A California man entered a guilty plea in U.S. District Court, District of Massachusetts, on Wednesday for selling compromised point-of-sale (POS) devices to Subway restaurants and using the systems to remotely load more than $40,000 on to gift cards – which were later used or sold.
Shahin Abdollahi, who operated under the name Sean Holdt, pleaded guilty to one count of conspiracy to commit computer intrusion and wire fraud, and one count of wire fraud, according to an indictment filed in early March 2013.
Abdollahi is scheduled for sentencing on Aug. 6, according to documents filed on Wednesday. His co-conspirator Jeffrey Wilkinson, a California man who pleaded guilty to his role in the scheme on Feb. 27, is scheduled for sentencing on May 28.
The scheme began some time in 2009, but could be traced back to 2005 when, for three years, Abdollahi operated Subway restaurants.
“From 2005 to 2008, ABDOLLAHI, aka Sean Holdt, owned and operated one or more Subway restaurant franchises in Southern California, where he gained experience with Subway POS systems and Subway gift cards,” according to the indictment.
Around March 2008, Abdollahi started a company called “POS Doctor,” through which new and refurbished POS systems were sold to, and sometimes installed in, businesses across the country, according to the indictment.
Abdollahi sold POS systems to as few as 13 Subway restaurants, including one in Massachusetts, according to the indictment, which explains that most, if not all, of the machines were loaded with a remote desktop application known as “LogMeIn.”
“Members of the conspiracy then used the compromised POS systems to make fraudulent loads onto Subway gift cards, typically in the early hours of the morning when the restaurants were closed,” according to the indictment. “These loads totaled at least $40,000.”
Abdollahi and Wilkinson would then use the gift cards in Subway restaurants, according to the indictment, which adds that Wilkinson would also advertise and sell gift cards on websites, such as eBay and Craigslist, and hand-deliver the cards to buyers.