Feds: 18 Charged in $200 Million Global Credit Card Fraud


NEWARK, N.J. (AP) - Eighteen people have been charged in what may be one of the nation's largest credit card fraud rings, a sprawling international scam that duped credit rating agencies and used thousands of fake identities to steal at least $200 million, federal authorities said Tuesday.

The elaborate scheme involved improving fake cardholders' credit scores, allowing the scammers to borrow more money that they never repaid, investigators said.

"The accused availed themselves of a virtual cafeteria of sophisticated frauds and schemes, whose main menu items were greed and deceit," said David Velazquez, assistant special agent in charge of the FBI's Newark field office.

The U.S. attorney in Newark, Paul Fishman, described an intricate Jersey City-based con that began in 2007, operated in at least 28 states and wired money to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan.

The group used at least 7,000 fake identities to obtain more than 25,000 credit cards, Fishman said. Investigators documented $200 million in losses, but the figure could rise, he said.

Feds: 18 charged in $200 million global credit card fraud"Through their greed and arrogance," Fishman said, the people arrested harm credit card companies, consumers and "the rest of us who have to deal with increased interest rates and fees because of the money sucked out of the system by criminals."

Participants in the scam set up more than 1,800 mailing addresses, creating fake utility bills and other documents to provide credit card companies with what appeared to be legitimate addresses, investigators said. Once they obtained the cards, they started making small charges and paying off the cards to raise their credit limits, authorities said.

They then sent fake reports to credit rating agencies, making it appear that cardholders had paid off debts, setting the stage for sterling credit ratings and high credit limits, investigators said.

Fishman said once the credit limits were raised, participants would take out loans or max out the credit cards and not repay the debts.

He said those who obtained credit cards often added co-conspirators and sham businesses as authorized users, who could piggyback on high credit ratings and open other fraudulent accounts with high credit limits.

The group created at least 80 sham businesses that accepted credit card payments, Fishman said. It would run the fraudulently obtained credit cards through the machines, keeping the money, he said.

In one example, prosecutors allege a defendant used a 6-year-old boy's Social Security number to obtain a fake utility bill used to open credit card accounts.

The scheme funded a lavish lifestyle for the accused, including spa treatments, electronics, luxury cars and millions of dollars of gold, Fishman said. In one raid, authorities said they found $68,000 stashed in an oven.

Authorities allege one man withdrew and wired $1.5 million from personal accounts despite not having a job. They allege another defendant was linked to 12 false identities, stole $2.5 million from 464 credit cards and received $18,000 from two sham companies.

Three jewelry stores within blocks of each other in a heavily Indian section of Jersey City were closed Tuesday, and their inventory was seized. All had signs advertising gold jewelry. Their metal security gates were shut, and they were guarded by FBI agents.

Fourteen defendants appeared before a federal judge on Tuesday afternoon. Lawyers said one man was a taxi driver, another a limo driver. Most own property in New Jersey or New York and said they were U.S. citizens. Eight were released, and six remained in custody ahead of a Friday bail hearing.

Authorities said many of the defendants had family ties, including a father and son.

Attorney Angelo Servidio, representing defendant Tarsem Lal, said what authorities had done was merely make allegations.

"The fact that this is the biggest fraud case brought by this office doesn't mean my client is involved in it," he said.

Four of the defendants named in Tuesday's indictment were arrested previously, and three have pleaded guilty. Others haven't been charged, and the investigation is ongoing, Fishman said.

Each of the defendants was charged with one count of bank fraud and could face up to 30 years in prison and a $1 million fine if convicted.


Associated Press writer Samantha Henry contributed to this report from Jersey City.

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Yet another blatant example of our incompetant population of regulatory officials and politicians....we just keep on adding things to our societies without projecting potential consequences....our biggest ones today are immigration, way too much money under the control of wall street, insurance companies, the food industry, and government itself. This is a people thing....and unfortunately, the majority of people suffer from this lack of foresight. this is incompetance at the grandest of scales. Well, except for the internet....absolutely no safeguards were planned for this....without the internet, these people in the article could not have done this....

February 19 2013 at 8:51 AM Report abuse rate up rate down Reply

Why would ANY of the defendants be released, much less EIGHT of 14??

