Fifty-Three Defendants Charged in New Jersey in Coordinated Identity Theft and Fraud Takedown
|U.S. Attorney’s Office September 16, 2010|
NEWARK, NJ—Fifty-three individuals were charged today in connection with widespread, sophisticated identity theft and fraud, including 43 individuals charged with participating in one large-scale criminal enterprise, United States Attorney Paul J. Fishman and FBI Special Agent in Charge Michael B. Ward announced.
In addition to those charged in the single conspiracy, six other criminal Complaints charge 10 additional individuals with identity theft and fraud offenses. Forty-seven defendants were arrested this morning as a result of a coordinated law enforcement investigation. Of the remaining defendants, one is in state custody on unrelated charges, and five remain at large.
The defendants arrested this morning are scheduled to appear before United States Magistrate Judges Claire C. Cecchi and Madeline Cox Arleo throughout the day in Newark federal court.
According to the criminal Complaints filed in these cases:
Sang-Hyun Park et al., Mag. No. 10-4147 (CCC)
Sang-Hyun Park, a resident of Palisades Park, N.J., was the leader of a criminal organization headquartered in Bergen County, N.J. Park and his co-conspirators (the "Park Criminal Enterprise") obtained, brokered, and sold identity documents to customers that were used to commit credit card fraud, bank fraud, tax fraud, and other crimes. The 43 defendants charged in connection with the enterprise played various roles as Park's staff, identity brokers, credit build-up team, and collusive merchants, as well as customers seeking fraudulent services. The defendants and their respective responsibilities are outlined in a chart appended to this release.
Members of the Park Criminal Enterprise obtained social security cards, most beginning with the prefix "586," from various brokers. Social Security cards with that prefix were issued by the United States to individuals, usually from China, who were employed in American territories, such as American Samoa, Guam, and Saipan. After selling Social Security cards with those numbers to its customers, the Park Criminal Enterprise used these "586" Social Security cards and numbers (which corresponded to Chinese names) to obtain genuinely issued driver's licenses, identification cards, and other identity documents from various states or to manufacture counterfeit driver's licenses and other counterfeit identity documents. Although the identities were Chinese, the vast majority of the Park Criminal Enterprises' customers were of Korean descent.
The Park Criminal Enterprise engaged in the fraudulent "build up" of credit scores associated with the Chinese identities. They did so by adding the Chinese identity as an authorized user to the credit card accounts of various co-conspirators who received a fee for this service—members of the enterprise's credit build up teams. By attaching the Chinese identities to these existing credit card accounts, the teams increased the credit scores associated with the Chinese identities to between 700 and 800. The members of the build up teams knew neither the real person to whom the identity belonged nor virtually any of the customers who had purchased the identities.
Credit scores are relied on by banks, credit card companies, finance companies, and lenders, among others, when deciding whether or not to issue credit or grant loans to consumers. These credit scores were built up for use in identity theft and financial fraud for profit.
After the credit build process was completed, members of the Park Criminal Enterprise instructed, coached, and conspired with its customers to use the fraudulent identities with good credit scores to open and obtain bank accounts; bank and retail credit cards; debit cards; lines of credit; and loans—including loans guaranteed by the United States Small Business Administration ("SBA"). In particular, the Park Criminal Enterprise then "busted out" the fraudulently obtained credit cards by making purchases on the cards—often for liquor or expensive merchandise that they then sold—or by engaging in "kkang," a Korean slang phrase referring to the use of collusive merchants who, for a fee, charged these credit cards using their credit card machines for the purpose of obtaining cash. These "kkang" transactions were sham transactions; no goods or products were sold. After making the charges, the Park Criminal Enterprise made payments—drawn on other fraudulently opened, unfunded bank accounts—to the various credit card companies. Credit card companies credited the accounts for the amounts of the payments before they learned that they were bogus. The Park Criminal Enterprise then made a second round of charges on the cards. Ultimately, the credit card bills were not paid, resulting in significant financial losses to the companies.
In addition, the Park Criminal Enterprise used the fraudulent identities to defraud banks, car leasing companies, and the IRS.
During the course of the investigation, cooperating witnesses and an undercover federal agent purchased and obtained social security cards, a genuinely issued driver's license and identification card from Illinois, a counterfeit Nevada driver's license, and a counterfeit New York license. In addition, federal agents and law enforcement officers used court-authorized wiretaps to capture incriminating conversations among members of the Park Criminal Enterprise and other co-conspirators, some of which are described in the criminal Complaint.
In total, the Park Criminal Enterprise and its coconspirators caused millions of dollars in financial losses to the United States and banks, credit card companies, lenders, and others.
