FORMER FUGITIVE PLEADS GUILTY TO IDENTITY THEFT AND BANKRUPTCY FRAUD

FROM: U.S. DEPARTMENT OF JUSTICE
Monday, April 8, 2013
Former Federal Fugitive Pleads Guilty in California to Massive Fraud and Identity Theft Scheme in Connection with Nationwide Foreclosure Scam

Defendant Collected More Than $1.2 Million from More Than 800 Distressed Homeowners

A former Los Angeles resident, who fled to Canada and was a federal fugitive for 12 years, pleaded guilty today to aggravated identity theft and bankruptcy fraud in connection with leading a nearly 15-year foreclosure-rescue scam that fraudulently postponed foreclosure sales for more than 800 distressed homeowners, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Central District of California André Birotte Jr., U.S. Attorney for the Northern District of California Melinda Haag, Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office and Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

Glen Alan Ward, 48, pleaded guilty in connection with three separate sets of charges in the Central and Northern Districts of California, all stemming from Ward’s 15-year fraud. In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which arose out of federal charges in 2000 in the Central District of California related to Ward’s early conduct in the scheme. In 2002, Ward was indicted on multiple counts of bankruptcy fraud in the Northern District of California for continuing the scheme in and around San Francisco. On Aug. 17, 2012, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in the Central District of California after fleeing to Canada and continuing his fraud from there. While in Canada, Ward recruited Frederic Alan Gladle, who was indicted in the Central District of California for bankruptcy fraud and identity theft in 2011, and was sentenced in 2012 to 61 months in custody for engaging in similar conduct.

On April 5, 2012, Ward was arrested in Canada by the Royal Canadian Mounted Police and the Waterloo Regional Police Service based on a U.S. provisional arrest warrant. On Dec. 21, 2012, Ward was extradited to the United States to answer all three sets of charges.

"Glen Alan Ward spent years preying on distressed homeowners and stealing the identities of bankruptcy debtors, all to pad his own pockets," said Acting Assistant Attorney General Raman. "Now he faces years in prison for his crimes. This successful prosecution illustrates our commitment to tirelessly pursuing fraudsters and ensuring that sophisticated schemes that prey on vulnerable homeowners will not go unpunished."

"Mr. Ward fled the United States years ago in an attempt to keep his fraudulent foreclosure scheme running," said United States Attorney André Birotte Jr. "Today's conviction should serve as a reminder that criminals can run, but they can't hide. The reach of the federal law is long and scammers like Ward, who try to take advantage of distressed homeowners, will be tracked down and prosecuted regardless of their efforts to do otherwise."

According to the plea agreement filed today before U.S. District Judge Dale S. Fischer in the Central District of California, Ward admitted to engaging in a fraud scheme that took place from 1997 to April 5, 2012, the day he was arrested by Canadian authorities. According to the plea agreement, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.

Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years. In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.

As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward admitted to collecting more than $1.2 million from his clients who paid for his illegal foreclosure-delay services, all of which he has agreed to forfeit.

"Today's announcement is the result of a collaborative international effort and the FBI is grateful to our partners with the Royal Canadian Mounted Police and the Waterloo Regional Police for their assistance in the fugitive investigation and apprehension," said Bill Lewis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "Mr. Ward's long-term scheme is an extreme example of calculated fraud based on greed, and I'm proud of the persistence shown by our federal partners at SIGTARP, the Office of United States Trustees, and the United States Attorney's Office, in pursuing this case to its successful end."

"We are committed to pursuing those who defraud the most vulnerable victims of the real estate market," said FBI San Francisco Special Agent in Charge David J. Johnson. "This is an excellent example of how closely we work with our law enforcement partners here and abroad to ensure that criminals are brought to justice."

"With today’s plea, justice is served for the victims of Ward’s long-running bankruptcy fraud scheme," said Christy Romero, Special Inspector General for TARP (SIGTARP). "While on the run for 12 years and having fled to Canada to avoid answering for earlier charges of bankruptcy fraud, Ward continued to victimize hundreds of struggling homeowners, steal the identities of unsuspecting U.S. taxpayers involved in bankruptcy proceedings, and exploit civil protections under bankruptcy law to defraud lenders, including numerous TARP recipients. SIGTARP and our law enforcement partners will continue to ensure that those responsible for fraud related to TARP are brought to justice and answer for their crimes."