February 10 2013 at 11:31 AM Report abuse rate up rate down Reply

here is a TIP for all consumers:
Place a CONSUMER FREEZE on your credit files online by visiting. EQUIFAX.com,EXPERIAN.com and TRANSUNION.com--This will prevent anyone from obtaining credit cards or instant credit under your name.
They will inturn issue you a PIN NUMBER (DO NOT LOSE THIS PIN NUMBER!!!) it will allow you to place temporary lifts on your credit files should you need to apply for credit,there is a 5.00 dollar charge per lift.
You may also place a consumer statement on file stating that no credit should be issued unless you are contacted first by phone (place your phone number). THERE IS NO CHARGE TO PLACE A FREEZE IT IS 100% FREE There is the 5.00 dollar fee should you need to lift the freeze but its well worth the protection-

February 10 2013 at 10:31 AM Report abuse rate up rate down Reply
1 reply to joeluisbatista's comment

Good tips. The only amendment I would make is "PUT THEM ALL IN JAIL FOR 30 YEARS!!" The stated maximum in the last line of the article.

February 10 2013 at 11:28 AM Report abuse rate up rate down Reply

Where is the insurance companies for the card companies? We have to pay insurance. I will not pay for stupidity.

February 10 2013 at 10:19 AM Report abuse rate up rate down Reply

The banks have no problem enlisting the government to protect their interests. Consumers unfortunately can't do the same. Because we are sheep.

February 10 2013 at 9:08 AM Report abuse +1 rate up rate down Reply

yet the crooks on Wallstreet still continue their fraud on a grand scale with impunity.

February 10 2013 at 9:02 AM Report abuse +2 rate up rate down Reply

Here The Problem for them

They got away with it for so Long, Then Like all POS Crooks, They keep it up

Bet they hardy get no Time

February 10 2013 at 8:43 AM Report abuse +2 rate up rate down Reply

EBT cards are being used by drug abusers everyday to buy their drugs. They give their dealer or an accomplice $200.00 worth of food for a $100.00 worth of drugs. Guess whose footing the bill? Right, the tax payers. We need to drug test the entitlement people, or at least make them produce a picture ID which could be taken when they apply. I would say this scam cost more than two hundred million. Our government could do alot more to prevent these scams. Instead their going to let another 11 million illegal immigrants into our country, which I would guess 90% will be in the taxpayers pocket one way or another. The other 10% will be taking your job for half the wages. Our government needs to be fired. Their not doing their job. All they do is blame it on the dems or reps, playing us in the middle against each other and their laughing a the way to the bank with our money and the outside interst money. Basically we're being sold out byn ouir own gov. Obama?

February 10 2013 at 7:54 AM Report abuse +4 rate up rate down Reply
1 reply to jeniusboy58's comment

These thugs from India only get five years but we spend years trying to clear our credit reports. FRB needs to do a better job in keeping banks operations in USA

Dadlani was arrested along with Nasreen Akhtar, 37, of Jersey City; Babar Quereshi, 59, Sat Verma, 60, Vijay Verma, 45, Tarsem Lal, 74, all of Iselin; Vernina Adams, 31 of Philadelphia; Muhammad Naveed, 35 of Flushing; Raghbir Singh, 57, and Ijaz Butt, 53, both of Hicksville; Shahid Raza, 44, Qaiser Khan, 48, and Habib Chaudhary, 45, all of Valley Stream, NY; Azhar Ikram, 39 of Howard Beach, NY; Shafique Ahmed, 52 of Floral Park; Mohammad Khan, 48, and Khawaja Ikram of Staten Island; and Muhammad Shafiq, 38 of Bellerose, NY, authorities reported.

February 10 2013 at 9:01 AM Report abuse +1 rate up rate down Reply


February 10 2013 at 6:50 AM Report abuse rate up rate down Reply

This is because there are no good methods of checks and balances. The banks ought to have known better. But, I'm sure that the banks were so eager to sign people up for credit cards they still haven't put some serious checks and balances in place.

The government has tightened up the way you apply for a mortgage or a re-finance. Now, they ought to do the same for the credit cards. While these loses are deductible for the banks, it is ultimately the consumer who will pay more as the banks pass the cost of these defaulted loan onto them.

Further, it is the US taxpayer who is called to bail out the banks when they fail!

February 10 2013 at 5:18 AM Report abuse +4 rate up rate down Reply