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24 Fraud Indictments

U.S. Attorney Announces Multiple Identity Theft and Mortgage Fraud Indictments

PHILADELPHIA -- (July 28, 2006) United States Attorney Pat Meehan today announced the charging of 24 individuals in connection with six separate identity theft schemes, two of which involved mortgage fraud. In one indictment,1 filed today, 10 defendants were charged with using the personal information of hundreds of bank customers to cash counterfeit checks and withdraw money from customer counts. In an unrelated case, 10 individuals were charged in a massive mortgage and identity fraud scheme that involved 180 properties in Philadelphia and could potentially cost the government and private mortgage lenders more than $11,000,000. Joining Meehan in today’s announcement were Joseph Clarke, Special Agent-in-Charge, H.U.D Office of Inspector General in Philadelphia; Kenneth Jones, Inspector-in-Charge, United States Postal Inspection Service, Philadelphia Division; Robert Sloma, Special Agent-in-Charge, U.S. Secret Service; and Jody Weis, Special Agent-in-Charge of the F.B.I., Philadelphia Field Office.

U.S. v White, et al (Filed Today)

The indictment alleges that from at least in or about February 2004 to at least in or about November 2005, Charles White and Allen Smith were the leaders of a team of 10 individuals who conspired to defraud banks by using the names, social security numbers, addresses, and dates of birth of potentially hundreds of customers of Commerce Bank, Wachovia Bank, PNC Bank, and M&T Bank and (1) cashing closed-account foreign checks at drive-through tellers’ windows of Commerce Bank, (2) cashing counterfeit checks inside Wachovia Bank, and (3) withdrawing funds from customers’ accounts inside Wachovia Bank, M&T Bank, and PNC Bank. They also committed the substantive acts of bank fraud and aggravated identity theft, defrauding the various banks. The scheme netted at least $1 million.

“Identity theft is the fastest growing crime in America,” said Meehan. “As this case demonstrates, criminals are becoming increasingly creative in their ability to steal someone’s personal information and turn a profit.”

In order to defraud Commerce Bank, White and Smith purchased books of closed-account,2 blank checks, drawn on foreign accounts (that is, accounts from banks other than Commerce Bank). They subsequently purchased photocopies of legitimate Commerce Bank checks that had been drafted by the Commerce Bank customers, and purchased from Michael Merin, then employed by Select Financial, Inc., a collection agency in Jenkintown, Pennsylvania, means of identification, such as social security numbers, addresses, and dates of birth, of the Commerce Bank customers who originally had drafted the checks.

White, his principal assistant Antoine Norman, and Smith, with his principal assistant Kevin Norris, thereafter used the last four digits of each customer’s social security number to access the Commerce Bank customer’s account using Commerce Bank’s 1-800 automated phone system.3 Once they accessed the Commerce Bank customer’s account, White and Smith could learn about the customer’s available balance, and date, type, and amount of the customer’s last transaction. With this information, White and Smith drafted and fraudulently endorsed the closed-account foreign checks, made payable to the Commerce Bank customers, in amounts less than or equal to the available balance of each particular customer.

White and Smith subsequently provided the drafted and fraudulently endorsed, closed account checks to one or more of a team of “check-runners” who were instructed to cash these checks at a drive-through teller’s window of a Commerce Bank branch in the Eastern District of Pennsylvania and elsewhere.4 These individuals included, at various times during the conspiracy, defendants Kelly Taylor, Terry Hughes, Lisa Smith, Rachel Lukovsky, and others known and unknown to the grand jury.

White and Smith further provided check-runners with a so-called “cheat-sheet,” a small piece of paper upon which they wrote the individual Commerce Bank customer’s name, date of birth, social security number, account number, and date, type, and amount of each customer’s last transaction. They instructed the check-runners to consult this “cheat-sheet” in the event a Commerce Bank teller became curious about the legitimacy of the proposed transaction and asked the checkrunner for some identifying information unique to the customer.

Armed with the fraudulently drafted and endorsed closed-account check and the “cheatsheet,” the check-runners approached the drive-through window of a Commerce Bank branch in the Eastern District of Pennsylvania and elsewhere and cashed the check, posing as the Commerce Bank customer to whom the check was made payable.

In order to defraud Wachovia Bank, M&T Bank, and PNC Bank, White and Smith provided check-runners, including defendants Terry Hughes and Lisa Smith, as well as others unknown to the grand jury, with counterfeit driver’s licenses of the bank customers, depicting a photograph of the check-runner, but listing the bank customer’s name, date of birth, and address. White and Smith obtained false photographic identification, including driver’s licenses, from defendant Akintunde Crawford, a/k/a “Raheem.” In order to cash checks or withdraw funds inside these banks, customers are required to present photographic identification.

White and Smith also provided check-runners Hughes, Lisa Smith, and others unknown to the grand jury, with counterfeit checks made payable to the customers. Using the false-identification provided to them, Hughes and Lisa Smith, posing as the customers, approached the teller’s window inside the bank and cashed the fraudulent checks. On some occasions, Hughes and Lisa Smith, using the false-identification and bank account number of the customer that White and Norman provided to them, withdrew money from a customer’s account at the teller’s window inside the bank.

If convicted of the conspiracy, each defendant faces a statutory maximum sentence of 5 years imprisonment, a $250,000 fine, and a $100 special assessment. If convicted of bank fraud, each defendants faces a statutory maximum sentence of 30 years imprisonment, a $1,000,000 fine, and a special assessment of $100 for each count. If convicted of aggravated identity theft, each defendant faces a statutory mandatory sentence of 2 years imprisonment, to be served consecutively to any other sentence imposed for the bank fraud or conspiracy.

SOURCE: U.S. Department of Justice

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