards.
Charges totaling perhaps several hundred thousand dollars have been racked up all over the country and in foreign countries, including Hong Kong.
According to the Secret Service, skimming operations are particularly prevalent in Asia, where illicit use of American credit cards can go undetected for long periods of time.
The prime suspect in the investigation is a former Panda House employee whom restaurant managers say abruptly quit his job on Dec. 2.
This kind of transience -- where newly hired employees skim cards and then accept employment elsewhere before their actions can be detected -- is a typical feature of skimming schemes, Secret Service Agent Todd Gregory said.
Although police suspect that the credit card information was stolen by a single Panda House employee, the counterfeit cards may have been used by multiple parties who either bought the cards on the black market or were part of an organized crime network orchestrating the fraud.
Officials declined to release the suspect's name because his identity has yet to be confirmed by law enforcement agencies in other states, but said that tracking down the suspect has proved difficult since they have few details that would help determine his whereabouts.
Despite the paucity of information, the details of the case resemble other instances of skimming that have caused credit card companies significant losses. These similarities have led officials to suspect that it may be part of a larger nationwide -- or even international -- operation that necessitates the involvement of the Secret Service.
"Whoever this person is was an accomplice in a bigger scheme," Hanover Police Captain Frank Moran said. "I have no doubt that this is organized crime, although it's too soon to say where it originated or which group."
Moran also saw a link between Panda House's Chinese ownership and the Asian ethnicity of the people thus far apprehended for making illegal charges on the cards, though he did not indicate whether those apprehended were U.S. citizens or not.
However, the U.S. Attorney's Office can choose to prosecute the case regardless of the citizenship status of the perpetrators since the laws apply to where the crimes took place rather than the criminal's official residence, Gregory said.
According to Moran, Panda House management failed to collect employee information -- required under Federal immigration and tax law -- that might give police the leads they need to proceed more quickly.
A Panda House employee said that their establishment did not have the suspect fill out any information forms because he was still in training when the skimming occurred. However, the INS requires completed information forms of any paid employee -- fully-trained or not.
Panda House could therefore be in trouble for failing to follow proper hiring procedures, although any prosecution would not be under the jurisdiction of the Hanover Police, Moran said.
In addition to the Employment Eligibility Verification form required by the INS, the IRS requires a W-4 tax form to ensure that all salary transactions are aboveboard and all owed taxes paid.
"You've got to wonder how the IRS does its job when this kind of thing happens," Moran said.
Each time the Secret Service recovers a counterfeit card, it analyzes the printing techniques used to create the card in an attempt to link it to other recovered counterfeits.
The process, though, is necessarily a long and painstaking one that is only complicated by the difficulty of sharing information between Secret Service bureaus around the globe, Gregory said.
In the meantime, officials stressed that credit card holders need to be wary of fraud, especially since skimming technology is now readily available on the black market and restaurant customers often let their cards out of sight without thinking twice about it.
"This is sort of an FYI for society that it's pretty easy to perpetrate these crimes," Moran said.
