RIVERDALE — A Weber County woman is stuck with $125,000 in deactivated gift cards that she bought from a Home Depot employee who embezzled them.

The man was convicted of communications fraud after Ogden police said he stole $330,000 in Home Depot cards from his employer and sold them to people after advertising them on ksl.com classifieds.

But Kaitlyn Peterson has filed a civil lawsuit against Home Depot, because after it detected the fraud it deactivated $165,000 worth of cards, and she was unable to finish redeeming those she had bought.

Peterson was building a home in October 2017 when she saw a ksl.com ad for a Home Depot gift card, discounted to $475, according to her lawsuit in 2nd District Court in Ogden.

She arranged to meet Daniel Martinez, 34, at the Riverdale Home Depot to verify the card. She used the card to buy several items for her project. The card worked fine and she paid Martinez.

Peterson saw a second ad by Martinez two weeks later for another $475 card. She messaged him that she was interested in the second card and asked how he obtained them.

The lawsuit said Martinez told her he was an early investor in Bitcoin, a type of digital currency. He said he was an online gamer and trader and earned Bitcoin credits by winning games. Then he withdraw Bitcoin in cash or exchanged credit for electronic gift cards, he told her.

Home Depot cards were “very popular and easy to sell and he would make more money converting his Bitcoin to Home Depot cards and selling them,” she said.

Peterson accepted the explanation, her lawsuit said, because she had no experience with Bitcoin and the first card worked well.

She told Martinez she would be interested in all the Home Depot cards he had because she was building a home and knew she could use them all.

“Martinez offered increasing discounts for increasing purchase amounts at one time,” the suit said, and Peterson bought numerous cards and redeemed several a week at Home Depot without a problem.

On May 25, 2018, Home Depot deactivated or declined the cards, and Peterson was rebuffed when she appealed to customer service, according to the suit.

Home Depot in March this year told Peterson’s attorney that it denied responsibility.

The suit argues that Home Depot should have had better employee and gift card security. Instead, the company “did nothing and allowed Martinez to operate with impunity selling fraudulent egift cards to plaintiff for eight months.”

Home Depot attorneys on Monday had the state court suit transferred to U.S. District Court in Salt Lake City.

Aaron Shumway, a Las Vegas attorney representing the retailer in the case, declined to comment.

Jason M. Yancey of Layton, Peterson’s attorney, did not respond to a request for comment.

An Ogden police probable cause statement said a Home Depot internal investigator reported that Martinez admitted he generated the cards. Ogden police said they found Martinez’s ads on ksl.com and said at least one other person was bought the stolen cards.

In a plea bargain with the Weber County Attorney’s Office, Martinez on May 21 pleaded guilty to a reduced charge of third-degree felony communications fraud and a charge of theft by deception was dismissed.

On July 1, 2nd District Judge Reuben Renstrom sentenced Martinez to a suspended prison term of 0 to 5 years and put him on three years of court probation.

Renstrom ordered Martinez to pay $161,499 restitution “in behalf of Home Depot,” in payments of at least $500 per month, according to court records.

You can reach reporter Mark Shenefelt at mshenefelt@standard.net or 801 625-4224. Follow him on Twitter at @mshenefelt.

See what people are talking about at The Community Table!