West Bloomfield brothers convicted in $9.2 million gift card fraud scheme

WEST BLOOMFIELD, Mich. – Two brothers from west flower field were convicted in connection with a $9.2 million fraudulent scheme centered on the sale of illegally obtained gift cards.

Harry Gappy, 56, and Hadeer Gappy, 48, both of West Bloomfield, are accused of purchasing fraudulently obtained gift cards and discounted Visa and MasterCard from February 2016 to February 2018.

Officials said the brothers, who owned and operated Bottoms Up Liquor in Detroit, would buy the cards and sell them to online resellers at a higher price. These dealers would electronically transmit funds to bank accounts belonging to the Gappys, officials said.

Over two years, the brothers purchased $9.2 million worth of fraudulently obtained cards, based on full face value, according to authorities.

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People are reportedly using compromised credit and debit card accounts to buy gift cards at stores including Target, Macy’s, Walmart, Home Depot, Kohl’s and JCPenny, officials said. They would then sell the cards at a discount to the Gappy brothers at Bottoms Up, records show.

Authorities said those involved often lined up outside Bottoms Up before it opened so they could sell the cards. They could refer to a price list in the store window showing the rate Gappys would pay for certain cards, officials said.

The Gappys would pay 70% of face value for Walmart and Home Depot cards, and 60% of face value for Kohl’s and JCPenny cards, according to court records.

Over two years, the brothers sold about $6.3 million worth of gift cards to online shoppers and resellers, authorities said. They also processed over $2.9 million in store value card transactions, totaling approximately $9.2 million.

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Hadeer Gappy was sentenced in April to four years in prison for his part in the conspiracy, officials said.

Harry Gappy was sentenced Friday (July 15) to four years in prison after pleading guilty to conspiracy to commit wire fraud, authorities say.

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