Join us to hear the story of Chirag Patel, a former Choice Hotels employee who socially engineered reward points and credit card numbers from several of their franchised hotels. This is eCrimeBytes.com S 2 Ep 8-4 – Socially Engineered Reward Points With Chirag Patel – Act 4: Arrest And Sentencing.
For the background, check out the prior acts:
Socially Engineered Reward Points With Chirag Patel – Act 1: Drugs And Spyware
Socially Engineered Reward Points With Chirag Patel – Act 2: The Hack
Socially Engineered Reward Points With Chirag Patel – Act 3: Spyware Detected!
Sources:
- https://www.justice.gov/usao-az/pr/hacker-sentenced-51-months-prison-stealing-customer-credit-card-numbers
- https://www.courtlistener.com/docket/63158296/united-states-v-patel/
- https://www.12news.com/article/news/crime/hacker-sentenced-stealing-hundreds-credit-card-numbers-arizona/75-81cac896-cb60-4923-83eb-d9af670475bd
Transcript:
00:00:10:00 – 00:00:31:10
Keith
Hey, welcome back to eCrimeBytes Season two, Episode eight. This is Chirag Patel and his hotel reward points. Oh boy. You know, if you’re jumping in by Act four, I got to kind of warn you, you got to listen to Acts one through three to really understand what it is we’re bringing to you in this act, because this is this is the ending.
00:00:31:10 – 00:00:57:02
Keith
This is the conclusion. This is his arrest. This is his sentencing. I’ll try to give you a very quick update, but trust me, it’s it’s not like going back and listening to what actually happened in this case. You have this individual named Chirag Patel works with unnamed amount of conspirators online to socially engineer reward points from a hotel company he used to previously worked at.
00:00:57:02 – 00:01:05:15
Keith
The hotel company is Choice Hotels. They’re in 40 plus different countries, so they’re not a small hotel chain.
00:01:05:15 – 00:01:19:07
Keith
He has fraudulently stolen reward points and moved them to a bunch of accounts that he owns. He’s it looks like he’s trying to stay in swanky hotels at different places using the proceeds of this crime.
00:01:19:09 – 00:01:34:23
Keith
He also has credit card numbers that he stole from the e-commerce system. So even though we’re talking about reward points, he’s also trying to use old fashioned credit card theft to make some in his criminal scheme as well.
00:01:34:23 – 00:01:42:21
Keith
So you’re back an act four which is just the arrest and sentencing, all that background we gave you all the way up to this point.
00:01:42:24 – 00:01:49:27
Keith
And now we have him being indicted on 22 accounts. I told you it was 12 before, but
00:01:49:27 – 00:02:10:24
Keith
I didn’t want to tell you how many exactly it was, because there would be no suspense. It was 22 counts in his indictment. So the count one is conspiracy. Counts two through 12. That those were the counts I talked to you about at the end of the last act, when I told you about all those hotel reward stays, at least the attempts.
00:02:10:26 – 00:02:34:24
Keith
Each one of those attempts was a count. That’s two through 12. That’s wire fraud. Okay, You could stop there and go, Holy shit, That’s a lot of counts. We got more counts. 13 through 14 is aggravated identity theft, which is not good. And then count 15 through 22. And this is sort of the kiss at the top. Computer fraud
00:02:34:24 – 00:02:40:20
Keith
And you can get a pretty hefty sentence off of computer fraud.
00:02:40:20 – 00:02:41:07
Keith
So
00:02:41:07 – 00:02:48:23
Keith
January 12th of 2022. So we’re now jumping ahead to 2022. Everything we’ve talked about up to this point was in 2021 and before
00:02:48:23 – 00:02:53:11
Keith
January 12th, he’s arrested. In April,
00:02:53:11 – 00:03:15:28
Keith
so only a couple of months later he’s detained specifically because he’s deemed a flight risk. So there’s actually this form that I’m seeing in most of these cases now, that seems to be a pretty standard form of when they reject bail for a defendant. And so I’m trying to give you just what they checked off that was relevant.
00:03:15:28 – 00:03:32:23
Keith
And the court said there’s clear and convincing evidence that he’s a danger to the community. That’s one checkbox. So he needs to be, you know, detained. There’s a preponderance of evidence that the defendant is a serious flight risk. Therefore, he needs to be detained.
00:03:32:23 – 00:03:39:24
Keith
There’s a serious risk the defendant will flee and that there’s no condition that we could put
00:03:39:27 – 00:03:46:18
Keith
on him being free, that would bring him back if he were to be free.
