Second Conspirator Sentenced in Scheme to Fraudulently Obtain Over $1.399 Million from Baltimore Housing Authority Account
Defendant Recruited Others to Drain Stolen Funds into Cash
|U.S. Attorney’s Office November 01, 2012|
BALTIMORE—U.S. District Judge William D. Quarles, Jr. sentenced Tyeast Brown, a/k/a Peaches, age 41, of Washington, D.C., today to three years in prison, followed by four years of supervised release, for conspiring to commit bank fraud in connection with a scheme to steal over $1.399 million from a Housing Authority of Baltimore City (HABC) bank account in just a few months. Judge Quarles also entered an order requiring Brown to forfeit and pay restitution of at least $1,399,700.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to her guilty plea, Brown conspired with others in a scheme to steal money from the HABC. With Brown’s knowledge, in May 2010, co-defendant William Darden used co-defendant Keith Daughtry’s identity to obtain a fraudulent driver’s license in Daughtry’s name but bearing Darden’s photograph. The fraudulent driver’s license was made so that if law enforcement were to locate Daughtry through the fraudulent license’s use, Daughtry could claim that his identity had been stolen.
On May 25, 2010, Darden used the fraudulent driver’s license to open a bank account for an entity called Keith Daughtry Contracting LLC. Shortly thereafter, substantial amounts of funds illegally diverted by Brown’s conspirators from a HABC bank account were electronically transferred into the Daughtry LLC bank account, even though Daughtry LLC had never provided any services to the HABC requiring compensation. Investigators have determined that the conspirators were responsible for transferring at least $1,399,700 stolen from HABC’s account into Daughtry LLC’s account between July and September 2010.
The conspirators then drained the stolen funds from Daughtry LLC’s account by electronic transfers of funds onto debit cards in other individuals’ names, at least one of whose identity had been stolen; electronic transfers into accounts at other banks; and through in-person cash withdrawals from Daughtry LLC bank accounts and from ATMs in the Washington, D.C. area.
With respect to the first means of draining the stolen funds through debit cards, Brown recruited a number of individuals, mostly young women, who during the summer of 2010 opened debit cards in their own names. Several hundreds of thousands of dollars in stolen HABC funds were transferred from the Daughtry LLC account onto these debit cards. Brown then directed her recruits to withdraw most of these funds off the debit cards through cash withdrawals and demanded that the recruits provide her with this cash, though she permitted them to keep amounts for themselves. Brown, in turn, divided the cash with her conspirators. Brown periodically checked the account balances on the debit cards in her recruits’ names.
Brown admits that she is responsible for over $1 million in losses as a result of her participation in the conspiracy.
Keith Eugene Daughtry, age 50, and William Darden, age 45, both of Washington, D.C., pleaded guilty to their role in the scheme. Daughtry was sentenced to 41 months in prison and ordered to forfeit and pay restitution of $1,399,700. Darden is awaiting sentencing.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked the FBI for its work in the investigation and praised Assistant U.S. Attorneys Sujit Raman and Gregory R. Bockin, who prosecuted the case.