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The Russian Card Game 

A peek inside a new form of Russian organized crime and an ingenious method of turning credit card mailings into large amounts of cash

Wednesday, Feb 12 2003
Russian immigrants Igor Kogan and Mikhail Moiseev were in the same business, both dealing in high-end merchandise. Both lived in San Francisco, but preferred to commute outside the city to work, as did many of their associates. In fact, the two men were nearly related, in that Moiseev's wife is the sister of Kogan's longtime girlfriend, Diana Ilyagueva. And for a time, business in the Bay Area's wealthy hills was good for both of them.

Kogan, for instance, might be seen leading a team of associates who would drive up and down the semirural, tree-lined roads that wind around Mill Valley, along Highway 1, above Stinson Beach. There, where mailboxes stand in clusters of five or even 10 along the road, away from expensive homes nestled in the woods, he and his colleagues would go to work, looking for credit cards to lift. With a partner on the lookout, a good businessman could be expected to rifle a cluster of 10 mailboxes in five minutes.

Once a bounty of credit cards had been gathered, the cards would be activated through an interesting, yet stunningly simple, process involving two short phone calls. Someone like Kogan or Ilyagueva would then recruit a shopper, say a young Russian who spoke decent English and had a knack for refusing to take no for an answer. The shopper would go to Macy's, Nordstrom, CompUSA, or some other store, and, under the watchful eye of the recruiter, buy computer equipment or jewelry or some other high-value merchandise. The goods would be slipped to a fence, or, in many cases, returned to the store for cash or for credit -- to the account of the thief's own credit card!

Amusingly, shoppers have told federal agents that this return-of-goods scheme works much better on the West Coast than in New York, where store clerks are unlikely to be concerned about offending customers trying to get refunds.

Although federal agents say they found videotapes of mob movies and Sopranos episodes in apartments they searched during their investigations, the Russian credit card thieves who hit the Bay Area in the late 1990s did not constitute a classic, Mafia-style criminal organization. These thieves seemed to operate within a loose network of "cells" that simply did business with one another, rather than reporting (and passing a cut from each illegal transaction) up the line to a crime boss.

This decentralized organization made the Russian credit card game a tough, time-consuming criminal enterprise to penetrate or prosecute. But it's a game that's increasingly widely played. The Federal Trade Commission recently reported that identity theft complaints doubled in 2002, rising to about 162,000 from 86,000 the year before. It is, according to the commission, the single fastest-growing crime in the United States. And, federal agents note, the stealing of mail is a first step in most identity thefts.

Although no one knows more ways to steal mail than the United States Postal Inspection Service, it took postal inspectors four years, hundreds of hours of wiretaps, and months of surveillance and interviews with petty thieves to crack the Bay Area Russian credit card case. And even then, more than a little luck was involved.

By 1997, reports of stolen mail -- and stolen credit cards in particular -- were pouring into the San Francisco postal inspection office from investigators working for banks and from department store security officers. Eventually, local police and sheriff's departments also began reporting increases in mail theft and the use of stolen credit cards to buy expensive goods in San Francisco. This particular brand of mail stealing didn't seem to fit a pattern familiar to postal inspectors, who handle law enforcement matters for the Postal Service.

But there was some sort of pattern to it.

A veteran postal inspector whose career history includes several years in U.S. Naval Intelligence, Robert Dortch looks, talks, and acts so much the cop that it's genuinely hard to imagine him doing anything other than law enforcement. His office is strewn with commendations, piles of case evidence, and maps with pins in them denoting the geography and connections of crimes.

A man of few unnecessary words, Dortch is wont to refer to hardened criminals as "those knuckleheads" and to produce the sort of detailed reports that leave little room for argument. Identity theft, which includes stealing credit cards in the mail, is a Dortch specialty; he even teaches other law enforcement agencies about it. And over the last four years, he's become an expert on a Russian brand of the crime.

Russian criminals, according to the cops who track them, tend to distinguish themselves from other felons by being, generally, very methodical, enterprising, and industrious in their work. They are not involved in criminal enterprise as an adventurous hobby, or as a source of quick drug money. Instead, for the Russians, theft is about finding loopholes, earning a living, doing business in a less-than-legitimate way. And, for more than four years, it was big business for one particular criminal enterprise run by Russian immigrants in San Francisco.

Last month, three of the main players in that network of credit card thieves -- Kogan, Ilyagueva, and one Inna Zeldovich, who helped facilitate purchases with stolen cards for the group -- pleaded guilty to various felonies in a San Francisco federal court. Through their attorneys, all three declined to be interviewed for this story. Moiseev, who is awaiting trial, was unavailable for comment. At least three others connected to the same theft network already have been sentenced to San Mateo County Jail and state prison. In total, investigators estimate that what they believe to be a network of thieves stole, and used, more than 800 credit cards belonging to Bay Area residents, netting somewhere around $1 million a year.

By 1998, when Dortch and his crew started their investigation, stolen credit card reports were continuing to mount in San Francisco, as were small busts for theft that are usually pleaded down to probation sentences without much jail time.

About The Author

Lisa Davis


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