The restaurant industry is rife with ways to lose profitability. Just when you think you have things buttoned up, a new twist comes along that can threaten your business and you may not even know about it. Last year the restaurant industry lost an estimated $200 million to a theft scheme called “skimming.” The cashier or server is equipped with a portable electronic device commonly known as a “skimmer” that can be easily be hidden in a pants pocket. When handling customer credit cards the employee swipes the card through the POS system to capture the sale and while still in possession of the customer’s card, swipes the card through the skimmer as well. The customer’s information contained on the magnetic stripe on the back of the card is captured in the device. The information is then typically sold or transferred to organized rings that produce counterfeit cards and rack up fraudulent charges.

Continue reading . . .

Four Romanian nationals have been arrested in connection with a multimillion-dollar scheme to remotely steal payment card data from the point-of-sale systems of more than 150 Subway restaurants and other U.S. businesses, according to the U.S. Department of Justice.

The indictment, unsealed on Wednesday, charges the four with conspiracy to commit computer fraud, wire fraud and access device fraud.

The DOJ claims that the thieves got their hands on the credit, gift and debit card data of more than 80,000 customers.

Continue reading . . .

A Seattle grand jury has indicted a Maryland man accused of hacking into the credit card systems of several Seattle businesses and using stolen funds to fuel his heroin addiction.

Currently in inpatient treatment for drug addition, 20-year-old Christopher A. Schroebel is facing federal hacking charges related to a string of high-tech thefts from Seattle restaurant-goers.

Federal prosecutors in Seattle contend Schroebel was selling credit card information through an online black market while also using the cards himself. A search of computer equipment tied to him allegedly uncovered information stolen from 4,800 credit cards, as well as dozens of malicious software programs meant to enable theft.

Continue reading . . .

Russian scam artists have created a smorgasbord of headaches for restaurants both locally and nationally, hacking into a popular supplier’s computers and stealing up to 300,000 eateries’ credit-card numbers.

“It hasn’t been fun for us, and it hasn’t been fun for our customers,” said Richard Kirschner of New York-based Restaurant Depot, a wholesale chain that has Everett and Needham outlets.

Restaurant Depot believes hackers stole information from as many as 300,000 people who shopped at the chain between Sept. 21 and Nov. 18 — including some 9,100 Massachusetts customers.

Continue reading . . .

More than two dozen current and former waiters and their associates from some of the city’s top steakhouses have been arrested in an alleged identity theft ring, accused of stealing credit card numbers from wealthy customers, authorities said Friday.

The Manhattan district attorney, police and the U.S. Secret Service announced the arrests Friday involving a 28-person ring that operated at top metro-area restaurants like Smith & Wollensky, Capital Grille and Wolfgang Steak, as well as Morton’s in Stamford, Conn. and the Bicycle Club in New Jersey.

The alleged scam targeted customers who often paid with American Express Black cards and other high-limit credit cards.

Continue reading . . .

At least nine customers at the Port Richey Mugs N Jugs fell victim to a credit card skimming waitress, according to Pasco County Sheriff’s Detectives.

“We do have more victims, we’re working on locating them,” said Detective John Suess. He’s encouraging anyone who went to the restaurant to take a close look at their credit card accounts to see if there are fraudulent charges.

The case is centered on 25-year-old waitress, Kathryn Shana’e Perez.

It’s believed she used the tiny skimming device between May 30 and June 23.

Detectives say her cousin, 25-year old Brandon Quillen gave her the skimmer so he could use the information she ripped off from her customers to make new credit cards.

Continue reading . . .

Scammers are targeting Ottawa, Canada eateries with a familiar scam. They are posing as fake health inspectors and threatening the restaurant owners into calling a phone number and entering a code. This code creates a Craigslist account, which the scammers then use to sell stolen or non-existent merchandise. Restaurants should check with a local health department if this happens to them.

The world’s largest coffee chain, Starbucks, may have never appeared to be struggling. The book recently written by Howard Schultz, the CEO of the company, reveals how he came back in 2008 to save the chain as it slowly began to sink. Due to his careful actions and constant diligence the chain never dropped below 16,000 locations and is now growing again.

