Four
Plead Guilty in $200 Million International
Credit Card
Fraud Conspiracy
NEWARK, NJ—A New York man
who participated in one of the largest credit card fraud
schemes ever charged by the Justice Department today
admitted his role in the scheme, the fourth conspirator
to do so in a two-week period, New Jersey U.S. Attorney
Paul J. Fishman announced.
Muhammad Shafiq, 39, of Bellrose, New York, pleaded
guilty today before U.S. Magistrate Judge Madeline Cox
Arleo in Newark federal court to an information charging
him with one count of conspiracy to commit bank fraud.
Vernina Adams, 31, of Philadelphia, and Raghbir Singh,
57, of Hicksville, New York, pleaded guilty on July 31,
2013, to separate informations charging the same
offense. Mohammad Khan, 49, of Staten Island, New York,
pleaded guilty on July 24, 2013, to an information
charging conspiracy to defraud the United States.
According to documents filed in this case and statements
made in court:
Shafiq, Adams, Singh, and Khan were originally charged
in February 2013 as part of a conspiracy to fabricate
more than 7,000 false identities to obtain tens of
thousands of credit cards. Members of the conspiracy
doctored credit reports to pump up the spending and
borrowing power associated with the cards. They then
borrowed or spent as much as they could, based on the
phony credit history, but did not repay the
debts—causing more than $200 million in confirmed losses
to businesses and financial institutions.
The scheme involved a three-step process in which the
defendants would make up a false identity by creating
fraudulent identification documents and a fraudulent
credit profile with the major credit bureaus; pump up
the credit of the false identity by providing false
information about that identity’s creditworthiness to
those credit bureaus; then run up large loans.
The scope of the criminal fraud enterprise required
Shafiq, Adams, Singh, Khan, and their conspirators to
construct an elaborate network of false identities.
Across the country, the conspirators maintained more
than 1,800 “drop addresses,” including houses,
apartments, and post office boxes, which they used as
the mailing addresses of the false identities.
During their guilty plea proceedings, Shafiq, Singh, and
Khan admitted they helped obtain credit cards in the
name of third parties—many of which were fictional—then
directed the credit cards to be mailed to addresses
controlled by members of the conspiracy. They also
admitted they knew the cards would be used fraudulently
at businesses, with Khan admitting to personally using
the cards.
Adams and her conspirators also used sophisticated
methods—including a network of black-market businesses
called “tradelines” providers—to commit fraud.
During her plea proceeding, Adams admitted advertising
on Craigslist for individuals willing to add someone
onto their credit cards. She also admitted selling other
members of the conspiracy fraudulent “tradelines,”
including by working with Acapulco Jewelry, a complicit
business in California. Adams would extend a fictitious
line of credit to a false identity, backdate the line of
credit so it appeared to have existed for a longer
period of time, then falsely report the line of credit
had been paid.
The count to which Shafiq, Adams, and Singh pleaded
guilty carries a maximum potential penalty of 30 years
in prison and a $1 million fine, or twice the gain or
loss caused by the offense. The count to which Khan
pleaded guilty carries a maximum potential penalty of
five years in prison and a $250,000 fine, or twice the
gain or loss caused by the offense.
Each defendant is scheduled for sentencing by U.S.
District Judge Anne E. Thompson in Trenton, New Jersey:
Shafiq on November 14, 2013; Adams and Singh on November
7, 2013; and Khan on October 30, 2013.
U.S. Attorney Fishman praised special agents of the
FBI’s Cyber Division, under the direction of Special
Agent in Charge Aaron T. Ford, for the investigation
leading to the guilty pleas, as well as postal
inspectors, under the direction of Postal Inspector in
Charge Marie L. Kelokates, and special agents of the
U.S. Secret Service, under the direction of Special
Agent in Charge James Mottola. He also thanked the U.S.
Social Security Administration for its role in the
investigation.
The government is represented by Assistant U.S.
Attorneys Zach Intrater and Daniel V. Shapiro of the
U.S. Attorney’s Office Economic Crimes Unit and Barbara
Ward of the office’s Asset Forfeiture Unit in Newark.
This case was brought in coordination with President
Barack Obama’s Financial Fraud Enforcement Task Force.
The task force was established to wage an aggressive,
coordinated, and proactive effort to investigate and
prosecute financial crimes. With more than 20 federal
agencies, 94 U.S. Attorneys’ offices, and state and
local partners, it’s the broadest coalition of law
enforcement, investigatory, and regulatory agencies ever
assembled to combat fraud. Since its formation, the task
force has made great strides in facilitating increased
investigation and prosecution of financial crimes;
enhancing coordination and cooperation among federal,
state, and local authorities; addressing discrimination
in the lending and financial markets; and conducting
outreach to the public, victims, financial institutions
and other organizations. Over the past three fiscal
years, the Justice Department has filed nearly 10,000
financial fraud cases against nearly 15,000 defendants
including more than 2,900 mortgage fraud defendants. For
more information on the task force, please visit
www.stopfraud.gov. (Source:
fbi.gov) |