Each count of bankruptcy fraud carries a maximum sentence of five years in prison. Aggravated identity theft carries a two-year mandatory sentence, to run consecutive to any other sentence. Ward will be sentenced on July 29, 2013 before United States District Judge Dale S. Fischer, and will continue to be held without bond.

This case is being prosecuted by Trial Attorney Paul Rosen of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Evan Davis of the U.S. Attorney’s Office for the Central District of California. Assistant U.S. Attorney Jonathan Schmidt is prosecuting the charges in the Northern District of California, which were transferred to the Central District of California for entry of the guilty pleas. The investigation was conducted by SIGTARP and the FBI, which received substantial assistance from the U.S. Trustee’s Office. In addition, the Canadian Waterloo Regional Police Service and Royal Canadian Mounted Police provided exceptional support and assistance in connection with Ward’s arrest and extradition.

This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.

STATE OF ALABAMA EMPLOYEE INDICTED FOR IDENTITY THEFT

FROM:  U.S. DEPARTMENT OF JUSTICE

Tuesday, January 29, 2013

Alabama Employee Indicted for Providing Names to a Million Dollar Identity Theft Scheme

 

 

A federal grand jury in Montgomery, Ala., returned an indictment charging Lea’Tice Phillips for conspiring to file false tax returns using stolen identities, the Justice Department and the Internal Revenue Service (IRS) announced today. The 37 count indictment charges Phillips with conspiracy to file false claims, wire fraud, computer fraud and aggravated identity theft.

 

According to the court documents, Phillips worked for an Alabama state agency and had access to state databases which contained means of identification of individuals. Between October 2009 and April 2012, Phillips conspired with Antoinette Djonret and others to file false tax returns using stolen identities. On multiple occasions, Phillips accessed a state database to obtain means of identification. Phillips used her state email to send means of identification to Djonret. Djonret and others used those means of identification to file false tax returns. Djonret and her co-conspirators filed most of the tax returns from her residence in Montgomery. Djonret and her co-conspirators used an elaborate network of individuals to launder the tax refunds. They recruited individuals to purchase prepaid debit cards and to provide the cards to Djonret and her co-conspirators. The fraudulent tax refunds were directed to the prepaid debit cards. Djonret and her co-conspirators would then use the prepaid debit cards to obtain the proceeds. Some of the prepaid debit cards were in the name of Lea’Tice Phillips. In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds.

 

On Aug. 9, 2012, a federal grand jury in Montgomery returned a superseding indictment charging Antoinette Djonret, Angelique Djonret, Tabitha Stinson, Melba Wilson, Chantresa Hayes and Corey Means for their roles in the same conspiracy.
 

 

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the Phillips faces 10 years imprisonment for the conspiracy to file false claims, 20 years for each wire fraud count, 10 years imprisonment for each computer fraud count and a mandatory two-year sentence for the aggravated identity theft counts. She is also subject to fines, mandatory restitution and forfeiture.

 

The case was investigated by Special Agents of the IRS - Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.

 

 

WOMAN INDICTED FOR IDENTITY THEFT TO OBTAIN TAX REFUNDS

FROM: U.S. DEPARTMENT OF JUSTICE
Monday, January 7, 2013
Georgia Woman Indicted for Stealing Identities to Obtain Tax Refunds

A federal grand jury in Montgomery, Ala., returned a superseding indictment charging Deatrice Smith Williams and Quentin Collick for their roles in a stolen identity refund fraud conspiracy, Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division, U.S. Attorney for the Middle District of Alabama George L. Beck Jr. and the Internal Revenue Service (IRS) announced today. The 13 count indictment charges Williams and Collick with conspiracy to file false claims, theft of public funds, wire fraud and aggravated identity theft.

On Aug. 9, 2012, Quentin Collick was indicted for his role in the conspiracy. In November 2012, pursuant to a criminal complaint, Williams was arrested for her role in the conspiracy. The superseding indictment was unsealed today.

According to court documents, Williams worked for a debt collection company in Georgia. As part of her employment, Williams had access to names and social security numbers. She provided several names and Social Security numbers to her son-in-law, Quentin Collick. Collick, and his co-conspirators used those names to file false tax returns from the Middle District of Alabama. Collick and his co-conspirators, in turn, cashed several fraudulent federal refund checks.