Roark Capital Group now owns bustling and popular chains like Corner Bakery and Arby’s after a number of buyouts last week. However, the large company is not yet satisfied and is looking again for new purchases. The company only employs 38 staffers, but the group owns over 25 companies of the 38 total that it has purchased.

The National Restaurant Association is taking on the U.S. Department of Treasury and the Internal Revenue Service again for restaurant owners everywhere. The association submitted their suggestions this week on how the new health care regulations should be defined. Requiring small franchisee and single restaurant owners to buy health insurance plans for part-time employees could ruin the industry.

Chipotle Mexican Grill isn’t taking any chances in the current on-going criminal investigation by the Immigration and Customs Enforcement agency. The chain has hired a team of top corporate lawyers from Washington, D.C. to defend the company if any charges are pressed. Early findings have shown the hiring of undocumented workers at Chipotle locations in Virginia and Minnesota.

The unique and signature colors, inviting atmosphere and exciting panini menu of Panera Bread were all developed in the Utica, New York area by resident Scott Davis. Davis is the chief concept officer for the chain and is responsible for creating the complete brand image of Panera Bread. He makes decisions about the exact colors used in counter tops and how sandwiches are named.

Boundless Enterprises, the corporation behind the popular Scooter’s Coffeehouse chain, is currently developing a new self-serve frozen yogurt concept. The chain will be called “Yoji Frozen Yogurt” and will be the company’s second brand. The new concept will be added to existing Scooter’s Coffeehouse locations for testing first.

Labor disagreements in the professional football industry have led to the stalling of the current season. Buffalo Wild Wings is the home of football fans, so the restaurant chain has sent a letter on behalf of the “Save Our Season” movement. If the season kicks off again by July 20^th, anyone who has signed their petition will receive a free six piece wing deal.

Abilene will soon be home to another Dickey’s Barbecue Pit location as the country’s largest barbecue chain continues to grow its numbers. As one of many locations in development or opening this year, the Abilene store will celebrate its grand opening with door prizes and a $1 barbeque sandwich. This location is being opened by Dwain Carpenter.

Dickey’s Barbecue Pit will also be coming to airports around the country soon if the chain has its way. The Dallas-Fort Worth International Airport is home to one popular location, and the chain is discussing new agreements with other international airports. The one airport location is full sized and offers the same menu as every other location.

Several Ottawa restaurants have been targeted by scammers posing as health inspectors.

In a typical fraud, the phoney official contacts a restaurant and solicits sensitive banking and financial information about the business. Sometimes they threaten a restaurant with fines if the manager doesn’t call a given phone number and enter particular codes. In other variations, an eatery manager is told to expect an automated call and to dial a code when it comes.

The scammer uses the information and phone confirmations to set up fake sales on online sites like eBay, Craigslist and Kijiji from which they pocket the cash and never supply any goods.

Continue reading . . .

An old restaurant scam is making the rounds among restaurants across the nation in a new format. Restaurants are receiving large orders of 100 or more servings of food, with payment through a scammed credit card number. The restaurant is also requested to refund a overage to the customer through mail or wire transfer, and the establishment is left holding the bill when the credit card turns out to be faked.

Independent restaurant consultant Aaron Allen has released his new report entitled the “Top 50 Menu Engineering and Design Tips”. The list contains 50 different ideas and recommendations for making your restaurant’s menu as clear, appealing and exciting as possible. Allen’s firm included research on how the eye processes information according to color, flow and arrangement on a menu page.

The National Immigrations and Customs Enforcement Department is currently conducting interviews and investigations at over 30 national Chipotle Mexican Grill locations. The chain may have hired illegal immigrants without the right to work in the United States. No conclusive findings have been announced, and the chain is complying fully with the investigation.

Restaurants are cashing in on the popularity of social media by letting users access their menu digitally on iPads and Smart Phones instead of paper menus. Guests are also encouraged to Tweet their location and meal choices to friends and family, or check in through FourSquare. Even high end restaurants like The Carlton are using iPads for their constantly changing wine list.

A 20 year old student was struck and killed by a drunk driver in New York, and the state’s laws have found Dave & Buster’s accountable for over-serving the driver. The driver’s blood alcohol level was nearly 3 times as high as the legal limit. Dave and Buster’s will pay a $1.5 million dollar settlement to the parents of the deceased student.

