For Law Enforcement Agencies
Why should my agency work with ERAD?
If your agency wants to stop payment card fraud in its tracks and prosecute more criminals, ERAD can help. We work with law enforcement agencies to thwart identity theft, fraud, money laundering and other crimes tied to credit, debit and prepaid cards. Our cutting-edge platform gives agents the power to read cards and freeze and seize funds associated with illegal or illicit activities—all in a matter of seconds. We also give Law enforcement agencies the ability to seize funds from cryptocurrency wallets and peer-to-peer cash applications.
Using payment industry card reading devices and our patented ERAD software, law enforcement agencies can easily investigate credit cards found during a search or arrest. Without ERAD, investigating cards to identify concealed crimes is difficult and time consuming.
Like other cloud-based subscription software solutions, the ERAD platform is easy to implement for each sworn officer and is accessible on mobile or PC devices.
We currently serve hundreds of federal, state and local agencies across more than 40 states. Want to add your agency to that lengthy list? Call 571-207-ERAD (3723) or email us.
What's a prepaid card?
Unlike a debit card, a prepaid card is not linked to a bank account. Instead, you load money onto the card in advance and can spend it at almost any location in the world. The cards can be loaded or reloaded at almost any store or online through a website such as PayPal or Moneygram. Some prepaid cards also allow for direct deposit of payroll funds and tax refunds.
Why are criminals using these cards instead of cash?
Because they’re an easier, safer way to move and conceal large sums of money. Using an inexpensive magnetic stripe reader/writer, a criminal can encode the account information from a stolen payment card onto practically any card with a magnetic stripe in less than a minute. These can be prepaid cash cards or gift cards – or even hotel key cards, driver’s licenses, and subway passes.
How much money can be put on a prepaid cash card?
While most legitimate prepaid cash card program managers and issuers will not allow a prepaid cash card account to hold more than $10,000 – $15,000, there are programs outside the U.S. that allow higher balances. A recent case involving more than 3,000 prepaid cards included several cards loaded with more than $1 million and one with more than $5 million.
How can law enforcement officers tell the difference between a legitimate prepaid card and one being used to hide criminal funds?
Using ERAD, an officer can swipe any credit, debit or prepaid card to see if the information on the magnetic stripe matches the cardholder name, card number and financial institution issuer printed on the card, as well as determine the cash balance. This information will allow the officer to determine whether or not the card is legitimate.
If an officer identifies suspicious prepaid cards, ERAD makes it possible to temporarily freeze the balance, secure the funds in a law enforcement bank account and document them as evidence for trial.
Isn’t looking at the information on a prepaid card unconstitutional?
The magnetic stripe on a card contains the same information as what’s visible on the front of the card: name, card number, expiration date, and issuer information. A prepaid card stripe also contains the balance. ERAD security technology prevents law enforcement from gathering personally identifying information (PII), such as addresses and bank account information. Multiple courts have ruled that there is no expectation of privacy in the magnetic stripe of a payment card because the cards are already used as a method of financial exchange. In other words, when a law enforcement officer swipes a card as part of a reasonable search, it’s no different – and no more invasive – than a retail clerk doing the same thing. (US v. Benjamin, 2014 WL 5431349, D.Neb. 14 and US v. Alabi, 934 F. Supp. 2d 1201 (D.N.M. 2013)
The 5th Circuit Court of Appeals ruled in 2016 that reading data on a magnetic stripe is not a search.
The 6th Circuit Court of Appeals ruled that law enforcement officials can legally read the information on a card’s magnetic stripe because it should only contain the same information that is already visible on the front of the card.
The 8th Circuit Court of Appeals recently ruled for similar reasons that swiping or scanning a payment card is not a Fourth Amendment search and therefore doesn’t require a warrant.
Can law enforcement seize money from applications like Venmo, Cash App and PayPal using ERAD?
Law Enforcement can seize money from peer-to-peer payment applications using the ERAD system if the agency has the legal authority and ability to access the application and a seizure is appropriate. Criminals can connect prepaid cards to cash application accounts and are doing so more frequently to transmit money associated with crimes such as drug and human trafficking and other scams targeting consumers.
Can law enforcement seize money from cryptocurrency wallets using ERAD?
Once law enforcement has access to the cryptocurrency wallet and established legal authority, the Bitcoin or other cryptocurrency can be transferred to either a department or ERAD wallet to preserve the currency following digital evidence handling protocols. The currency will remain stored in its digital currency form until the completion of a case. The final step is ERAD uses a cryptocurrency clearing and settlement processor and converts the cryptocurrency into fiat that is then transferred into the LEA designated bank account.