Three plead guilty to federal charges in card scam

Three Evington men pleaded guilty in U.S. District Court in Lynchburg on Thursday to participating in a credit card scam that cost banks more than $132,000.

According to an FBI news release, the men — known locally as the “gas men” — most frequently used the Sheetz store at 14480 Wards Road, hitting the gas station 1,198 times.

Steve Allen Black, 31; Ronald Edward Black, 26; and Dereck Dunston, 40, all pleaded guilty to one count each of conspiracy to commit fraud, aggravated identity theft and bank fraud.

Assistant U.S. Attorney Charlene Day told the court the three men used card scanners to encode legitimate credit card numbers onto blank cards. They then met people at the Touch of Class carwash in Lynchburg and used the cards to buy gas for them.

In turn, those people would pay the men for about half the value of the gas.

The scheme took place between April 2007 and January 2008, Day said.

The prosecutor said more than 500 credit card and gift card numbers were used more than 3,000 times for a total of $132,485.

While accounts from more than a dozen financial institutions were used, Capital One, headquartered in Richmond, had 537 accounts compromised for a total loss of $131,942.

The day the men were arrested, police found eight counterfeit cards on Dunston and another 155 cards at his home. Police found another 50 counterfeit cards at Ronald Black’s home, Day said.

Under the defendants’ plea agreements, prosecutors will drop remaining charges in exchange for the pleas to the three counts under which they were convicted Thursday. Steve Black faced 14 felony charges; Dunston nine and Ronald Black faced eight charges.

Mark Arthur, Steve Black’s defense lawyer, also said the U.S. Attorney’s office has agreed not to pursue a provision that allows lengthier sentences for fraud schemes that are highly sophisticated. In addition, prosecutors will give the men credit for pleading guilty and accepting responsibility for the crimes and will not object to any request under a provision that allows for reduced sentencing for those with little or no criminal background.

Steve and Ronald Black were scheduled for sentencing on Oct. 9. Both were allowed to remain free on bond.

Dunston was scheduled for sentencing on Oct. 31. He was sent to jail until his sentencing because he has six pending charges in Lynchburg, including assault, drunk driving and two charges of driving on a suspended license.

The men face a mandatory-minimum sentence of two years in prison for aggravated identity theft. Bank fraud carries a maximum penalty of 30 years in prison and a fine of up to $1 million.

Among them, they will have to pay $132,485 in restitution, according to the terms of the agreement.