U.S. Attorney Paul J. Fishman stated: "The sheer scope of the fraud—and the organization that allegedly committed it—is remarkable. This type of crime puts all of us at risk, not just because of the cost to our financial institutions, but also because of the threat posed by fake identification documents. Yet, as patient and painstaking as the defendants were in designing and executing their scheme, they were still no match for the dedication, diligence, and hard work of the law enforcement agents and prosecutors who target identity theft and organized crime."
FBI Special Agent in Charge Ward stated: "The activity in this instance was a virtual crime superstore, with one-stop shopping for a variety of criminal needs. Individuals could obtain Social Security numbers under a false identity, receive assistance in obtaining an out of state driver's license under that same false identity, quickly build a fraudulent credit history, and then open bank and credit accounts. With assistance, individuals could then conduct numerous frauds with the assistance of collusive merchants and others steeped in white collar crime. The criminal activity was sophisticated, and the extent of the fraud committed by this group is believed to be substantial, if not staggering."
The Criminal Complaint charges the following offenses:
Count One charges the named defendants with conspiracy to unlawfully produce identification documents; to transfer, possess, and use a means of identification to commit other crimes; to commit credit card fraud; and to buy and sell Social Security cards. The charge carries a maximum potential penalty of five years in prison and up to a $250,000 fine.
Counts Two through Five charge the named defendants with aggravated identity theft. The charges carry a mandatory minimum term of two years in prison.
Counts Six through Eight charge the named defendants with conspiracy to commit wire fraud. The charges carry a maximum penalty of 20 years in prison and up to a $250,000 fine.
Count Nine charges the named defendant with money laundering. The charge carries a maximum penalty of 20 years in prison and up to a $250,000 fine.
Count 10 charges the named defendant with unlawfully using identification documents to defraud the United States. The charge carries a maximum penalty of 15 years in prison and up to a $250,000 fine.
United States v. Jung-Woo Shim, Mag No. 10-4161(CCC)
Jung-Woo Shim, 36, of Palisades Park, N.J., is a broker who conspired with others to "bust out" credit cards and who advertised his services in a local Korean newspaper. Shim obtained three different driver's licenses in three different Chinese names using "586" Social Security numbers, then used these fraudulently obtained identities to get credit cards, which he then charged but did not pay—causing losses to various credit card companies.
Shim is charged with three counts of unlawfully producing an identity document. Each count carries a maximum term of 15 years in prison and up to $250,000 fine. He is also charged with aggravated identity theft, which carries a two-year mandatory prison term.
United States v. Jong-Nam Kim and Yu-je Jo, Mag No. 10-4148 (CCC)
Jong-Nam Kim, 24, and Ju-Je Jo, 36, both of Ridgefield Park, N.J., were brokers who conspired with each other and others to bust out credit cards and engage in various fraud schemes. As part of their scheme, Kim and Jo sold a Confidential Informant ("CI") a fraudulently obtained Social Security card and explained to the CI how the scheme operated. Kim told the CI that he/she would fly to Los Angeles, California to obtain a driver's license after purchasing the Social Security card. Thereafter, the credit score related to this fraudulently obtained identity would be built up. Jo explained that the CI could, using the fraudulent identity, make between $30,000 and $40,000 from a credit card scheme; between $25,000 and $35,000 by obtaining a personal line of credit; and approximately $60,000 by engaging in a check cashing scheme. Kim explained that the CI could also use the credit cards to purchase high-end products such as Rolex, Chanel, and Louis Vuitton with credit cards obtained using the fraudulent identity. Kim told the CI that he/she could expect to make between approximately $80,000 and $150,000 through the scheme, and advised that it would cost him/her approximately $8,000 up front and $7,000 later for the social security card, driver's license, and credit build up. The CI paid the defendants $4,000 in cash for the social security card on August 20, 2010, and $3,000 in cash on August 31. On September 10, 2010, the defendants gave the CI a genuine social security card belonging to a person with a Korean name.
The defendants are charged with conspiring to unlawfully produce identification documents. This charge carries a maximum term of 15 years in prison and up to a $250,000 fine. The defendants are also charged with unlawfully selling a Social Security card, which carries a maximum potential penalty of five years in prison and up to a $250,000 fine.
United States v. Kang-Hyok Choi, Mag. No. 10-4163 (CCC)
Kang-Hyok Choi, 35, of Valley Stream, N.Y., fraudulently obtained four different identification cards and driver's licenses in three different Chinese names using legitimately issued but fraudulently obtained "586" Social Security numbers. In May of 2008, Choi allegedly murdered three individuals in Bergen County, N.J., and stole a number of credit cards from one of the victims. Choi then used the stolen credit cards to obtain approximately $100,000 and flew to Los Angeles using one of his Chinese aliases. Choi was arrested in Los Angeles on May 18, 2008, based on a New Jersey arrest warrant. At the time of his arrest, law enforcement officers seized approximately $88,000 in cash, $14,000 in casino chips, 27 credit cards, two driver's licenses, and two identification cards, none of which was in Choi's name.