Nick Vojnovic may not be the President of the Beef O’Bradys’ parent company any longer, but he is investing in a new chain that may take off soon. The Little Greek Restaurant chain is still small but wants to make the gyro part of the American fast casual dining scene. He has invested in three locations in Texas and Arizona.

The Miami International Airport now has a new bar and grill location as the Shula’s Bar&Grill has finally opened. Named after the NFL Hall of Fame coach Don Shula, the bar and grill serves a full menu of tavern fare like grilled burgers and appetizers. A full beer and wine list complement the food options. The restaurant is located just past the security check point in the main concourse.

Maggiano’s Little Italy is running their eight annual Eat-A-Dish for Make-A-Wish fundraiser from now until the end of June.  Six special menu items will add $1 to the total donation from the chain to the charity, and patrons can also purchase paper stars to donate $1. The chain hopes to donate funding for at least two wishes for each of their 44 locations.

A restaurant phone scam that has been making its way around the country over the past couple of years is making its way to restaurants through email.

Typically, the phone scammers will call a restaurant using the TTY (teletypewriter) relay service for those who are deaf, hard of hearing or unable to speak.  The scammer will claim to have a hearing impairment in an attempt to explain the use of the TTY service and to build sympathy.

The scammer will then ask to place a large order for food, to be paid by credit card.  For example, orders have included 150 chicken sandwiches, 250 Caesar salads, 250 pulled pork sandwiches, 200 fajitas, and more.  The scammer will get a total price from the restaurant, sometimes up to thousands of dollars, then he will ask to have an extra charge added to the total in order to pay for delivery.  He will then ask for the difference to be mailed or wired to him.

It may sound too good to be true for most restaurant operators, but tough economic times sometimes clouds judgment, and many have been taken in by this scam.  The harsh reality becomes clear when the credit card used to pay for the order turns out to be stolen.  One Boulder caterer lost over $4,700 in this scam.

The scam is working its way through email, now.  Following is an example that we received recently:

“HELLO…..
 MY NAME IS (removed) I WILL LIKE YOU TO KNOW THAT ITS BECAUSE OF MY HEARING IMPAIRED CONDITION LEAD ME HERE REGARDING MY EMAIL, I HAVE A BIRTHDAY COMING UP ON THE 10TH OF May 2011 AND I HAVE SOME IN-LAWS COMING,SO I WILL NEED SOME (Grilled chicken salad ) FOR ABOUT 120 GUESTS THAT ARE COMING SO CAN I GET THE PRICE PER PERSON AND THE TOTAL  PRICE FOR THE PEOPLE TO FEED INDIVIDUAL BOXES  NOW SO I CAN GIVE YOU THE CARD TO CHARGE THROUGH SO CAN YOU  MAKE IT FOR ME ON THE THAT DATE AROUND 3PM  THE ORDER WILL BE PICK UP BY MY PRIVATE SHIPPER AND I ALSO WANT YOU TO GET BACK TO ME WITH THE TYPE OF CREDIT CARD YOU DO ACCEPT AND I WILL ALSO LIKE YOU TO GET BACK TO ME WITH YOUR RESTAURANT ADDRESS AND ALSO YOUR DIRECT NUMBER AND ALSO YOUR RESTAURANT FAX NUMBER SO THAT I CAN BE ABLE TO FORWARD THAT TO THE SHIPPER OKAY BYE FOR NOW STAY BLESS.”

UPDATE

The following email was forwarded to us by a reader after this article was published.  It’s a variation on the scam email above.

“Hello this is (name removed),i will like to know if u can be able to make for 250 peoples on the 10th of MAY and it will be pick up in your store by 3pm am going to make the payment  with my credit card and the order is for my son wedding is coming up on the10th of MAY so i will like to order for Grilled Chicken and Chicken Salad for 250 guest or you can also get me your food meun,and it will be picked up by private shipper service between 3pm on 10th of MAY ,so i can give you my credit card to charge for the payment so let me have the price per person now and the total price altogether now and do u sure you can have it ready for pick up by 3pm and i will like to know if you have handle this type of large order before in your company i will look forward to hear back from you with your full name and store address and phone number and do you accpet all major of credit card for payment, i can be able to forward it to the shipper that will come for the pick up.”

