Former Subway Franchise Owner Pleads Guilty to Gift Card Hacking Scheme at Subway Restaurants

A California man pleaded guilty today in the District of Massachusetts for his role in a conspiracy to hack into the computerized cash registers of a number of Subway restaurants to fraudulently obtain more than $40,000 in gift cards.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service in Manchester, New Hampshire, made the announcement.

Shahin Abdollahi, aka Sean Holdt, 46, of Lake Elsinore, California, pleaded guilty before U.S. District Judge Richard G. Stearns to one count of conspiracy to commit computer intrusion and wire fraud and one count of wire fraud.   Sentencing is scheduled for Aug. 6, 2014.   Abdollahi, along with his co-conspirator, Jeffrey Wilkinson, 37, of Rialto, California, was indicted on March 6, 2013.   Wilkinson pleaded guilty on Feb. 27, 2014, and is scheduled for sentencing on May 28, 2014.

Prosecutors informed the court that had the case proceeded to trial, the government would have proven that Abdollahi owned Subway franchises in Southern California from 2005 to 2008 and later operated a California company called “POS Doctor,” which sold and installed point-of-sale (POS) computer systems to Subway restaurant franchises around the country.  POS systems are a type of computerized checkout register that allows merchants to manage customer purchases made by credit, debit and gift cards.

Beginning in approximately 2011, Abdollahi and Wilkinson conspired to remotely hack into POS systems in Subway restaurant franchises around the country.  Members of the conspiracy hacked into at least 13 Subway POS systems that Abdollahi sold through POS Doctor and fraudulently added at least $40,000 in value to Subway gift cards.  Abdollahi and Wilkinson used the fraudulent gift cards to make purchases at Subway, and Wilkinson also sold fraudulent gift cards to others using eBay and Craigslist.

The case is being investigated by the U.S. Secret Service.   The case is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam J. Bookbinder of the District of Massachusetts.