An indictment merely alleges that crimes have been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Collick and Williams each face maximum potential sentences of 10 years in prison for the conspiracy count, up to 20 years in prison for each wire fraud count, and a mandatory 2-year sentence for the aggravated identity theft counts. Collick also faces up to 10 years in prison for each theft of public funds count. They are also subject to fines and mandatory restitution if convicted.

The case was investigated by Special Agents of the IRS - Criminal Investigation. Tax Division Trial attorneys Jason H. Poole and Michael Boteler and Assistant U.S. Attorney Todd Brown are prosecuting the case.

BEWARE OF AFTER-DISASTER SCAMS

Hurricane Sandy Aftermath.  Credit:  FEMA

FROM: U.S. FEDERAL EMERGENCY MANAGEMENT AGENCY

Beware of Scams After Hurricane Sandy
Release date:
November 4, 2012
Release Number:
DR-4086 NR 003

TRENTON, N.J. -- Disaster recovery officials caution New Jersey residents to be on the alert for scam artists using old and new tricks to obtain vital information or take advantage of storm-weary survivors.

Be aware of the following scams used by con artists after a disaster:

Identity Theft
People may pretend to be employed by the Federal Emergency Management Agency (FEMA) or other government agencies, such as the U.S. Small Business Administration (SBA) or public utilities. By going door-to-door to storm-damaged homes, or by phone or on the internet, con artists may try to obtain personal information such as Social Security and bank account numbers.

Remember:
A FEMA or SBA shirt or jacket is not absolute proof of someone’s affiliation with these agencies. All authorized FEMA or SBA personnel display a laminated photo identification card, which they are required to wear at all times;
FEMA will request personal information only when the applicant first contacts FEMA. Survivors of Hurricane Sandy can register with FEMA in any of the following ways:
Online any time at www.DisasterAssistance.gov or by web-enabled mobile device at m.fema.gov
By phone at 800-621-FEMA (3362) from 7 a.m. to 10 p.m. daily
By 711 or Video Relay Service (VRS) at 800-621-3361 or (TTY) 800-462-758.
On any follow-up calls, a FEMA representative would ask only for the last four digits of the applicant’s social security number
False Payment or Bribe
Imposters may ask for some form of service payment, or bribe – something no FEMA, SBA or federal agency employee should ever do. FEMA-contracted housing inspectors assess damage but do not determine cost estimates. FEMA does not hire or endorse specific contractors to fix homes or recommend repairs.

Con artists may pose as insurance specialists or expeditors, claiming they can convince FEMA to increase home repair damage aid or the insurer to pay a larger settlement. The scammers ask the applicant or policyholder to sign a contract giving them a percentage of the "increased" payment. The essence of the con is to take a percentage of the damage grant or policy settlement that would be given anyway. FEMA always deals directly with each applicant and is always willing to consider an appeal by sending a new inspector to review damaged property or claimed losses.

Home Repair Scams
Unregistered home improvement contractors may take the disaster survivor’s money and disappear, leaving unfinished work and unsafe homes. Before hiring a contractor, the survivor should check with the New Jersey Division of Consumer Affairs at 800-242-5846 to make sure the contractor is registered, as well as ask for a copy of the contractor’s liability insurance and verify the policy is valid. All contracts should be in writing, and reviewed before being signed. Full payment should not be made until the work is completed.

The local police department should be notified of suspected fraud.

Price Gouging
Excessive price increases are illegal. Check with the New Jersey Consumer Affairs office at www.NJConsumerAffairs.gov or call 800-242-5846 if you suspect the prices are too high.

Charity Scams
Before donating, people should investigate to be sure the organization asking for donations is registered to solicit in New Jersey and ask how the money will be used.

NATIONAL CYBER SECURITY AWARENESS MONTH

JOINT BASE SAN ANTONIO-LACKLAND, Texas -- The Bureau of Justice Website says that in 2010, seven percent of households in the United States (about 8.6 million households) had at least one member age 12 or older who experienced one or more types of identity theft victimization. (U.S. Air Force graphic illustration by William Parks.)

