J.C. Penney, Target Added To List Of Gonzalez Retail Victims

Written by Evan Schuman
August 27th, 2009

Albert Gonzalez, who has been accused of managing the data breaches at TJX, Hannaford, 7-Eleven and Heartland (among many others), has once again agreed to plead guilty to parts of two of the three federal cases against him, his attorney, Rene Palomino, said Thursday (Aug. 27). Two other major retail names have also been added to the list of retail victims: J.C. Penney and Target, as the list of unidentified retailers shrinks.

Look for Gonzalez to officially plead guilty to the federal charges from Boston, primarily involving TJX, BJ’s Wholesale Club, Boston Market and Sports Authority and New York, primarily involving Dave & Buster’s, on Sept. 11.

This is at least the second time that Gonzalez has danced this particular dance, as he was all set to plead guilty to those Boston and New York charges—or at least a substantial subset of them—but that deal was killed when, according to Palomino, the U.S. Attorney’s Office in Newark accelerated their indictment. Palomino said this new deal does not include any of the Newark charges, but that “Newark has the opportunity to come into it eventually, if they like.”

Target was one of—if not the only—unidentified major retailer in the Boston case, stemming from a series of Florida wireless drive-bys involving Gonzalez, Palomino said. J.C. Penney was one of the unidentified retail victims in the Newark indictment.

Target and J.C. Penney have plenty of company in this mass of federal cyber thief charges. Beyond TJX, BJ’s, Boston Market, Sports Authority, Dave & Buster’s, TJX, Hannaford, 7-Eleven and Heartland, their fellow hacking victims include Office Max, Barnes & Noble, Sports Authority, Forever 21 and DSW.


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Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

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