Restaurant owner charged in credit card scam

SAN FRANCISCO, Nov. 9, 2007 (KGO) (KGO) -- Authorities have finally tracked down a Bay Area restaurant owner accused of running a credit card scam. The ABC7 News I-Team caught up with him nine months ago. He didn't like it, so he took off running.

We showed you how Phau Lam was still billing his former customers' credit cards, months after the restaurant had shut down. Authorities now say the scam was even bigger than we first reported.

Fifty-one-year-old Phau Lam is in San Francisco County Jail, charged with 32 counts -- all felonies -- in a credit card scam.

District Attorney Kamala Harris says this is one of the most severe cases of identity theft she's ever seen.

"It's one of the most serious because of the fact it's a merchant that is committing the theft and that it was a repeat offense, so it was not just one situation where the identity was stolen for the use of one charge," says S.F. District Attorney Kamala Harris.

"It's a scam, it's a crime, and he has to be in jail. That's it. He has to be in jail," says Irene Bartholomew, a victim.

The case began last February when Irene Bartholomew called the I-Team, complaining she found a $175 dollar charge from Home Menu Restaurant, almost a year after it closed.

We went to the restaurant with Irene and confronted owner Phau Lam.

Dan Noyes: "What's going on here? What happened?"

Phau Lam: "I don't know."

Dan Noyes: "Why did you bill her ATM card?"

Phau Lam: "I don't bill that."

Dan Noyes: "You didn't bill that? Well, who did?"

Phau Lam: "No, I don't know."

Dan Noyes: "Oh, come on."

Phau Lam: "No, I don't want to take a picture."

Lam didn't want to answer any questions about his business. He led us through the back of the restaurant and out the loading dock.

Dan Noyes: "You aren't even selling food and you're billing their credit cards? Mr. Lam."

He took off and kept running until he was out of sight. Lam left the doors to his restaurant wide open. He was not ready for business. We found no food on the shelves, but two cash registers and three credit card machines were powered up and ready for action.

Dan Noyes: "Oh, this is a new receipt."

In all, we tracked down 15 people who said they had fraudulent charges from Home Menu or another restaurant Lam was preparing to open, "Asia Taste." All of the bills were for much more than you would expect to pay for a meal at a Chinese restaurant -- $145, $218, $475, up to $935.

"Had he been successful, it would have totaled, you know, easily, I don't know, $1,200 or so," says Van Dyke Roth, a victim.

The prosecutors say Lam racked up more than $50,000 in charges from about 100 victims. The company that issues those credit card machines had flagged Lam for fraudulent charges. So, prosecutors say he used other people's names and phony addresses -- including streets in San Francisco that don't exist -- to get more machines and continue the scam.

"We should all try and make sure we are not being victimized by checking those monthly statements, and just being diligent in that way," says Harris.

Phau Lam's public defender would not comment for this story. Police picked up Lam yesterday while he was trying to get a visa. He had a trip overseas planned for next week. Prosecutors say he is a flight risk. His bail is set at $300,000.

Previous reports:

>> Authorities Investigate Restaurant Owner
>> Owner Suspected In Credit Card Scheme

Have a tip on this or another investigation? E-mail the ABC7 I-Team or call 1-888-40-I-TEAM.

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