00:03:46:18 – 00:03:58:09
Keith
There’s no condition or combination of conditions that we could put to assure the safety of others in the community. And they find that there’s a preponderance of evidence that as to the risk of flight, that
00:03:58:09 – 00:04:06:29
Keith
before this case. So there is there is a set of crimes before this case that the defendant has committed.
00:04:07:02 – 00:04:20:26
Keith
So that way in this case, it makes him more apt to run. So I hope I explained that correctly. It’s like saying if you add this case to his other case, he’s more apt to run in this case. So we need to detain him.
00:04:20:28 – 00:04:27:20
Seth
He’s a flight risk and he’s a prior criminal. So there’s no way that we’re going to let him go free on bail.
00:04:27:23 – 00:04:38:01
Keith
And here at the very bottom, this should have been the first bullet in my opinion, was there is a record of prior failure to appear in court as ordered. So he’s going to be in there.
00:04:38:28 – 00:04:50:19
Seth
Right. So let’s flash forward to this recent May of 2023, Patel pleads guilty to two counts of plea. He pled to count 15 on computer fraud. So let’s talk about a sentencing.
00:04:50:19 – 00:04:58:13
Seth
So the sentencing happened on May 9th of 2023, although he actually pled guilty back in August.
00:04:58:13 – 00:05:05:19
Seth
And accordingly, the court adjudicated defendant is guilty of the following offenses, which is basically Class C felony of computer fraud.
00:05:05:21 – 00:05:28:17
Seth
And what did he get? Jones He got 51 months, a little more than four years. Five years, five years would be 60 months. So a little more than four years. It’s 48 months, right? With credit for time served. And upon release, he gets another 36 months of supervised release or parole. And this is where it gets interesting is the additional things that he had to do.
00:05:28:17 – 00:05:48:23
Seth
So we’ve seen many of our star criminals here have to do drug treatment and abuse. So that’s certainly applied here, although here he’s got to do it in Florida. I’m not sure why that was, but they had to do it in Florida. But we also learn. Well, then let’s talk about the monetary penalties. 100 bucks.
00:05:49:00 – 00:06:13:14
Seth
But he also got an $87,000 restitution amount. And that was broken between having to pay the overwhelming bulk of that 83,000, almost 84,000 to choice hotels. And then there was somebody named Jean Teer, for 122 bucks and then discover credit card financial services, another $3,400, almost $3,500. And then
00:06:13:14 – 00:06:15:22
Seth
they gave him $100 fine.
00:06:15:25 – 00:06:16:14
Seth
Oh.
00:06:16:16 – 00:06:24:18
Keith
It’s Seth. And wait for it. Wait for it because this is the point where I went, What the fuck? Yeah.
00:06:24:18 – 00:06:49:10
Seth
So in addition to the sentencing and I thought this was kind of weird because we don’t have any other facts that kind of led up to this. He has to participate as instructed by a probation officer and the substance abuse, and he cannot drink alcohol and he has to submit to testing, but he also has to register as a sex offender, a compliant with all federal, state, tribal and other local laws.
00:06:49:11 – 00:07:13:08
Seth
I like that they listed tribal as well, and he must attend and participate in a sex offender treatment program with sex offender specific evaluations as approved by the probation officer. There’s nothing in the code, so that leaves it up like a throw in or I guess with other facts that we were just unaware of or that were not disclosed that indicate that he was also a sex offender.
00:07:13:11 – 00:07:14:10
Seth
It’s pretty rough.
00:07:14:12 – 00:07:15:18
Keith
Yeah, it was.
00:07:15:18 – 00:07:40:13
Keith
When I read that, I was like, What the hell did I miss? Now, you remember I did tell you that little snippet about his detention hearing or the bail where it said he had a prior criminal history, he had failure to appear. I suspect there was some kind of sexual crime prior to this that he had an issue with had failure to appear.
00:07:40:13 – 00:07:58:06
Keith
And now he’s being charged with this crime. And they’re going, hey, you know, he ran in this other one and now he’s he has this other one of ours connected to it. And this is an issue. So, yeah, that was so that’s it for the sentencing. So we’re at this point down to the final thoughts. And
00:07:58:06 – 00:08:05:24
Keith
in this case, in most of our cases, this whole scheme, everything boils down to trust.
00:08:05:26 – 00:08:30:25
Keith
Do you trust usually doing something somebody asks you to do is usually what a lot of these cases will boil down to. And that’s what it boils down to in this case, if the hotel desk employee had not trusted the caller, Patel and his coconspirators might not have been able to install key logging software. And none of this may never have happened.