FROM: U.S.  DEPARTMENT OF DEFENSE

National Cyber Security Awareness Month: Protecting PII everyone's responsibility

by Tech. Sgt. Scott McNabb
24th Air Force Public Affairs

10/16/2012 - JOINT BASE SAN ANTONIO-LACKLAND, Texas -- Safeguarding information is a way of life in the Air Force and the service trains military members, Department of Defense and contract civilians alike to avoid releasing personally identifiable information about themselves or others.

A letter from the secretary of defense defined PII as information which can be used to distinguish or trace an individual's identity, such as their name, social security number, date and place of birth, mother's maiden name, and biometric records, including any other personal information which is linked or linkable to a specified individual.

"I would agree that DoD community members have access to, and use, PII on a near daily basis," said David Swartwood, Joint Information Operations Warfare Center operations security analyst. "PII is embedded in nearly every aspect of what we do: military pay, travel orders, permanent change of station orders, medical, appraisals, record keeping, training, etc. For example, an identify thief can take your name, SSN and address and potentially open up fake banking accounts or obtain fraudulent credit cards. When we mishandle and improperly release PII it is like we're handing our exploitable information straight to the bad guy - we might as well put a bow on it."

The Bureau of Justice Website says that in 2010, seven percent of households in the United States (about 8.6 million households) had at least one member age 12 or older who experienced one or more types of identity theft victimization.

Swartwood said the Department of Defense has provided clear guidance on how to handle and protect PII and it's up to those who work for the department to recognize and protect PII.

"Mishandling PII places the individuals at risk and jeopardizes our mission," he said. "If my military member is distracted or harmed by a loss of their PII, then they're not focused on the mission and we're losing valuable time and resources resolving the issue. People need to understand there are adversaries out there who want to get a hold of their information and use it to harm them. When handling someone else's personal info, people should think, 'How would I want my information handled and protected?'"

Swartwood said JIOWC teams conduct OPSEC surveys around the world in support of combatant commands and they often find more PII than they should by monitoring communications and digging through trash and recycle containers.

"In a recent OPSEC survey our team recovered a small stack of improperly discarded personal paperwork in a recycle container," he explained. "It provided the service member's name, unit and SSN."

The OPSEC team did what most people do when they're looking for information. They went online.

"We did a quick 30 minute search online for the member's name and found: date of birth, phone number, personal e-mail address, social media profile, child's name, child's date of birth, child's school, child's age, school address and spouse's name," he said. "This military member had recently deployed overseas while their family remained at home. How effective do you think they would be if someone targeted their family while they were deployed? How easy do you think it would be to steal their identity and ruin their finances?"

That much information in just 30 minutes shows how easy it would have been, but there are ways to avoid such a breach of PII.

Do not leave items such as performance reports, recall rosters, social rosters or alpha rosters in an area that could result in their loss or theft. Do not place PII on public websites or SharePoint. Encrypt all emails that contain PII, put (FOUO) at the beginning of the subject line, and apply the following statement at the beginning of the e-mail:

"The information herein is For Official Use Only (FOUO) which must be protected under the Privacy Act of 1974, as amended. Unauthorized disclosure or misuse of this personal information may result in criminal and/or civil penalties."

Once you are finished working with PII, dispose of the documents (paper or electronic) properly. Disposal methods may include: tearing, erasing, burning, melting chemical decomposition, pulping, pulverizing, shredding and mutilation. Use shredders that produce a crosscut to ensure paper pieces are indecipherable. Permanently delete electronic records.

If you discover any disclosures of PII, report it immediately through your supervisor and chain of command and contact the base Privacy Act manager. Additionally, lost, stolen or possible compromised PII must be reported to U.S. CERT within one hour of the discovery. An investigation will be initiated and those who are found guilty of causing the breach could be charged with criminal and civil penalties.

DOD Instruction 5400.11-R, DOD Privacy Program and AFI 33-332, Air Force Privacy Program establishes the current DOD and Air Force guidance on PII.

"Education is the best countermeasure in my opinion," said Swartwood. "Letting people know they're responsible for protecting PII along with training them how to safeguard it is critical."

