Criminal Defense Lawyers

18 USC 1029 Credit Card Fraud

You just learned that federal prosecutors are charging you with access device fraud under 18 USC 1029. Maybe you got caught with credit card numbers. Maybe they found a re-encoder or skimmer. Maybe you were buying or selling card data online and didn’t realize the Secret Service was watching the entire time. Now you’re facing federal charges that could mean ten to fifteen years in prison.

Here’s what nobody tells you about 18 USC 1029: the penalties depend heavily on exactly what you possessed and what subsection the government charges. Possessing fifteen stolen credit cards with no actual purchases? That’s up to ten years. But possessing a card skimmer or encoder – the equipment used to make counterfeit cards – that’s up to fifteen years. The equipment is punished more harshly than the cards themselves.

This article is going to explain exactly how the federal access device statute works, why certain possession crimes carry harsher penalties than others, how the Secret Service actually builds these cases, and what defenses might apply to your situation. Because right now, you probably don’t understand the specific subsection you’re charged under – and that distinction could mean years of difference in your sentence.

What “Access Device” Actually Means

OK so before we get into the specifics, you need to understand that 18 USC 1029 isnt just about credit cards. The statute uses the term “access device,” and that covers way more then plastic cards.

An access device includes credit cards and debit cards obviously. But it also covers account numbers without the physical card, PINs and passwords, electronic serial numbers, mobile identification numbers, and basicly any code or number that can be used to obtain money, goods, or services.

Heres what trips people up: the device dosnt have to work. A counterfeit card that hasnt been activated? Still an access device. An expired card? Same thing. Card numbers that have already been cancelled? Dosnt matter – possessing them with intent to defraud is still a federal crime.

This means you can catch federal charges for having card numbers on your computer even if you never actually used them for anything. The possession itself, under certain circumstances, is the crime.

The 15-Card Rule: Possession Without Purchase

This is what competitors articles wont explain, and its probly the most important thing to understand about how these cases are charged.

Under subsection (a)(3) of 18 USC 1029, its a federal crime to “knowingly and with intent to defraud” possess fifteen or more counterfeit or unauthorized access devices. Not use them. Not make purchases with them. Just possess them.

Think about what this means. If the Secret Service searches your place and finds fifteen stolen credit card numbers on your computer, you can be charged with federal access device fraud even if you never made a single fraudulent purchase. The possession of fifteen or more devices IS the crime.

Why fifteen? Congress set that threshold because they wanted to target organized fraud operations, not individual card thieves. Someone with fifteen or more card numbers is probly trafficking in them or planning large-scale fraud. But the effect is that hitting that number triggers federal felony charges regardless of whether any actual fraud occured.

The penalty for this? Up to ten years in federal prison for a first offense. And thats just for possession.

The Device Equipment Trap: Why Skimmers Carry Harsher Penalties

Heres something that shocks most defendants: possessing card-making equipment is punished MORE severely then possessing the cards themselves.

Under subsection (a)(4), its a federal crime to produce, traffic in, or possess “device-making equipment.” This includes card skimmers that capture data from magnetic stripes, re-encoders that write stolen data onto blank cards, embossing machines that put names and numbers on plastic, and any equipment “primarily used for making an access device or counterfeit access device.”

The penalty? Up to FIFTEEN years. Thats five years more then the penalty for possessing fifteen stolen cards.

Why the harsher penalty? Congress reasoned that someone with card-making equipment can produce unlimited counterfeit cards. There more dangerous to the financial system then someone who just has a handful of stolen numbers. But the practical effect is that getting caught with a skimmer or encoder puts you in a worse position then getting caught with the cards.

If you have both the equipment AND the cards, your facing charges under multiple subsections. And the sentences can stack.

How Secret Service Actually Builds These Cases

Let me be real with you about how these investigations actualy work, because understanding the governments methods matters for your defense.

Dark Web Operations

A huge percentage of federal credit card cases come from dark web investigations. The Secret Service runs undercover operations on carding forums – websites were stolen card data is bought and sold. There posing as buyers, as sellers, as forum administrators. There tracking cryptocurrency transactions. There building cases for months or years before making arrests.

