OZAUKEE COUNTY, Wis. (CBS 58) -- A Chicago man is accused of being involved in a large-scale gift card scam investigators believe spanned several states including Wisconsin. 

Guangguo Zhu, 52, is charged with three counts of uttering a forgery, three counts of unauthorized use of an entity's identifying information or documents and one count of financial transaction card - forgery.

According to a criminal complaint, on Nov. 7, Grafton police were dispatched to a Walgreens on Wisconsin Avenue, for a fraud complaint. The manager told police a middle-aged Asian man entered the store and placed several forced/altered gift cards onto the gift card rack. 

Investigators believe the incident was a well-known gift card scam.

Here's how the scam works: 

The packaging for the gift cards is meticulously cut open and the gift card is removed. The parties then remove the “scratch off” coating to reveal the gift cards identification numbers. Once the numbers are documented, the identification number is covered back up and the gift card is reinserted into the packaging. Finally, the packaging is sealed. Once prepared and ready, the cards or re-stocked onto gift card racks, waiting for customers to purchase the gift cards. When purchased, the cards are loaded with funds and the scammers are able to obtain the money loaded onto the card. 

According to the complaint, Zhu was arrested following a traffic stop. Officers located two duffle bags filled with gift cards.

In total, Zhu had over 1,000 gift cards in his possession from the following retailers: 

• Visa
• Nike
• Apple
• Razor
• Macy's 
• Sephora
• Nordstrom
• Xbox
• Dick's Sporting Goods
• eBay
• Amazon
• Bath & Body Works
• Home Depot

Authorities confirmed in the past 30 days, Zhu's vehicle traveled to Green Bay, Appleton, Oshkosh, Sheboygan, South Bend and Indianapolis. 

Walgreens Corporate is reportedly aware of this scam and took older gift cards out of circulation.