A SECURITY loophole has cost one of Britain’s biggest supermarket groups thousands of pounds after European fraudsters targeted North-East superstores.

Gangs of travelling crooks used cloned credit cards at Sainsbury’s stores after discovering a flaw in the company’s chip and pin system.

The teams used cloned American Express credit cards that the supermarket’s security checks failed to pick up.

The fraudsters limited their purchases of goods and gift vouchers to about £100 a time.

Gift vouchers were sold on for cash.

Details of the fraud only emerged when a gang member was caught in Darlington in July.

Teesside Crown Court heard how a security guard at the store, in Victoria Road, became suspicious about the activities of Edvinas Masilionis.

The 20-year-old Lithuanian was filling his basket with gift vouchers when he was stopped. A search revealed he was carrying three cloned credit cards.

The cards were clones of genuine American Express cards belonging to customers in Germany and the US.

When they were checked, supermarket staff were amazed to discover that the fakes were not flagged up as suspicious.

The court heard that the scam was costing Sainsbury’s £12,000 a week in the North- East alone.

Although the group declined to comment last night, The Northern Echo understands the loophole has now been closed.

Jobless Masilionis had struck at least seven times in North Yorkshire the previous day, purchasing goods and gift vouchers worth £700 at stores in Scarborough, York and nearby.

The court heard that Masilionis arrived in the UK from Vilnus nearly three years ago with hopes of gaining legitimate employment.

After settling in London and finding work, he lost his job. With debts mounting, he was introduced to a man called Oleg.

Masilionis was given a batch of cloned credit cards and told to travel around and use them at supermarkets.

He had previous convictions for fraud as well as for putting cards in phone boxes advertising prostitutes.

Jim Withyman, mitigating, told Judge Peter Armstrong: “He was being used by others higher up the ladder and more sophisticated than him.”

Masilionis, from Ilford, London, admitted six counts of fraud and was given a community order with supervision and unpaid work.

Judge Armstrong said his good progress in prison on remand where he has gained a food safety qualification was impressive.

He said the fact Masilionis had spent four months in custody on remand meant he could spare him jail.

An American Express spokeswoman said: “Under our fraud protection guarantee, a card member who is unlucky enough to be a victim of fraud will not be held responsible for fraudulent charges.”