Nine Charged in Large Scale Retail Fraud Scheme

Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced that a grand jury returned an indictment charging nine individuals who are alleged to have operated a large-scale retail fraud scheme from August of 2009 through April 1, 2010.

The indictment charges Andre Reese, age 36, of Cleveland, Ohio; Dimorio McDowell, age 33, of Trenton, New Jersey; Jeffery McClain, age 39, of Cleveland, Ohio; Kevin McBride, age 33, of Cleveland, Ohio; Michael Sailes, age 50, of Cleveland, Ohio; Edwin Peavy, age 51, of Cleveland, Ohio; Daniel Ashford, age 36, of Cleveland, Ohio; James L. Wiggins, age 46, of Cleveland, Ohio; and Jay Williams, age 27, of Cleveland, Ohio.

The United States Bureau of Prisons and the Trenton Resident Agency of the FBI initiated an investigation to identify an inmate at Fort Dix Federal Correctional Institution in New Jersey who was suspected of conducting a fraud scheme via telephone. McDowell was incarcerated at Fort Dix and was suspected of conducting these activities. Law enforcement agencies in Northern Ohio attempted to identify local individuals who were involved in this scheme. A joint investigation in New Jersey and Ohio led to the charges against these defendants.

The indictment alleges that Defendant McDowell obtained personal information on individuals who had credit card accounts at various retailers, such as Best Buy, Home Depot, J.C. Penney, Lowe’s, Macy’s, Nordstrom’s, Saks Fifth Avenue, Sears, and Staples. McDowell contacted the retailers, impersonating the true account holders, store employees, or corporate fraud investigators. In the course of these telephone calls, McDowell used information such as the account holders’ names, addresses, dates of birth, social security numbers, and credit card account numbers. McDowell obtained additional information regarding account holders, added the names of co-conspirators as authorized users to accounts, and changed the addresses, dates of birth, and other background information relating to the true account holders, thus taking over the accounts. He also asked for increases in the credit limits on the accounts. After taking over accounts, adding additional users to the accounts, and opening new accounts, McDowell communicated with Cleveland-area co-conspirators.

It is further alleged that between August 2009 and April 2010, Andre Reese, Daniel Ashford, Kevin McBride, Jeffery Mcclain, Edward Peavy, Mike Sailes, James Wiggins, Jay Williams, and others used the fraudulently obtained credit card accounts, and purchased over $200,000 in goods and merchandise from retailers. The merchandise was regularly sold to customers for a fraction of the fair market value. At times, customers placed orders for particular items of merchandise, which were then purchased using fraudulently obtained credit card accounts.

If convicted, each defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case was investigated by the Bath Township Police Department, Stow Police Department, Mentor Police Department, Willoughby Police Department, Cleveland Heights Police Department, Cuyahoga County Sheriff’s Department, Bedford Heights Police Department, Strongsville Police Department, Richmond Heights Police Department, University Heights Police Department, Beachwood Police Department, Jackson Township Police Department, Cleveland Division of Police, United States Postal Inspectors, United States Bureau of Prisons, Newark Division - Trenton Resident Agency of the FBI, and the Cleveland Office of the FBI. The case is being prosecuted by Assistant United States Attorney Matthew B. Kall.

An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.