Choi, who has been in state custody since his arrest, is now charged federally with one count of access device fraud, which carries a maximum term of 10 years in prison and up to a $250,000 fine.
United States v. Su-Chin Lee, Mag. No. 10-4164 (CCC)
Su-Chin Lee, 35, of Palisades Park, N.J., fraudulently obtained a driver's license from the Pennsylvania Department of Transportation in a Chinese person's name using a legitimately issued but fraudulently obtained "586" Social Security number, then used the fraudulently obtained identity to get credit cards. She got cash advances using the credit cards and made numerous fraudulent charges which she did not pay, causing losses to various credit card companies totaling approximately $49,000. She also obtained a $10,000 line of credit from a bank, which she withdrew in its entirety and failed to repay.
Lee is charged with one count of unlawfully producing an identity document, which carries a maximum term of 15 years in prison; one count of unlawful use of a social security card, a charge which carries a maximum term of five years in prison; and one count of access device fraud, which carries a maximum term of 10 years in prison. All three counts also carry a maximum $250,000 fine.
United States v. Yoon-Sang Kim, Mag. No. 10- 4166 (CCC)
Yoon-Sang Kim, 44, of Allendale, N.J., was arrested on August 17, 2010, in Fort Lee, N.J. while driving a vehicle registered to his wife. During a search of the vehicle, law enforcement officers found several counterfeit identifications with Kim's photograph in other people's names. Kim was arrested this morning on a federal Complaint which charges him with using one of these counterfeit identities, which corresponded to a photocopy of a "586" Social Security card found during a search of the vehicle, to open bank accounts and operate shell companies for the purpose of committing fraud. The shell companies used credit card machines to bust out credit cards. During the search of the vehicle, law enforcement officers also recovered photocopies of more than $220,000 in sales receipts from the shell companies operated by Kim, which were generated by the shell companies' credit card machines and which corresponded to the credit cards and photocopies of credit cards found during the search.
Kim is charged with one count of knowingly possessing, with the intent to use unlawfully, five or more identification or false identification documents, which carries a maximum term of five years in prison and a up to a $250,000 fine; and one count of access device fraud, which carries a maximum term of 10 years in prison and up to a $250,000 fine.
United States v. Chun-O Kim, Mag No. 10-4165 (CCC)
The Complaint charges five individuals: Chun-O Kim, 44, of Edgewater, N.J., the principal owner and operator of a purported general contracting company headquartered in Englewood, N.J.; Hosin Kim, 45, of Edgewater, the husband of defendant Chun-O Kim and the principal of a purported wholesale construction supply company operating out of Englewood; Nathan Buschman, 31, a branch manager at a bank in Edgewater; and Zakchary Benji, 28, a loan officer at a bank in Clifton, N.J.
Chun-O Kim conspired with others to make and use false, fictitious, and counterfeit documents to obtain lines of credit and commercial loans for herself and her co-conspirators. In furtherance of the scheme, Nathan Buschman and Zakchary Benji created false documents, including false reports of site visits, that created the illusion that the businesses seeking the loans existed and were legitimate. They processed lines of credit or loans knowing them to contain materially false statements and representations. Many of these lines of credit and loans were guaranteed by the United States Small Business Administration ("SBA"), a federal agency. The SBA provides assistance to small businesses by guaranteeing loans issued by certain banks. In total, defendant Chun-O Kim and her co-conspirators defrauded financial institutions in Bergen County, N.J., and elsewhere in excess of $1 million.
The defendants are charged with one count of fraud related to identification documents and one count of conspiracy to commit bank fraud, each of which carries a maximum potential penalty of five years in prison and up to a $250,000 fine.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; IRS - Criminal Investigations, under the direction of Special Agent in Charge Victor W. Lessoff; the Department of Homeland Security's Immigration and Customs Enforcement, under the direction of Special Agent in Charge Peter T. Edge; and the Small Business Administration Office of Inspector General, Eastern Region, under the direction of Special Agent in Charge Aaron Collins, for their work leading to today's charges. Fishman also singled out detectives in the Bergen County Prosecutor's Office—under the direction of Prosecutor John L. Molinelli and the Office's Chief of Detectives Steven Cucciniello—for their indispensable work in pursuing this investigation. He also thanked the Englewood Police Department, under the direction of Chief of Police Arthur O'Keefe, and the Fort Lee Police Department, under the direction of Chief of Police Thomas O. Ripoli, for their contributions.
The government is represented by Assistant United States Attorneys Anthony Moscato, Andre Espinosa, and Barbara Llanes of the U.S. Attorney's Office Criminal Division in Newark.
The charges and allegations contained in the Complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.