If you bought card data online, theres a good chance the seller was either an undercover agent or a cooperating defendant whos already been caught. Either way, the government has records of every transaction you made.

Confidential Informants

Many access device cases start with someone whos already been arrested flipping on there associates. Someone gets caught with cards, faces fifteen years, and decides to cooperate in exchange for a reduced sentence. There now introducing undercover agents to there contacts, recording conversations, and building cases against everyone in there network.

If you got introduced to card suppliers or buyers through someone you thought was a friend, that person might already be working with the government.

Financial Institution Referrals

Banks and credit card companies have sophisticated fraud detection systems. When they see patterns suggesting organized fraud – multiple cards being used in the same locations, high-velocity transactions, known compromised card numbers – they refer cases to the Secret Service. By the time agents show up, they often already have transaction records, surveillance footage, and IP addresses.

Skimmer Discovery

Gas stations, ATMs, and point-of-sale terminals are regularly checked for skimmers. When a skimmer is discovered, investigators can often trace it back to who installed it through surveillance, fingerprints, or patterns in how the stolen data was used. These cases frequently expand to include everyone connected to the skimming operation.

The $1,000 Line: When State Becomes Federal

Not every credit card case ends up in federal court. State prosecutors handle plenty of fraud cases. So what makes the difference?

The statute requires that the offense “affect interstate or foreign commerce.” In practice, this is almost always satisfied because credit card transactions inherantly cross state lines – the card issuer, payment processor, and merchant are rarely all in the same state.

But federal prosecutors generaly dont bother with small cases. According to DOJ guidance, federal prosecution is directed particularly at organized crime activity and trafficking operations. Individual cardholders using expired or revoked cards usualy get prosecuted in state court.

The informal threshold is around $1,000 in fraud during any one-year period. Once losses exceed that amount, or once multiple states are affected, or once theres evidence of organized activity, the Secret Service and federal prosecutors get involved.

Subsection (a)(5) makes this explicit: using access devices from different issuers to obtain $1,000 or more in value during any one-year period is a fifteen-year felony.

Penalties Breakdown: What Your Actually Facing

The penalties under 18 USC 1029 depend on which subsection your charged under. This is critical to understand.

Ten-Year Maximum Subsections

Subsection (a)(1): Producing, using, or trafficking counterfeit access devices. Subsection (a)(2): Trafficking unauthorized access devices. Subsection (a)(3): Possessing fifteen or more counterfeit or unauthorized devices. Subsection (a)(6): Soliciting someone to offer an access device. Subsection (a)(7): Using access device fraudulently.

First offense maximum: ten years. Repeat offender: twenty years.

Fifteen-Year Maximum Subsections

Subsection (a)(4): Producing, trafficking, or possessing device-making equipment. Subsection (a)(5): Using devices from different issuers to obtain $1,000+ in value. Subsection (a)(8): Trafficking in mobile phone cloning equipment. Subsection (a)(9): Fraudulent use of credit card system access codes.

First offense maximum: fifteen years. Repeat offender: twenty years.

Additional Consequences

Beyond imprisonment, your facing fines up to $250,000, forfeiture of any devices and equipment, forfeiture of proceeds from the fraud, and court-ordered restitution to victims. If you made money from credit card fraud, the government is going to try to take it all back – and more.

Defenses That Actually Work

OK so your facing access device charges. What can you actualy do about it?

Lack of Intent to Defraud

Every subsection of 1029 requires “intent to defraud.” If you didnt intend to defraud anyone – if you possessed the devices for legitimate reasons, if you were researching security vulnerabilities, if you were testing fraud prevention systems with authorization – thats a defense.

This is narrower then it sounds. “I was just curious” probly wont work. But legitimate security researchers, fraud investigators, and authorized penetration testers have valid arguments here.

Lack of Knowledge

You have to “knowingly” possess unauthorized devices. If you genuinly didnt know the card numbers on your computer were stolen – if someone else put them there, if you recieved them without understanding what they were – you may have a defense.

This gets complicated when the evidence shows you bought devices from carding forums or recieved them in suspicious circumstances. But if you can show genuine ignorance, the knowledge element fails.