　

TEXAS MAN SENTENCED FOR BANKRUPTCY FRAUD AND IDENTITY THEFT IN A NATIONWIDE SCHEME

FROM:  U.S. DEPARTMENT OF JUSTICE
Thursday, May 3, 2012
Austin, Texas, Man Sentenced to 61 Months in Federal Prison for Bankruptcy Fraud and Identity Theft in Connection with Nationwide Foreclosure-rescue Scheme Defendant Collected $1.6 Million from More Than 1,100 Distressed Homeowners

WASHINGTON – An Austin, Texas, man was sentenced today in the Western District of Texas to 61 months in prison and was ordered to forfeit $84,010 for his role in operating a foreclosure-rescue scam in Southern California and elsewhere that charged distressed homeowners fees in exchange for fraudulently delaying foreclosure sales.

The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Andre Birotte Jr. of the Central District of California, U.S. Attorney Robert Pitman of the Western District of Texas, Assistant Director in Charge Steven Martinez of the FBI’s Los Angeles Field Office and Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

Frederic Alan Gladle, 53, was sentenced by U.S. District Judge Lee Yeakel.  Gladle pleaded guilty on Jan. 6, 2012, to one count of bankruptcy fraud and one count of aggravated identity theft.  He was originally charged on Dec. 9, 2011.  In addition to the $84,010, Gladle was ordered to forfeit 63 prepaid, reloadable debit cards that he used to further his scheme.

“Mr. Gladle concocted an elaborate fraud scheme to use the financial crisis to his criminal advantage,” said Assistant Attorney General Breuer.  “He preyed upon vulnerable homeowners facing foreclosure, just as the housing bubble began to burst and stood in the way of financial institutions attempting to collect on their debts.  We will continue to pursue scam artists like Mr. Gladle and ensure that they are held accountable for their crimes.”

“Foreclosure-rescue scams are designed to victimize people in extreme financial distress,” said U.S. Attorney André Birotte Jr.  “Financial predators like Mr. Gladle need to be held accountable for the harm they cause and today’s sentence does just that, sending the message to scam artists like Mr. Gladle that the final outcome for their criminal schemes is a long stay in federal prison.”

“Gladle preyed on struggling homeowners with promises to delay their foreclosures for a fee,” said Christy Romero, Special Inspector General at SIGTARP.  “To forestall the foreclosures, Gladle deeded away a portion of their homes to unsuspecting debtors in bankruptcy, stealing the debtors’ identities and forging their signatures.  Gladle exploited homeowners, the debtors whose identities he stole, and multiple banks, including TARP banks.  The exploitation of TARP will not be tolerated, and SIGTARP and our partners will hold individuals accountable for their actions.”

“This scheme was particularly insidious in that Mr. Gladle exploited victims who were already in financial straits,” said FBI Assistant Director Martinez.  “This sentence should send a message to those contemplating similar fraud targeting vulnerable individuals or the banking system and, in addition, should encourage those trying to salvage their homes to beware of fraudulent rescue offers.”

Gladle admitted that beginning in October 2007 and continuing until October 2011, he operated a foreclosure-rescue fraud scheme that netted him more than $1.6 million in fees from distressed homeowners.  According to court documents, Gladle used five aliases to avoid detection, including stealing the identity of at least one person and setting up a mobile phone account in that victim’s name.
Gladle admitted that he recruited homeowners whose properties were in danger of imminent foreclosure and falsely promised to delay the foreclosures for up to six months, in exchange for a fee of approximately $750 per month.  Gladle, directly or through salespersons, directed homeowners to sign deeds granting fractional interest in their properties to debtors in bankruptcy proceedings whose names Gladle found by searching bankruptcy records.  The debtors were unaware that their names and bankruptcy cases were being stolen by Gladle in his scheme.  Gladle then sent the unsuspecting debtors’ bankruptcy petitions, and the deeds that transferred fractional interests to the debtors, to the homeowners’ lenders to stop foreclosure proceedings.

Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales.  The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money.  When homeowners wanted to void the deeds to the unsuspecting debtors, Gladle would forge the debtors’ signatures on papers voiding the deeds.

A defendant charged in the Northern and Central Districts of California for a separate similar foreclosure rescue scheme, Glen Alan Ward, was arrested in Canada last month.  Ward has been a fugitive sought by U.S. federal authorities since 2000.  According to court documents, Ward, who also goes by the name Brandon Michaels, is alleged to have worked with and taught Gladle the scheme.  Ward is currently being detained in Canada pending his extradition to the United States.

