Former owner of Fort Point Channel hardware store charged with defrauding customers

BELMONT MAN CHARGED IN CREDIT CARD FRAUD SCHEME

ALLEGEDLY USED HARDWARE STORE TO GATHER CARDHOLDERS' INFO

BOSTON, Nov. 29, 2007-Suffolk County District Attorney Daniel F. Conley today announced charges against a Belmont man who allegedly used his Seaport District hardware store to funnel fraudulent charges to customers' credit cards into bank accounts he'd created for nonexistent businesses.

ERIK JOSEPH, 52 (D.O.B. 5/24/56), was arraigned Tuesday in the South Boston Division of the Boston Municipal Court Department following his arrest on one count of larceny over $250. Prosecutors recommended that bail be set at $100,000 to ensure his appearance at his next court date; Judge Roberto Ronquillo set bail at $75,000.

The proceedings reflect evidence developed in the course of an active, ongoing, and focused investigation into the theft of thousands of dollars from an American Express account used at Seaport Hardware in September 2005, as well as evidence of similar fraudulent activity involving the credit cards of other one-time customers at the Congress Street business. The true tally of victims, Conley said, could reach more than 100.

In the 2005 case, Conley said, Joseph allegedly used a dummy business - for which he had obtained an American Express merchant number, a post office box, and a bank account - to bill the customer's credit card for $8,087 in 43 separate charges of less than $200 in the weeks and months that followed. That money, Conley said, was deposited into a corresponding bank account, which Joseph later emptied and closed.

Investigators believe that dozens of cardholders from across Boston and New England have been victimized by the scheme and that Joseph's take may have amounted to hundreds of thousands of dollars. Conley said his office, Boston Police detectives assigned to the Massachusetts Financial Crimes Task Force, and U.S. Postal Inspectors have developed significant evidence that Joseph had set up numerous "shell" companies, each with its own merchant numbers, P.O. Box, and phony contact person.

In October, Conley said, investigators learned that Joseph had recently sold his hardware store. More recently, they learned that he had consolidated and emptied his legitimate bank accounts. Fearing that he could be preparing to leave the area, Boston Police moved in and arrested him Tuesday morning at his Belmont home.

"In an age when many peoples' utility bills, insurance payments, and other expenses are linked to credit cards, an interruption in credit can be devastating," Conley said. "The scope of this scheme and its impact on individuals is shocking."

Joseph was represented at his arraignment by attorney Pat Garin. He will return to South Boston court on Jan. 11.

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