By Bradford L. Geyer
While this case does not involve grant fraud or procurement fraud, it does provide a blueprint for what can be considered a very complex fraud scheme, nightmarish to investigate and prosecute, that 1) required extensive criminal wrongdoing by the perpetrators, generating $200 million in losses and thousands businesses defrauded, 2) extensive government resources and passage of time to wind up the conspiracy and 3) a 46-month term of imprisonment, which, with good time, would amount to only 39 months. There is no reference in the press release to criminal fines at all and one has to wonder how well a 39-month sentence deters future $200 million fraud schemes that involve this scope and planning.
So why make reference to this credit card fraud case on GrantFraud.com? Because whether ill-deserved or not, new US Attorney staffs under a new Attorney General may view results like these en mass as unsatisfying and this could contribute to a mindset where stricter enforcement policy is the order of the day. A widely reported focus by the Department of Justice on criminal fines over jail time is likely to be viewed by enforcers in a new administration as failed policy. Management chains often over respond to enforcement priority shifts like this and, if this happens, it will affect all investigations and prosecutions of grant fraud and procurement fraud which typically don’t involve conduct this egregious by executives who were often just careless, overwhelmed, and otherwise law abiding.
Regarding the scheme: “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; and finally, run up large loans.“
Regarding the enforcement effort: Required a line AUSA, a Deputy Chief form the USAO-NJ and an AFMLS attorney. Required multiple FBI Cyber Divison agents, Secret Service and Social Security-OIG. This stemed from a multi-year conspiracy that was charged in 2013.
Department of Justice
U.S. Attorney’s Office
District of New Jersey
FOR IMMEDIATE RELEASE
Wednesday, January 25, 2017
Middlesex County, New Jersey, Man Gets Over Three Years In Jail For Participating In
TRENTON, N.J. – An Iselin, New Jersey, man was sentenced today to 46 months in prison for his role in one of the largest credit card fraud schemes ever charged by the U.S. Department of Justice, U.S. Attorney Paul J. Fishman announced.
Babar Qureshi, 63, previously pleaded guilty before U.S. District Judge Anne E. Thompson to Count One of an indictment charging him with conspiracy to commit bank fraud. Judge Thompson imposed the sentence today in Trenton federal court. According to documents filed in this case and statements made in court:
Qureshi was 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. 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; and finally, run up large loans.
The scope of the criminal fraud enterprise required Qureshi and other 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.
Qureshi’s role in the conspiracy was to take the phony cards and charge large amounts at complicit merchants, who would then pay him a portion of the charge. He used phony bank accounts to conceal his involvement and receive proceeds from the fraud, which he used for personal expenses, including his mortgage.
In addition to the prison term, Judge Thompson sentenced Qureshi to five years of supervised release. U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked postal inspectors under the direction of Inspector in Charge James V. Buthorn, the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge Mark McKevitt, and the U.S. Social Security Administration, Office of the Inspector General, for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Daniel Shapiro and Deputy Chief Zach Intrater of the U.S. Attorney’s Office’s Economic Crimes Unit, and Sarah Devlin of the Assert Forfeiture and Money Laundering Unit.