Restaurant owners and operators are asked to be vigilant.  Any unusually large orders via phone or email should only be finalized with the customer in person, after verifying their identity.

The Wisconsin Better Business Bureau is warning restaurants and catering companies to beware of scammers using the TTY relay system to place orders for Packers’ Super Bowl parties.

Over the weekend, a restaurant in Oak Creek received a large order for food to be delivered during a Super Bowl party. The customer used the TTY relay system, a system which enables hearing impaired people to use a telephone with the help of a relay operator. The customer wanted to use a credit card to pay for the order and told the owner that, since the delivery company the customer was using didn’t accept credit cards, the restaurant would need to pay the deliverer in cash but would be reimbursed by adding the charges to the customer’s credit card.

Continue reading . . .

‘Adam” is a waiter’s nightmare. The 35-year-old accountant, who lives in Brooklyn and asked that his real name not be used, has been known to skip out on the check at restaurants. Once he and three friends racked up a $300 tab at B.B. King’s in Times Square, then stepped outside for a cigarette. It wasn’t until they saw a pedicab passing by that they decided the night’s bill would be on the house. Explaining his occasional adventures in the criminal world, Adam shrugs and says, “Sometimes you’re drunk or, I don’t know . . . ”

Eating in a restaurant and leaving without paying the tab — known in police parlance as “theft of service” — rose almost 20 percent in the city last year, up from 315 arrests in 2009 to 376 in 2010, according to the NYPD. Of course, those numbers don’t include the many scofflaws who successfully “lick and split.”

According to industry vets, it’s frequently older, professional-looking types who are breaking for the border — whether for the thrill of getting something for free or simply because of an overblown sense of entitlement.

Continue reading . . .

“A dirty con man with an appetite for fraud,” reports the New York Post, “is cleaning up at the expense of Manhattan restaurant owners—and federal agents want to serve him his just desserts.”

Admittedly, it’s a pretty clever scam. The bunko artist, who operates under the assumed name of James Maffia, sent a letter to the Upper East Side restaurant Sistina claiming that a waiter had spilled coffee on him during a meal there and that he was now asking the restaurant to cover his cleaning bill of $38.50. On its face the demand seems reasonable, since “Maffia” was not seeking damages related to medical costs.

Continue reading . . .

When a Spartanburg County restaurant owner got an order for 300 meals, he was excited, but quickly learned it was too good to be true.

Dimitri Kakouras, who owns Grapevine Restaurant in Boiling Springs, got a phone call Monday asking the price for 300 meals. He said the call came in from a third-party service like one used for the hearing-impaired. He was talking to a woman who was communicating for a man who talking through a computer.

Kakouras said he gave the price and the customer said he would get back to him if it his company was fine with it. About two hours later, the customer called back, through the third-party system, confirmed the order and gave the number of a Discover credit card.

Continue reading . . .

The N.C. Division of Environmental Health is warning restaurant owners to be careful of a scam targeting food service establishments.

State officials say restaurateurs have reported receiving calls from people claiming to be health inspectors or other government officials who tell the business owners of a new inspection procedure.

The phony “government official” provides a numeric code and instructs the restaurant operator to provide this confirmation code when prompted during an automated call or give the code to a health inspector who is scheduled to visit the restaurant. The caller then says that the health inspector will visit the food service establishment the next day between 11 a.m. and 1 p.m., or a similar time-frame.

Continue reading . . .

A group of pranksters picked the wrong restaurant.

One of the waiters was a former track star. He also showed no fear.

He saw three men leaving a Buffalo Wild Wings in Skokie, Ill., one night last week and he chased after them.

They pulled away in an SUV, but the waiter jumped on the vehicle and held onto the roof rack. He clinged to the passenger side even after the driver pulled into traffic and ran a red light. The passengers kept trying to hit the man so he would let go and fall onto the street.

Continue reading . . .

A person posing as a food inspector unsuccessfully tried to get a Howard County restaurant operator release sensitive information over the weekend, the latest instance in a series of similar incidents around the country in recent months, county health officials said.

