Ex-con with "calling" faces fraud charges

A former Little Rock Hall High School basketball star who in December spoke of turning his life around after a stint in prison now is accused of being part of a multistate fraud ring that sells credit-card numbers stolen from restaurant patrons.

James Edmond “Jimmy” Hinton, 40, of Little Rock potentially faces indictment by a federal grand jury when the panel meets during the first week of November. On Oct. 10, he and two other people were accused in a federal complaint of participating in a fraud conspiracy. Prosecutors have 30 days after a complaint is filed to seek an indictment, or the complaint is dropped.

In an affidavit supporting the complaint, a U. S. Secret Service agent alleged that Hinton and the other two people – Carlos Lamont Brown of Texas and his girlfriend, Chantell Denise Bailey – were part of a crime ring in which waiters used small, hand-held “skimming devices” to swipe and store data from credit and debit cards used at two Little Rock restaurants.

In typical skimming operations, waiters are paid for supplying the “trapped” data to a middleman, who then downloads the data onto a computer and sells it, sometimes for hundreds of dollars, through Internet “crime networks,” said Brian Marr, special agent in charge of the Arkansas Secret Service office.

Marr said the thieves often imprint the account information onto blank cards bearing the logos and holograms of the account holder’s credit-card company, and then the cards are used to make purchases, with the merchandise being billed to the unsuspecting victim’s credit card or, in the case of debit cards, checking account. Victims usually are unaware of the theft until reviewing their monthly credit card or bank statements. Marr said other thieves simply imprint the stolen account information onto simple “white plastic” cards that are used at stores where a clerk is in on the scheme. With a valid account number, purchases are readily approved unless a customer’s credit-card company tracks his patterns and turns down any out-of-the-ordinary purchases, he said.

INTERSTATE OPERATION In this case, two unidentified waiters stole account numbers from at least 22 customers at the Olive Garden restaurant at 10715 N. Rodney Parham Road and at Copeland’s of New Orleans in the Shackleford Crossing shopping center. According to the affidavit, the thefts occurred during September and in early October and came to light when employees of Metropolitan National Bank in Little Rock, as well as police in Hot Springs Village, received theft complaints and contacted the Secret Service. Neither of the waiters suspected in the thefts still is employed at the restaurants, and both ended up helping federal agents gather information that led to the arrests of Hinton, Brown and Bailey, the affidavit states.

At least 72 fraudulent purchases and attempted purchases have been made in Arkansas, Texas, Georgia, Tennessee, Mississippi and Washington using the accounts of the known victims, according to Special Agent Charles Briscoe’s affidavit. “It’s a problem throughout the whole United States,” Marr said Friday. But locally, “We got this at a very early stage.” Marr said easy access to major interstates makes Arkansas a potential target of traveling thieves and keeps agents on their toes. “These things come out of organized groups, predominantly,” he said. He also noted that, “As the economy gets worse, you see counterfeiting and creditcard fraud increasing.” ARREST DURING SEARCH Last December, Hinton was featured in an Arkansas Democrat-Gazette article focusing on his efforts to “start over” after a five-year prison term from his stint as a “high-rolling” drug dealer.

Briscoe’s affidavit states that Hinton, Brown and Bailey were arrested inside Hinton’s apartment on Reservoir Road during the execution of a search warrant on the night of Oct. 9, just as Brown, known as “Dro,” was retrieving phony account numbers from a skimming device for placement on cards.

Unbeknownst to the three, the waiters had been cooperating with the Secret Service, and federal agents had loaded phony account numbers onto the device before one of the waiters gave it to Brown at Hinton’s apartment, the affidavit states.

Agents had tracked the thefts to the two waiters after an investigation showed that the victims ’ cards all had been used at one of the two restaurants, and that all the victims were served by the same waiter. The two waiters turned out to be roommates.

During brief court appearances on Oct. 13, U. S. Magistrate Judge Beth Deere released Hinton into the custody of his parents, ordering him to maintain contact with pretrial-services officers.

U. S. Magistrate Judge Henry Jones ordered the other two defendants to remain in custody. Jones’ written order states that Brown has “an extensive criminal record in Arkansas and Washington,” as well as six charges of failing to appear in court in Washington. Jones also noted that Brown “gave false information to the pretrial services officer upon interview and attempted to hide during the execution of a search warrant in this case.” Bailey agreed to be detained, according to court documents.

Jones recused from Hinton’s case because, according to defense attorney Garry Corrothers of Little Rock, the judge knows Hinton’s family. Corrothers said he didn’t know that Hinton had been interviewed in December about his visit to Washington Elementary School, where he talked to students as part of a motivational program called “Keep It Real,” urging them to stay away from crime.

No one returned a reporter’s telephone call to Hinton’s parents’ home.

In 2006, four years after Hinton’s release from prison after serving five years of a 20-year sentence for being caught with a kilo of cocaine, then-Gov. Mike Huckabee pardoned him. Hinton said in December that he hoped to expand his “Keep It Real” program statewide and eventually see it go national. “It’s my calling,” he said.
UNOBTRUSIVE DEVICES Marr said that the hand-held devices used in skimming operations can be the size of a pager, or even smaller, making them nearly undetectable to customers whose cards are carried off by waiters to ring up a sale. Marr said scam-minded waiters or employees of other merchants usually swipe the data from the customer’s card quickly and unobtrusively with the hand-held device “while en route to their point-of-sale terminal.” " The smallest we’ve seen is 1 inch-by-1 inch, " he said, explaining that the smallest devices can usually hold data from only 10 cards, while larger ones can hold data from 200 or 300 cards.
Typically, he said, a waiter will spend three to five days gathering data before the data is downloaded onto a computer.

Some skimming schemes employ devices that are much larger than the hand-held skimmers, fitting over automated teller machines at banks. The devices are often so sophisticated that they appear to be a part of the ATM, and customers who insert their cards into the machines have no idea that the data is being captured by a thief.

“There are a lot of very ingenious people out there,” Marr said.

While news reports show that the ATM scheme has targeted bank customers in several large cities, Marr said those schemes aren’t common in Arkansas.