No Interstate Commerce

Federal jurisdiction requires the offense affect interstate or foreign commerce. If the transaction was entirely local – same state issuer, processor, and merchant – you might argue theres no federal jurisdiction. This is rare because credit card systems almost always cross state lines, but its worth examining.

Entrapment

With so many dark web sting operations, entrapment defenses come up regulary. If government agents induced you to commit a crime you werent otherwise predisposed to commit, you have an entrapment defense.

The key question is predisposition. If you were already looking to buy stolen cards and just happened to buy from an undercover agent, thats not entrapment. But if agents persuaded you to participate in fraud you wouldnt otherwise have committed, thats different.

Fourth Amendment Violations

Never consent to searches of your devices without a warrant. If investigators obtained evidence through illegal searches – no warrant, warrant exceeded its scope, coerced consent – that evidence may be suppressed. Many access device cases depend entirely on whats found on computers and phones. Without that evidence, the case falls apart.

The Sentencing Reality

Even if you cant beat the charges, understanding sentencing is crucial. Federal sentences for access device fraud depend heavely on loss amount, number of victims, sophistication of the scheme, your role in the operation, and criminal history.

The federal sentencing guidelines increase your offense level based on how much money was involved. Small losses might result in probation for first offenders. Large-scale carding operations with hundreds of thousands in losses can mean ten or more years even without maxing out the statutory penalty.

Acceptance of responsibility – pleading guilty and cooperating – typically reduces your guideline range. Cooperation with investigators can result in substantial assistance departures that further reduce sentences. But cooperation is complicated and should only be considered with expereinced counsel.

Related Charges They’ll Stack On

Access device charges almost never come alone. Federal prosecutors love stacking charges to maximize pressure for plea negotiations. Expect to see some combination of:

Wire fraud (18 USC 1343) for any transactions involving electronic communications. Identity theft (18 USC 1028) if you used personal information. Aggravated identity theft (18 USC 1028A) with its mandatory consecutive two years if real persons identities were used. Money laundering (18 USC 1956) if fraud proceeds were moved or spent. Conspiracy charges if you worked with others.

Each additional charge adds exposure and complexity. The government uses charge stacking as leverage – plead guilty to some charges, they’ll drop others. Fighting everything means risking conviction on everything.

Mistakes That Destroy Access Device Cases

Three things that will absolutley destroy your defense:

First, continuing to use devices after you know about the investigation. If you learn youre being investigated and keep using stolen cards, your making everything worse. Stop immediatley and get a lawyer.

Second, trying to destroy evidence. Wiping computers, breaking phones, deleting files after you know agents are coming – thats obstruction of justice, a seperate felony. The forensic evidence of deletion often survives anyway, and now your facing additional charges.

Third, talking to agents without a lawyer. The Secret Service is going to ask how you got the cards, who you work with, who else is involved. Every answer builds there case against you and your associates. Invoke your right to counsel immediatley.

What Happens Next: The Federal Process

If your charged with federal access device fraud, heres whats coming. Arrest and initial appearance first. Then detention hearing – the government will argue your a flight risk or danger, especially if theres evidence of ongoing fraud activity.

Discovery comes next. The government turns over there evidence – transaction records, surveillance, undercover communications, forensic analysis of your devices. This is were you see exactly what there working with.

Your attorney should immediatley analyze which subsection your charged under. Theres a big difference between facing ten years and facing fifteen years. The specific subsection shapes every aspect of defense strategy.

Plea negotiations are common. The government often has overwhelming evidence – transaction records, undercover purchases, your own communications. But the specific terms of any plea deal depend on the strength of there case and your leverage.

Choosing Your Defense Strategy

Your going to need to make hard decisions. Plead or fight? Cooperate or stay silent? These depend on the evidence, your criminal history, and your risk tolerance.

A good federal defense lawyer will analyze exactly which subsection your charged under, what evidence the government has, and were there case is weak. Nobody can garantee outcomes in federal court. But you can make informed decisions with the right information.

Access device cases are winnable. The intent element matters. The knowledge element matters. Constitutional violations happen. But you need expereinced counsel who understands how the Secret Service builds these cases and how to take them apart.

Time matters. The sooner your lawyer is reviewing the evidence and challenging the governments case, the better your chances of a good outcome.

Get help now.