Saturday, the restaurant operator got a call from someone posing as a county health inspector who said the Health Department wanted to schedule an emergency food inspection at a specific date and time. The restaurateur was asked for detailed personal and business information, and when she questioned that, was given a telephone number to call to get a special code number and was then told to call back.

Continue reading . . .

Area restaurant owners are being warned to beware of an apparent scam by someone falsely claiming to be a food inspector, according to a spokesman for the Iowa Department of Inspections and Appeals.

We don’t want anybody to get stung by a scam,” said David Werning, public  information officer for the IDIA.

He said employees at Wok N Roll in Mason City reported receiving a call Wednesday from someone claiming to be a food inspector. He wanted to schedule an inspection for the following day, but needed the employee to make a call on his own phone to obtain some information first.

Continue reading . . .

An Auburn couple has been arrested for allegedly trying to extort a restaurant over an order of take-out.

The Auburn Police Department says 39-year-old Larry Warren Bosworth and 36-year-old Rebecca Lynn Bosworth conspired to force a Chinese restaurant to pay them in order to keep their claims of finding a cockroach in their food quiet.

The Bosworths allegedly told the owner of the restaurant they would not file a report with the Department of Health and Human Services or contact local media outlets if they received a large payment of cash.

Continue reading . . .

He ate buffalo wings and drank nine Blue Moon drafts at Burke’s Cafe. At Shucker’s, he washed down a pound of steamed shrimp with three glasses of Tanqueray Gin, two Coronas, a Heineken and a Johnny Walker Black Label scotch.

Day after day, year after year, Andrew Palmer dined at restaurants all over Baltimore and beyond, including Anne Arundel, Baltimore and St. Mary’s counties. He even traveled as far south as Florida and sampled restaurants there.

His tastes ran the gamut: a Chinese joint in Fells Point one day, the upscale Capital Grille at the Inner Harbor another.

Palmer ate modestly and drank aggressively. Restaurant managers described the 43-year-old as shabbily dressed but cordial and relaxed. He didn’t tip. Worse: He didn’t pay. To escape his bill, which was usually under $100, police said, he frequently feigned a seizure, was rushed to the hospital and then taken to a jail cell.

Continue reading . . .

The scam sounded plausible at first. Who wouldn’t want 250 caesar salads?

Things didn’t get suspicious until the anonymous caller asked to overpay the bill by $1,100 — supposedly for the delivery service — and have the difference sent to Texas by Western Union.

That’s when the general manager of the Rocket Shop Cafe on South Union Avenue called off the order.

But orders continued to come in by phone for payment by credit card over the last few months. Next it was 250 chicken sandwiches with fries. As recently as this week there was an order for pulled-pork sandwiches with chips for 250 people.

The restaurant’s general manager, Michael Harmon, quit taking the orders for what the caller said were large events in town. The requests just didn’t make sense.

Continue reading . . .

Restaurants in Minnesota and North Dakota are being targeted by scammers, according to the Better Business Bureau (BBB).

Two restaurants in the Twin Cities reported the scam to the BBB recently. According to the reports, the scammers use the Telecommunications Relay Service to place a call to a restaurant and place a large delivery order. The Telecommunications Relay is a service that helps people with speech or hearing disabilities to receive and make phone calls.

The con artists offer to pay for the order with a credit card. They usually ask to overpay and have the extra cash wired back to them, said the victims. The BBB said the credit cards are discovered to be stolen and the business looses the order funds as well are the money wired to the scammers.

The Better Business Bureau asks any business with concerns about a potential scam to contact them at 651-699-1111 or toll-free at 800-646-6222.

Source

An Appleton woman’s attempt to extort $500,000 from an upscale Grand Chute restaurant was “crazy and outlandish” her defense attorney said Friday at her sentencing.

Debbie Miller will spend nine months in jail and four years on probation instead of collecting hush money after planting a rat in her lunch.

Miller, 41, was sentenced in Outagamie County Court for the 2008 incident at The Seasons.

She pleaded no contest in January to a felony extortion charge and a misdemeanor for obstructing police. She planted the dead animal in her food on April 17, 2008, before asking for the money in exchange for keeping quiet about the incident. She threatened to alert the media if the money wasn’t paid.

Police arrested Miller nearly three months later following an investigation conducted by the restaurant’s insurance company.

