Two Plead Guilty in International $200 Million Credit Card Fraud Conspiracy
|U.S. Attorney’s Office September 17, 2013|
NEWARK, NJ—A New York man today admitted his role in one of the largest credit card fraud schemes ever charged by the Justice Department following the guilty plea of another conspirator last week, New Jersey U.S. Attorney Paul J. Fishman announced.
Qaiser Khan, 49, of Valley Stream, New York, pleaded guilty today before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court. Khan pleaded guilty to an information charging him with one count of conspiracy to commit bank fraud. Shafique Ahmed, 52, of Floral Park, New York, pleaded guilty before U.S. Magistrate Judge Cathy L. Waldor in Newark on September 11, 2013, to an information charging conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:
Khan and Ahmed 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 Khan, Ahmed, and their 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.
Khan and Ahmed admitted they helped obtain credit cards in the name of third parties—many of which were fictional—and 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.
The charges to which Khan and Ahmed pleaded guilty carry a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gain or loss caused by the offense.
The defendants are both scheduled for sentencing before U.S. District Judge Anne E. Thompson as follows: Khan on January 6, 2014, and Ahmed on October 30, 2013.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to the guilty pleas, as well as postal inspectors, under the direction of Postal Inspector in Charge Marie L. Kelokates, and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola. 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 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 is 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.