A busy scam artist has pleaded guilty to impersonating an IRS representative and duping victims in the Twin Cities and elsewhere into buying more than $250,000 worth of Target gift cards to pay off phony tax debts.
Yu Zhang, 27, of Baldwin, Calif., entered his plea Tuesday in federal court in Minneapolis to conspiracy to commit wire fraud and remains jailed ahead of sentencing on Feb. 27.
The plea deal between the prosecution and defense recommends a prison sentence of 2 to 2 ½ years, restitution of at least $220,000, forfeiture of property obtained because of his crimes and three years’ supervised release.
Minneapolis-based Target found that the suspect traveled to at least 10 stores per day in the Twin Cities to redeem gift cards until his arrest in June at a Target in the north metro, according to the criminal complaint.
In illustrating Zhang’s tactics, the complaint detailed how he tricked a woman in Ankeny, Iowa, into buying three $2,000 Target gift cards and turning them over to him.
The woman received an automated call purportedly from the IRS directing her to call a specific number. She spoke with a man who said he worked for the IRS’ tax-collection arm.
He told the woman she owed $4,058 for the 2013 tax year and would be arrested if she didn’t pay up.
Following the man’s orders, she bought two $2,000 gift cards with cash and provided him with the card numbers and activation codes. Before the woman left the Target parking lot, the charging document said, the fake IRS agent told her she needed to buy another $2,000 gift card in order to remove an arrest warrant. She complied.
Zhang is shown on surveillance video in a Target on University Avenue in St. Paul barely 30 minutes later drawing from the third gift card to buy $2,000 in prepaid gift cards issued by Google Play and Steam.
Anyone with the card number and activation code can use its value without having the physical card. They can redeem it with a smartphone through the Target app or a similar app, or give the numbers to a cashier in a Target store without presenting the actual card.
On June 8, Zhang redeemed a gift card at a Target in Blaine and later that day was arrested at a Target in Andover, the complaint read. He was carrying several hundred third-party gift cards worth tens of thousands of dollars.