Continue reading . . .

The Cumberland County Sheriff’s Office and the Maine Restaurant Association say someone has been calling Maine restaurants, trying to scam them out of money by saying that an employee has been arrested.

The caller claims to be a bail bondsman and says the employee got in a fight with her boyfriend, drove drunk, got in an accident and was arrested for OUI. The caller says the employee is too drunk to come to the phone. The caller then tells the person at the restaurant to wire money to a special account through Walmart to bail the employee out.

Continue reading . . .

Boulder police are investigating an attempted catering scam that could have bilked one Boulder business out of nearly $1,000 and tricked its employees into making 150 chicken sandwiches for nothing, according to Boulder police spokeswoman Sarah Huntley. 
   
The owner of Café Blue, 5280 Spine Road, told police on Saturday that his business had received a call about 3:50 p.m. from a person wanting to place an order for 150 chicken sandwiches, Huntley said. The caller, who was speaking through a language-translation line, said a delivery person would pick up the sandwiches later in the week.
   
The cost of the sandwiches was $1,080, and the caller asked the restaurant to charge a credit card for $2,000 and then mail a check for the difference to the delivery person who was going to pick up the food, Huntley said. 
   
The Café Blue manager told the caller, “This sounds like a scam,” and the caller hung up, Huntley said. The manager called police because he recalled hearing about another Boulder business that had been scammed the same way.
 
In late July of last year, Chez Thuy, 2655 28th St., reported losing $4,750 in the catering scam.      
In that case, a restaurant manager received a call from a hearing-impaired person who wanted to place a large food order for a wedding. The caller asked if the restaurant could pay a local delivery company on their behalf, because the delivery company wasn’t able to process credit cards. The caller said he would add whatever the restaurant paid for delivery into the total payment for the catering job, according to police.

Continue reading . . .

An attempted larceny via credit card at Back Street Restaurant, 22 Center Street, was reported on Friday, March 5.

The owner of the restaurant received a phone call at the restaurant from a man who identified himself as James Fish through a deaf relay service, police said. He ordered 265 chicken Caesar salads, totaling $1,500, to be ready for pickup at 3 p.m. on March 15, police said.

Fish then requested that an additional $975 be charged to his credit card, bringing the total to $2,475. He provided a MasterCard number, and the purchase was approved and went through, police said.

The caller than asked if the $975 could be wired by Western Union to a residence in Fortuna, California. After that request, the owner became suspicious, hung up the phone, and called police.

Police believe the credit card was stolen and hadn’t been reported yet.

Source

Someone representing themselves as a police officer tricked a manager at the Famous Dave’s restaurant in Kochville Township to wire $700 to an account in California to bail out a restaurant employee, Saginaw County sheriff’s Detective Sgt. Randy F. Pfau says.

The detective said someone called the restaurant, 5665 Bay, about 5:30 p.m. Sunday and identified themselves as “Sgt. Cooper,” Pfau said. The caller gave the manager the name of an employee who works at the restaurant and said the employee was in jail and needed $700 to make bail, he said.

The manager went across Bay to Walmart and wired $700 to a Western Union account in California, Pfau said. The called said the bonding agent the supposed employee was using was based in California, Pfau said.

Shortly after wiring the money, the manager realized the employee was not incarcerated, Pfau said.

Continue reading . . .

A Michigan company doing business as Kentucky Labor Law Poster Service, The Mandatory Poster Agency, The Labor Law Poster Service and other names released a written rebuttal to claims against it made recently by a Radcliff restaurateur.

Kim Dennis, owner of Lee’s Famous Recipe Chicken in Radcliff, reported last week that the poster service — which sells employee rights posters to workplaces – tried to convince her to pay for a $67.25 set of posters that she’d not ordered.

Dennis contacted The News-Enterprise and Radcliff police about the unordered shipment being mailed to her restaurant after reading an alert by Kentucky’s Labor Cabinet that similar poster companies had been conning employers into paying for workplace posters that state and federal governments offer for free.

After refusing to speak by phone Thursday, the Lansing, Mich., poster company submitted its answers to allegations that it was part of any scam similar to what Dennis and state labor officials reported.

Continue reading . . .