Federal authorities are charging two Chinese nationals, one reportedly in the U.S. illegally and the other on asylum status, with possession of counterfeit and unauthorized access devices following a large-scale gift card fraud investigation.

The pair, according to authorities, were reportedly found to be in possession of more than 5,000 counterfeit gift cards during a traffic stop in Pelham on June 21.

Following the discovery, Zuejun Zheng, 48, and Jiadong Cao, 36, were arrested by Pelham police and later indicted by federal authorities. The men are accused of gift card tampering, a form of organized retail crime in which perpetrators steal gift cards from stores and alter the card to steal sensitive information.

The altered cards are then placed in a location where they can be purchased by customers who then load personal funds onto them, ultimately resulting in those same funds being stolen.

The investigation into Zheng and Cao began on June 20 after a CVS manager in the Hoover area observed the suspects swap approximately 25 gift cards from a store kiosk with outside ones they had allegedly brought into the store, according toWSFA 12 News.

The same employee saw the two departing in a gray Lexus SUV and gave Hoover police their tag number.

The next day, officers made the stop and took Zheng and Cao into custody after a city-wide Be on the Lookout alert had been issued. The pair is suspected of running a high-level gift card tampering operation that targeted major U.S. retailers, including Amazon, Home Depot, Nike, and Macy’s.

Zheng and Cao were also each charged on a state level with four counts of encoded data fraud. They remain in custody in the Shelby County Jail.

Austen Shipley is the News Director for Yellowhammer News. You can follow him on X @ShipleyAusten