Nine residents from Jersey City or Secaucus were among a dozen people rounded up in an “elaborate” money laundering/credit card fraud scheme, Acting Attorney General John Jay Hoffman announced.
By John Heinis/Hudson County View
The charges include first-degree money laundering and other crimes in a joint federal and state investigation targeting an elaborate fraud scheme in which the defendants allegedly used fake identities to obtain credit cards and open bank accounts which they used to steal approximately $3 million from various banks, officials said.
Eleven defendants have been arrested and one remains a fugitive.
Those arrested are as follows:
Naim Tahir, 47, of Clark
Hassan Shahbaz, 42, of Jersey City
Aqeel Ahmed, 60, of Secaucus
Shama Munir, 49, of Secaucus
Faisal Mushtaq, 37, of Secaucus
Mohammad Shakeel, 46, of Jersey City
Muhammad Farooq Bhatti, 64, of Jersey City
Rilvan Junaid, 49, of Spring Valley, N.Y.
Shakeela Ahmed, 56, of Secaucus
Aqeel Sheikh, 54, of Secaucus
Mohamed Khan, 53, of Piscataway
Huda Ahmed, 27, of Secaucus
The defendants allegedly created “synthetic” identities by pairing real Social Security numbers with fictitious names and birth dates, using them to open numerous checking and credit card accounts. They also allegedly opened the accounts online so as to avoid face-to-face interaction with the financial institutions.
Bad checks were deposited into the bank accounts so that the accounts could be used to make payments on the credit cards, which temporarily inflated the lines of credit on the cards, authorities said.
Furthermore, funds were withdrawn from the bank accounts via ATM and U.S. Postal Money Order Purchases before the bad checks were discovered, according to court documents.
It is alleged that the defendants ultimately “busted out” the credit cards by running up the unpaid balances until they reached or exceeded the credit limits. The scheme included a group of “merchants,” who in many cases allegedly ran shell businesses set up solely for the purpose of participating in this fraud.
The merchants allegedly swiped the fraudulent credit cards using point of sale terminals and received reimbursement from credit card processing companies via wire transfer, while never actually providing any merchandise or services. The ring members then allegedly split the proceeds.
The bank accounts of the shell companies set up by the merchants were also allegedly used to launder the proceeds of the scheme, with checks being written from one company to another as if they were conducting business, according to the state AG’s Office.
“While the credit card holders, businesses and purchases in this scheme were fictitious, the losses suffered by the banks were very real and totaled an alarming $3 million,” Hoffman said in a statement.
“We’ll remain extremely vigilant on this front, because financial fraud on this scale hurts commerce and can bankroll other crimes. Our investigation is ongoing, but we’re confident that with these arrests, we’ve dismantled this prolific theft ring in New Jersey.”
All were arrested yesterday, with the exception of Shakeel, who was arrested early this morning at John F. Kennedy International Airport, Junaid – who surrendered to investigators this morning – and Khan, who is being sought on an arrest warrant as a fugitive.
The arrested defendants are being lodged in the Union County Jail with bail for each set at $1 million, with no 10 percent option.
Tahir allegedly was primarily responsible for creating the synthetic identities and applying for the bank accounts and credit cards used in the fraud, officials said.
Shahbaz is the owner of USA United Trading, a business in Jersey City that he allegedly opened for the sole purpose of defrauding financial institutions.
It is alleged that USA United Trading conducted approximately $1.6 million in fraudulent credit card transactions over the past 22 months. USA United Trading held itself out as a carpet retailer, with a store front at 150 Monticello Avenue in Jersey City that had several rolled up carpets in the window.
Investigators executed search warrants yesterday and seized evidence at four locations where members of the ring lived or where the ring had “drop addresses” used for mailings in the scheme.
They also seized approximately $150,000 in cash and multiple bank accounts controlled by ring members containing approximately $320,000. The state is awaiting information from banks on funds contained in additional accounts that were seized in the investigation.
The charge of first-degree money laundering carries a sentence of 10 to 20 years in state prison, including a mandatory minimum term of parole ineligibility of one-third to one-half of the sentence imposed.
It also carries a fine of up to $500,000 and an additional anti-money laundering profiteering penalty of up to $500,000 or three times the value of any property involved.
Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000, while third-degree charges carry a sentence of three to five years in state prison and a fine of up to $15,000.
The takedown of this fraud ring is the result of an ongoing joint investigation by the New Jersey Attorney General’s Office, U.S. Postal Inspection Service, ICE Homeland Security Investigations, New Jersey Office of Homeland Security & Preparedness, U.S. Social Security Administration Office of Inspector General and New Jersey Department of the Treasury’s Office of Criminal Investigation.
Additionally, they were assisted by the Hudson County Prosecutor’s Office, Union County Sheriff’s Department, Clark Police Department, Secaucus Police Department and Jersey City Police Department.