This case is being prosecuted by Trial Attorney Paul Rosen of the Fraud Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Evan Davis for the Central District of California, with substantial assistance provided by Assistant U.S. Attorneys Chris Peele of the Western District of Texas.  The investigation was conducted by the FBI and SIGTARP, which received substantial assistance from the U.S. Trustee’s Office.

FOUR CONVICTED FOR ROLES IN IDENTITY THEFT RING

The following excerpt is from the Department of Justice website:
Thursday, March 22, 2012
Armenian Power Member and Three Armenian Power Associates Convicted in Los Angeles for Roles in Identity Theft Ring
WASHINGTON – After a five week trial, four defendants have been convicted for their roles in one of the largest bank fraud and identity theft schemes in California history, with dozens of victims in four states and millions of dollars in losses.

The convictions were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Andre Birotte Jr. of the Central District of California, Assistant Director in Charge of the FBI’s Los Angeles Field Office Steven Martinez and Special Agent in Charge of the U.S. Secret Service (USSS) Joseph Beaty.

Arman Sharopetrosian, Karen Markosian, Artush Margaryan and Kristine Ogandzhanyan were found guilty of conspiring to commit bank fraud, attempted bank fraud and various counts of aggravated identity theft.  Sharopetrosian, Markosian and Ogandzhanyan waived a jury trial and consented to trial by the judge, and Margaryan proceeded with a jury trial.

Yesterday, U.S. District Judge David O. Carter found Ogandzhanyan, 28, of Burbank, Calif., guilty of one count of bank fraud conspiracy, two counts of attempted bank fraud and four counts of aggravated identity theft.  On March 16, 2012, the judge found Sharopetrosian, 33, of Burbank, guilty of one count of bank fraud conspiracy, four counts of bank fraud and seven counts of aggravated identify theft.  On March 16, 2012, the judge also found Markosian, 39, of Glendale, Calif., guilty of one count of bank fraud conspiracy, one count of attempted bank fraud and two counts of aggravated identity theft.  A jury convicted the fourth defendant, Artush Margaryan, 28, of Van Nuys, Calif., on March 16, 2012, of one count of bank fraud conspiracy, one count of attempted bank fraud and three counts of aggravated identity theft.

Evidence was presented at trial that Sharopetrosian is a member of the Armenian Power organized crime group, and Margaryan, Markosian and Ogandzhanyan are Armenian Power associates.

According to evidence presented at trial, Sharopetrosian directed the massive fraud scheme along with co-defendant Angus Brown, while the two were incarcerated at Avenal State Prison.  Using cellular telephones that were smuggled into the prison, Sharopetrosian and Brown worked from behind bars to coordinate with others, including Ogandzhanyn, Markosian and Margaryan, to obtain confidential bank profile information and steal money from victim account holders.  Often targeting high-value bank accounts, the defendants used account holders’ personal identifying information – including names, Social Security numbers and dates of birth – to impersonate victims in phone calls to the bank.  The defendants gathered account information, transferred funds between victims’ accounts and placed unauthorized check orders for the accounts.  They then stole the checks, obtained the victims’ signatures from public documents and paid conspirators to cash the forged checks.  Over the course of the six-year conspiracy, the defendants and their co-conspirators caused more than $10 million dollars in losses to victims in Southern California, Nevada, Arizona and Texas.

“These defendants, including two individuals who were operating from a prison cell, perpetrated a massive fraudulent scheme on behalf of a dangerous criminal enterprise,” said Assistant Attorney General Breuer.  “As members and associates of Armenian Power, they stole sensitive personal and financial information from innocent consumers and caused millions of dollars in losses.  Whether organized criminal groups traffic in drugs, commit financial fraud or wreak other havoc to keep themselves going, they must be stopped.  We are doing everything possible to shut down dangerous gangs like Armenian Power.”

“The safety and sanctity of confidential financial information is paramount in today’s society,” said U.S. Attorney Birotte.  “Identity theft is a fundamental invasion of consumer privacy that cannot be tolerated.  These convictions demonstrate that violators, whoever and wherever they may be, will be caught and will be prosecuted to the fullest extent of the federal law.”

