Student Is Accused of Altering Credit Cards : Crime: Police arrest a 19-year-old Reseda man suspected of heading a fraud ring that changed the magnetic strips and rang up nearly $100,000 in illegal purchases.

A 19-year-old Reseda college student has been arrested on suspicion of heading a ring of thieves who used credit cards with altered magnetic strips to fraudulently make nearly $100,000 in purchases, police said Wednesday.

Ali Mojaddam was arrested Tuesday after police searched his apartment and found electronics equipment, clothing and other merchandise believed to have been purchased with altered credit cards, Detective Julio Nieves said. Also found by police was a home computer and an encoding device used to alter the magnetic coding on credit cards, he said.

Nieves said Mojaddam, a Pierce College student who was taking computer classes, worked at a shoe store in Northridge Fashion Center and used his position there to gain valid credit card numbers. He is also suspected of receiving numbers from friends who worked in the mall and other stores in the San Fernando Valley.

He then used his computer and encoder to put the valid numbers on the magnetic strips on the back of stolen cards or those belonging to himself and friends, the investigator said.

The cards were then used to make purchases, or Mojaddam sold them to associates for as much as $400, Nieves said.

Mojaddam was charged with illegally possessing equipment to alter credit cards and released on $5,000 bail. He is scheduled to enter a plea Sept. 11 in Van Nuys Municipal Court. A person who answered the telephone at his apartment Wednesday declined to comment on the arrest.

A 17-year-old friend of Mojaddam’s was arrested with him on the same charges and was released to his parents.

About 25 arrests have been made in the Valley this year for credit card fraud, investigators said. They believe that many of those arrested got cards from Mojaddam. Police were led to him by informants and received a warrant to search his home Tuesday.

“This was the main guy,” Nieves said. “He was selling a lot of credit cards.”

During a search of the apartment, Nieves said: “Mojaddam asked what I was looking for, and I said, ‘The guy who is doing all of this, who’s putting out the cards.’ He said, ‘You got him. I’m the guy.’ ”

Nieves said Mojaddam was riding the latest wave in credit card fraud, in which computerized encoders--which can be store-bought for $600--are used to alter credit cards. The encoders are used for many purposes including identification cards.

The magnetic strip on the back of a credit card is read by computerized cash registers when purchases are made. In the case allegedly involving Mojaddam, the altered card is offered for payment, and the purchase is billed to the number encoded on the strip.

The fraud could be noticed only if the cashier checks the number and name on the card against the information printed by computer on the receipt, Nieves said. They won’t match.

However, Nieves said, cashiers rarely check, and the fraud is usually not noticed until the purchase is billed to the cardholder who legitimately has the number.

The ultimate losers, Nieves said, are credit card companies, which worldwide this year have reported losses from encoding fraud of as high as $2 billion. Nieves said the encoding method has quickly become a popular method of credit card fraud.

“We have a whole slew people out there doing this,” he said.