00:08:30:28 – 00:08:56:15
Keith
Now, there was a gap in the court paperwork that I couldn’t really I couldn’t connect the dots. And it was he worked. He being Patel worked at Choice Hotels for several years and I couldn’t tell if he had information from working there that he could use in his social engineering hack that would make him a little more effective at it.
00:08:56:17 – 00:09:21:19
Keith
I couldn’t I couldn’t connect those dots. I think that’s a possibility because they mentioned that he did work at Choice Hotels. So at a minimum, at a very minimum, he knows kind of how the hotel system works at Choice Hotels because it’s like a whole franchising type of process. And, you know, once you learn that franchising process, I think, you know, you then know
00:09:21:19 – 00:09:22:29
Keith
how it works for everybody else.
00:09:22:29 – 00:09:24:23
Keith
That’s a franchisor in there as well.
00:09:24:25 – 00:09:42:27
Seth
Well, we know he worked at the hotel for eight years, so we certainly knew some things. Now what I found interesting was it would have been so easy for any of the general managers or the front desk to say, Hey, I need a little more evidence that you work here. What’s your employee I.D. or something along those lines.
00:09:42:27 – 00:10:05:20
Seth
And I guess he might have been able to use his own employee ID at least prior one. I mean, but, you know, this generally, like, you know, most companies have some basic process or they should have some basic process to like have a specific passcode or a specific safe code or a safe word that kind of confirms you are, in fact, who you say you are and that you’re current and not a former.
00:10:05:20 – 00:10:14:12
Seth
I mean, it’s not crazy for former employees to go back and try to pilfer things from their employer, but this was fairly egregious. Security lapses, for sure.
00:10:14:12 – 00:10:18:14
Keith
Yeah, in a very modern time. I mean, this is like 2000.
00:10:18:15 – 00:10:24:27
Seth
Yeah. This isn’t like 1998 where you’re like, all right, this is, you know, 2018, right? So fairly recent at.
00:10:24:29 – 00:10:41:18
Keith
2018, 2019. So in the last couple of years, I mean, in my my opinion, this is relatively recent crimes. Usually usually a crime happens, you don’t really know about it for a couple of years and then it gets prosecuted. Then you find all the stuff that Seth and I present to you, and that’s like two or three years after the crime.
00:10:41:18 – 00:10:44:06
Keith
So this is a relatively recent crime,
00:10:44:06 – 00:11:04:28
Keith
and it was one of the first cases that I ran into that used reward points. I will keep my eyes open for other point cases because I always find interesting how people can monetize their hack. And sometimes it’s not as simple as having a credit card number and just using it. Sometimes you have to take a reward point and figure out how you can get dollars out of that.
00:11:05:01 – 00:11:24:21
Seth
So I’ve dealt with several reward point fraud instances in my day job, and I can tell you a couple of things. One, one of the things I think that fraudsters like about it is it’s in their mind, a victimless crime, Right? What’s The worst that can happen is, you know, whoever has the reward points, pilfered or siphoned, just, you know, you re-up them, right.
00:11:24:21 – 00:11:46:15
Seth
It’s not a real dollar for dollar thing. It’s earned points. And you can just restate them. I’ve also surprised that he didn’t be smarter about it and just pump them into a, you know, a new debit card. Right. I mean, I was involved in a case investigating, rather, about a user who had kind of like similar to the office space for Superman three idea taking pieces of reward points or like
00:11:46:15 – 00:11:50:05
Seth
denominations of tiny, tiny amounts, $0.18 here that kind of thing.
00:11:50:07 – 00:12:02:15
Seth
And, you know, move them all into a centralized account and then suddenly they had some real money and moved on to like an Amazon gift card. Or here, I guess he did use a Walmart gift card at one point. So I have seen that before. So it is definitely currency.
00:12:02:15 – 00:12:07:11
Seth
Very interesting. And then let’s talk a little bit, Keith, The actual sentencing.
00:12:07:13 – 00:12:33:24
Keith
Yeah. So my last, final thought and this is this sentence was exactly the same as our last case. And if you didn’t listen to our last case, that was the brothers who ran Helix, which was a Bitcoin mixing service, and our brothers stole money from law enforcement that law enforcement seized from his brother’s illegal activity. I know it sounds like a Jerry Springer episode, and it pretty much is.
