Prosecutors Look to Reclaim $560k Taken in Magic Store Credit Card Fraud

Prosecutors have put the wheels in motion in reclaiming over $560,000 the owner of a Medford magic trick shop obtained through fraudulent charges to one customer's credit card.

Harry Levy, the owner of Hank Lee's Magic Factory, pleaded guilty in March to charges of credit card fraud and issuing false statements after $561,927, then misled federal investigators looking into the charges, according to court filings.

On July 9, U.S. Assistant Attorney Veronica Lei filed a motion seeking an order of forfeiture in U.S. District Court in Boston. If the full balance stemming from the credit card fraud cannot be obtained in cash, the plea agreement between Levy and prosecutors allows the government to seek specific property owned by Levy as restitution.

The Magic Factory's store and website have remained open despite the charges against Levy. The store was established in 1975 in Boston before moving to Medford, and it has remained a staple in the magic community through online sales.

The victim was a wealthy Texas man who ordered regularly from the Magic Factory’s website, typically using his PayPal account. 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. Over a two year span, Levy regularly charged even though no orders were placed, according to court filings.

The charges went unnoticed until May 2011, when one of the victim's assistants spotted them while reviewing statements 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.

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. 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.

The credit card fraud charge carries up to a 15-year sentence and the false statements charge 5 years, but the plea agreement said prosecutors will be seeking the "low end" of sentencing guidelines. Levy is scheduled for sentencing on Sept. 6 at U.S. District Court in Boston. He is free on $2,000 bond pending sentencing.

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