Amanda Forrester / news@whmi.com

Two Chinese nationals have been charged by the Michigan Attorney General in a large-scale gift card scam.

Attorney General Dana Nessel announced that the FORCE Team arrested the two at a Dearborn hotel on March 5. They were each charged with one count of conducting a criminal enterprise, a 20-year-felony, and two counts of possession of a fraudulent or altered transaction device.

FORCE is an acronym that stands for Focused Organized Retail Crime Enforcement.

46-year-old Guangji Zhang, of Irvine, California, and 35-year-old Huachao Sun, of Los Angeles, were arraigned in the 51st District Court on March 7. Both are accused of conducting a large-scale fraud scheme.

“It is alleged these men were conducting a fraud scheme that begins with the theft of empty, unsold gift cards from retail stores,” according to the press release from Nessel. “The cards are then tampered with to reveal their unique redemption numbers, recorded by the scammers then concealed once again with an adhesive to appear as though they have not been tampered with. It is alleged that the scammers then return the altered gift cards to their original intended retail point of sale and use computer programs to monitor when any card is activated with a balance of funds. As soon as a shopper places a balance on the card, the scammer is able to transfer the balance into another digital account. The gift card, when given as a gift and redeemed, is already depleted.”

The investigation was initiated by a special agent with the United States Postal Inspection Service. The agency is a federal partner of the Attorney General’s FORCE Team. A package addressed to the two defendants that the agent determined was suspicious contained more than 1,500 gift cards. The address was a Dearborn hotel.

The FORCE Team and detectives from the Michigan State Police Fraud East team conducted surveillance on the suspects. The two allegedly visited Meijer locations in White Lake, Waterford, Auburn Hills, Southgate, Allen Park and Taylor over two days and placed altered gift cards back in the store stock.

Search warrants were executed on their vehicle and hotel room after their arrest on March 5.

According to the press release, the men had more than 3,000 gift cards in their possession.

“Sophisticated fraud schemes undermine consumer trust and can cause significant financial harm, and I am proud of my FORCE Team for their efforts to shut down these operations and hold bad actors accountable,” Nessel said. “They will continue to pursue and prosecute those who engage in scams targeting Michigan residents and businesses. I urge everyone to stay alert and be cautious when buying gift cards. Taking a few extra moments to check for tampering can save you from becoming a victim.”

Nessel said her office has reason to believe these two aren't the only ones committing this fraud, and that it has popped up in multiple areas of Metro Detroit.

The FORCE Team and the Organized Retail Crime Unit were both established in January 2023 by Nessel to “target criminal organizations that steal products from retailers to repackage and sell for a profit.” Two assistant attorneys general serve on the unit full time. They work with special agents from the Department of the Attorney General and detectives from the Michigan State Police to investigate and prosecute such crimes. The FORCE Team, which is a first-in-the-nation unit, also works with the FBI’s Detroit Fraud and Financial Crimes Task Force and the Postal Inspection Service.

The defendants are expected to appear in court on March 18 for a probable cause conference.

Anyone who suspects they may have purchased a tampered with gift card should contact the number on the back of the card. Nessel also recommends purchasing gift cards directly from the retailer, as opposed to buying them at a store that sells various gift cards. Gift cards should be checked before buying one to make sure it doesn't appear tampered with.