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Barcode scams and fraud – don’t try this at home!

January 25, 2013

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In May of 2012 a software executive from Silicon Valley involved in a particularly large-scale case of barcode fraud made headlines. Thomas Langebach, who was the vice-president of the software giant SAP created fake barcodes to receive massive discounts on, of all things – Lego sets…

It seems Mr Langebach had a bit of a thing for Lego – when he was arrested by police on the 8th of May of 2012, hundreds of unopened boxes were found in his house. His manner of operating was quite simple – he created duplicate barcodes for cheaper Lego items and switched these with the barcodes on the more expensive boxes, getting a substantial discount. He then sold these Lego products on eBay for a nice profit. His total items sold through eBay was 2 100, earning him $30 000, although it appears not all of these items were Lego sets. Considering that Lego boxes range in value from around $15 to $279 dollars – the amount of effort and resources put in; and the fact that Mr Langenbach seemed to be making a comfortable living (his San Carlos home was worth an estimated $2 million), had police baffled.  

He operated his scam at Target stores in the Bay Area, where he was eventually caught, and later charged with four felony counts of second degree burglary. Lego is a popular and relatively expensive product, and Target therefore keeps close track of their inventory and investigates losses, such as on April 20th when Langenbach swapped the barcodes on two separate Lego sets – one worth $120 tagged with a $50 barcode and one worth $70 to $25. Investigators spotted him swapping the barcodes through security camera surveillance, and flyers were distributed to various Target stores in the area.He was eventually spotted walking into a Mountain View Target store on May 8th by a loss prevention officer, who alerted security staff to monitor him. Sure enough he was seen to switch another barcode and purchase a set of Legos at a discounted price. Security staff detained him and police later made the arrest. At the time ABC News reported that prosecutors found 32 fake barcodes in his car and many more in his house.

However Thomas Langenbach is by far not the first person to try this scheme. An Australian man, Edward Podolak, (featured in the photo on the left) from Victoria, was successful in swapping barcodes on various pieces of equipment from TV’s to fishing gear and portable hot water systems. He was eventually caught whilst attempting to buy a $700 coffee machine for only $30. In his case however the money was apparently sorely needed. A Serbian immigrant living in Indiana also created fake barcode labels for cheaper items and managed to steal $70 000 from a Lowe’s shop. His method was either to return the item for the full price refund, or to sell them on eBay.  Astonishingly he managed to keep this scam up for almost 10 years in around 1000 different shops across various States. However, once he was caught he was faced with possible deportation, and fifteen months in jail – for an average of only $7 000 a year.

Bizarrely, 38 year old Ashok Patel used fake barcodes to save the massive total of $20 on four bottles of mouthwash – for which he faced 20 weeks in prison – although he did have previous convictions including fraud and forgery, and had only recently come out of jail for a previous offense.

On a much larger scale were a ring of conspirators who operated in the Illinois, Texas, Ohio, Indiana and Pennsylvania areas. Led by Tommy Joe Tidwell of Dayton, Ohio, this ring managed to rake in more than $1 million using a UPC barcode scam in only one year. Tidwell produced the fake barcodes on his PC at home and also sold the items on eBay – his account there had glowing reviews and only 4 negative comments out of a total of 522. Local law enforcement and the FBI eventually managed to arrest him. He was sentenced to seven years behind bars.

In July of 2012 a mother from the UK was arrested for the same scheme – also targeting expensive toy products such as the Star Wars Lego sets. Barbara Aqueweque managed to pull the con off at three or four shops a day, spending around $80 dollars per day – but making around $1000 dollars a day selling them on eBay. She was found out via surveillance camera footage in April.


The moral of the story of course is that it is impossible to get away with this kind of fraud in the long run – not, of course, that any of our readers would even consider it, we’re quite sure! The barcoding system exists to make keeping retailer’s stock inventory correct so that the shopping process is simpler for all involved – and tampering with the system will always be noticed eventually, especially when almost every major retailer uses security cameras.  
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    Author

    Our blog researchers include local barcode experts from the SA Barcodes team: Cat Robinson and Andreas van Wyk

    SA Barcodes Team

    The aim of this page is to educate you, our customer, with all the information you may require about the different facets of barcodes and how they work.

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