Most recent: Hearing Scheduled in 'Magic Factory' Fraud Case
The owner of a magic store in Medford is charged with credit card fraud and making false statements to authorties after he tried to pull off a $500,000 trick on one of his customers, according to court filings.
Harry P. Levy, the owner of Hank Lee's Magic Factory, admitted he made 134 false transactions between 2009 to 2011 on a customer's American Express card totaling $561,927, according to a stipulation of facts signed by Levy and prosecutors. The document was filed in Federal Court in Boston Friday.
The store's website was still operational as of Friday evening.
Levy, a Lexington resident, regularly lied to investigators as they looked into the credit card charges last year, the filing said. He also claimed other people were defrauding the victim, the filing said.
The victim was a Texas man who ordered regularly online from the Magic Factory, typically using his PayPal account, according to a U.S. Attorney press release. But in 2009, he made a transaction with his American Express card by entering his account information in the store's website, according to prosecutors.
One of the victim's assistants spotted the unauthorized charges while reviewing his finances in May 2011, according to court documents. The victim checked his account with the Magic Factory, but only his legitimate purchases appeared, court documents said.
Levy told the victim the unauthorized charges paid for foreign orders and showed him invoices with Vietnam shipping addresses, according to the filing. But those invoices were false.
"In fact, the charges had been made by (Levy) personally," the filing said. "They had not been made in response to foreign orders."
Even the items the victim legitimately ordered with his credit card were never received, according to the filing.
When federal investigators sat down with Levy in September 2011, he blamed the fraud on other people defrauding the victim, and the victim himself, according to the filing.
"(He) didn't look at his American Express bill for more than two years," Levy told investigators. "People were using his cards."
He also claimed he shipped orders submitted by the victim all over the world, prosecutors said. Levy told investigators he continued to take the orders, but eventually stopped shipping them because he "thought something was up," according to the court filing.
Levy was ordered to provide investigators with files related to the charges, but he gave them logs that were "not comprehendable by a human," the filing said, and did not provide any specific information.
Levy also told falsely told investigators he wrote to the victim to tell him someone was using his credit card, prosecutors allege.
After several more interviews and a visit to his store, investigators obtained a search warrant for the Magic Factory and found files that showed Levy falsified invoices, the filing said.
Levy has agreed to plead guilty to credit card fraud and making false statements, and in exchange prosecutors won't charge him with wire fraud or aggravated identity theft, according to a plea agreement. Levy faces a total of up to 20 years in prison on the charges.
Prosecutors will seek a sentence at the "low end of sentencing guidelines," and to have Levy ordered to pay resititution to the victim, according to the plea agreement.
No further court dates for Levy have been set, according to a federal court online docket.
UPDATE: Read the court filings in this case for yourself,