Two New York Men Sentenced to Prison for Roles in International $200 Million Credit Card Fraud Conspiracy
TRENTON, NJ—Two Staten Island, New York, men were sentenced today for their roles in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.
Khawaja Ikram, 43, and Mohammad Khan, 51, were sentenced to 25 and 12 months in prison, respectively. Ikram previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of conspiracy to commit bank fraud. Khan previously pleaded guilty before U.S. Magistrate Judge Madeline C. Arleo to an information charging him with conspiracy to defraud the United States. Judge Thompson imposed both sentences today in Trenton federal court.
According to documents filed in this case and statements made in court:
Ikram and Khan were 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. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.
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 Ikram, Khan 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.
Ikram and Khan admitted they helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. They also admitted they knew the cards would be used fraudulently at businesses, with Khan admitting to personally using the cards.
In addition to the prison terms, Judge Thompson ordered Ikram and Khan to serve five and three years of supervised release, respectively. Ikram was also fined $10,000.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors, under the direction of Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli, for the investigation leading to today’s sentencing. He also thanked the U.S. Social Security Administration for its role in the investigation.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Ikram: Neil G. Duffy III Esq., Union, New Jersey
Khan: Stephan Mahler Esq., Kew Gardens, New York