“The defendants were convicted in a trial that uncovered a sophisticated and lengthy scheme that targeted victims in multiple states, and included disturbing details, such as orders made from within prison walls and assistance from bank insiders enlisted by the defendants,” said FBI Assistant Director Martinez.  “This case is also indicative of the growing trend of gang or organized crime-affiliated groups now engaging in identity theft and other financial crimes in furtherance of their enterprise.”  

These defendants are four of 20 defendants who were charged with operating the bank fraud and identity theft scheme in one of a series of federal indictments unsealed on Feb. 16, 2011.  The indictments allege various federal crimes against members and associates of the Armenian Power criminal organization.  To date, 19 of the 20 defendants charged in the bank fraud indictment have been convicted, including Brown.  One defendant, Faye Bell, was arrested earlier this year and is still awaiting trial.

Sharopetrosian, Margaryan, Markosian and Ogandzhanyan face maximum sentences of 30 years in federal prison for each count of bank fraud, 30 years for each count of conspiracy to commit bank fraud and additional mandatory two year sentences for each count of aggravated identity theft.

 Sentencing for all four defendants is scheduled for Aug. 6, 2012, before Judge Carter.

The case is being prosecuted by Assistant U.S. Attorneys Martin Estrada and Joseph McNally of the Central District of California and Trial Attorney Cristina Moreno of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.  The case was investigated by the Eurasian Organized Crime Task Force, which includes the FBI, the USSS, the Los Angeles Police Department, the Glendale Police Department, the Burbank Police Department, the Internal Revenue Service and the U.S. Immigration and Customs Enforcement.

6 PLEAD GUILTY TO STEALING THE IDENTITIES OF DEAD PEOPLE

The following excerpt is from the Department of Justice website:
Tuesday, March 13, 2012
Six Plead Guilty in Ohio to Tax and Mail Fraud Conspiracies Involving I.D. Theft of Deceased
Muaad Salem, Hanan Widdi, Najeh Widdi, Hazem Woodi, Daxesj Patel and Fahim Suleiman each entered guilty pleas before the Honorable James S. Gwin today to charges arising from a scheme to obtain false and fraudulent U.S. Treasury tax refund checks, the Justice Department, the U.S. Attorney’s Office for the Northern District of Ohio and the Internal Revenue Service (IRS) announced.   Specifically, Salem, Najeh Widdi and Woodi entered guilty pleas to conspiracy to defraud the United States, conspiracy to commit mail fraud and mail fraud; Hanan Widdi entered a guilty plea to conspiracy to defraud the United States and conspiracy to commit mail fraud; Patel entered a guilty plea to two counts of submitting false claims and one count of false statements; and Suleiman entered a guilty plea to conspiracy to defraud the United States, conspiracy to commit mail fraud; mail fraud and aggravated identity theft.

According to the indictment, between April 15, 2009 to at least August 2011, Salem, Suleiman, Najeh Widdi, Hanan Widdi, Woodi, Patel and other unknown co-conspirators defrauded the United States by filing false and fraudulent tax returns, many in the names of recently deceased taxpayers, and directing refunds to controlled locations in the state of Florida.   The U.S. Treasury checks generated by the false and fraudulent returns were then sent by the U.S. mail to co-conspirators in Ohio who sold and distributed the checks for negotiation at various businesses and banking institutions.   As part of their plea agreements, the defendants admitted that the fraud loss caused by their conduct was between $1 and 2.5 million and that the offenses involved more than ten victims.

Sentencing is scheduled on May 29, 2012, for Najeh Widdi and Patel; on May 30, 2012, for Hanan Widdi and Woodi; and on June 1, 2012, for Salem and Suleiman.   Mail fraud is punishable by a maximum potential sentence of 20 years in prison; conspiracy to defraud the United States is punishable by a maximum potential sentence of 10 years; conspiracy to commit mail fraud, making a false claim against the United States and making a false statement are each punishable by a maximum potential sentence of five years in prison; aggravated identity theft is punishable by a mandatory minimum prison sentence of two years to follow conviction on any other offense.   All of the above sentences are also punishable by a fine of $250,000 for each count of conviction.

The case was prosecuted by Assistant U.S. Attorney Gary D. Arbeznik of the Northern District of Ohio and Trial Attorney Jessica W. Knight of the Justice Department’s Tax Division following investigation by the Cleveland Division of the Federal Bureau of Investigation, the IRS-Criminal Investigation, and the United States Postal Service.