Sacramento Gang Member Sentenced to Five Years in Prison in Nationwide Bank Fraud Conspiracy

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced today that United States District Judge Frank C. Damrell Jr. sentenced Donald Taylor, 39, of Sacramento, to five years in prison for conspiracy to commit bank fraud. Taylor pleaded guilty on August 31, 2009.

This case was the product of an investigation by the U.S. Secret Service, the FBI, and police and sheriff's departments in several states. Taylor is the seventh defendant to be sentenced in the conspiracy. Assistant United States Attorney Matthew D. Segal prosecuted the case.

According to court documents, the scheme netted between $1 million and $2 million in losses to 37 financial institutions in late 2007 and early 2008. The organizers, operating from California, sent runners to Alabama, Arizona, California, Illinois, Indiana, Montana, New Mexico, Ohio, Oklahoma, and Texas to use so-called "prepaid" credit cards for cash advances at banks. Although the cards only had small amounts of money available, the runners would tell the bank tellers to call a toll-free number that was controlled by a co-schemer. The co-schemer would pose as a card services representative, state that there were thousands of dollars available on the card, and then instruct the teller on what buttons to press on the card terminal in order to make the transaction go through. The runner would then keep a portion of the funds for his or herself, and would remit a portion of the fraudulently obtained funds, typically half, to organizers in the Sacramento area.

On July 7, 2008, Secret Service, FBI, and police investigators executed search warrants at multiple locations in Sacramento. Evidence showed that Taylor was an “inactive” gang member who worked as middle management in the conspiracy. Taylor recruited runners and instructed them on how to conduct the fraud and send money to the Sacramento-based organizers. Taylor received a cut of the proceeds from his recruits’ transactions. Taylor’s recruits carried out or attempted approximately $450,000 in fraudulent advances.

In sentencing, Judge Damrell remarked on Taylor'’s long prior record of drunk driving, domestic violence, and other offenses. The judge remarked that Taylor had never served a substantial prison sentence, which may be why he never learned to be a responsible member of society or a positive example to Taylor’s five children.