00:12:33:24 – 00:12:49:23
Keith
But the important thing is, is he got 51 months in that case for $5.3 million worth of theft, whereas Mr. Patel got 51 months in this case for about $100,000 worth of theft. And I told you earlier
00:12:49:23 – 00:12:57:16
Keith
I’m trying to come up with, an easy way of thinking about, this person got away with this much, but kind of had to give away that much.
00:12:57:18 – 00:13:12:15
Keith
And in this case it was for Patel and the gentleman in our prior Harmon in our prior episode, it was 51 months. And now you could argue that in our last episode he didn’t spend $5 million.
00:13:12:15 – 00:13:17:24
Keith
I think total that maybe a little over a million because he bought a condo, I think.
00:13:17:26 – 00:13:33:03
Keith
But the point being is in the last case, that 5.3, by the time the government got it back even minus what the criminal spent was 12 million. So the government actually made money on that seizure.
00:13:33:08 – 00:13:51:03
Seth
Or because the bitcoin Yeah they had Bitcoin went up here it was clearly I mean the proportions don’t add up right. In terms of he stole a hundred grand, he got four years, this guy stole 12 million or 5 million, depending on your perspective. They got the same amount of time. I suspect this was tied to a couple of things.
00:13:51:03 – 00:14:12:09
Seth
One, it wasn’t a first time offense. Clearly, he had been in trouble with the law previously, as noted by the sentencing guidelines and the the bail guidelines. And if he was involved in similar sexual misconduct, I suspect, they threw the book at him. That’s why you can’t kind of treat all these cases equally in terms of sentencing. But yeah, crime doesn’t pay, my friend.
00:14:12:12 – 00:14:16:17
Keith
Yeah, definitely doesn’t. Do you have anything else to add to that before I take us out?
00:14:16:18 – 00:14:19:02
Seth
No, I just other than I do think you know,
00:14:19:02 – 00:14:23:13
Seth
the rewards points is currency is an interesting thing. We should look into it further.
00:14:23:13 – 00:14:43:28
Keith
Yep. All right. So how do you reach us? Well, first of all, if you like anything in this act or in this episode or anything about us, if if my hair is looking decent today, please like and subscribe to his podcast on whatever app you’re on. I try to push it out on as many different platforms as possible so that way you don’t have to come to us that way.
00:14:43:28 – 00:15:07:14
Keith
You can watch us on whatever you’re comfortable with, and if it’s LinkedIn, if it’s YouTube, whatever it is, please like us. Please subscribe there. Now, specifically for our audio only listeners, we have Apple Podcasts where you have a star system. If you could give us a five star and then in the description, just tell us which episode you like the best or what you thought was the most humorous about a particular episode.
00:15:07:17 – 00:15:32:16
Keith
And that helps us move up the charts there. And lets people that haven’t heard of us find us. If you haven’t been to our website, please go there. It’s just ecrimebytes, e c r i m e b y as in yellow milk t e s dot com. And across the top there, depending on if you’re on your phone or desktop, either click a button or it’s just there for you.
00:15:32:18 – 00:15:41:17
Keith
There’s all our social media links and we have glossary links and newsletter links and all that kind of stuff up there. Just have fun and check out all the stuff that we made for you
00:15:41:17 – 00:15:45:14
Keith
with that. This is where I preview next week
00:15:45:14 – 00:16:02:21
Keith
and what I’ve got on the screen for you now is next week. It’s thumbnail. And it’s romance and elderly scams with Kenneth Anim. And you’re probably like, okay, you see Kenneth Anim is in the middle of that picture there.
00:16:02:24 – 00:16:23:14
Keith
But you got this angry guy on the left hand side and you got this angry looking woman on the right hand side. And I will tell you, I spent time this last weekend and I actually put the search, angry old people into my clip art source, and this is what came out with angry old people. So this is what you have this week,
00:16:23:14 – 00:16:27:19
Keith
Seth, is Kenneth who is scamming.
00:16:27:19 – 00:16:46:09
Keith
He well, he’s a romance and elderly scammer. So not only does he target elderly in those type of scams, but he also does the romance scam of, Hey, I’m trapped in another country. I need just X amount of dollars, send it to me and then I’ll be yours soon. We’re going to get into all that and it’s going to be a very, very interesting case.
00:16:46:11 – 00:17:05:12
Keith
And there’s going to be a plot twist that Kenneth is not the only person doing the scam here. Kenneth has got somebody close to him helping him with the scam that you’re going to go, Holy shit, I probably didn’t see that coming. So tune in with us next week with eCrimeBytes and we will bring to you romance and elderly scams with Kenneth
00:17:05:12 – 00:17:08:20
Keith
Anim. Thanks. Bye.
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