Former Fugitive Sentenced to Four Years in Prison for I.D. Theft, Credit Card Fraud

NEWARK—Former fugitive Luis Colon, a/k/a “Mike,” a/k/a “Junito,” was sentenced today to 48 months in prison for purchasing more than $90,000 in pesticides and pesticide applicators from wholesale suppliers using stolen credit card and debit card account numbers, U.S. Attorney Paul J. Fishman announced.

Colon, 29, previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to counts one and 19 of a superseding indictment charging him with conspiring to commit credit card fraud and aggravated identity theft.

According to documents filed in this case and statements made in court:

Colon and his co-conspirators obtained credit card and debit card numbers by calling individuals in Michigan and posing as a representative of a local utility company. They used the stolen credit card and debit card numbers to purchase pesticides and pesticide applicators from wholesalers outside New Jersey and directed the wholesalers to ship the products to various locations, including Colon’s home address in Union City and a co-conspirator’s address in West New York, New Jersey. Colon and his co-conspirators subsequently sold some of the products to a pesticide retailer in Philadelphia for cash. The stolen debit and credit card numbers were also used to purchase bus tickets, which were used by Colon and others to transport the pest control products to Philadelphia.

Colon fled after he was released on bail. After more than six months on the run, he was apprehended in Detroit on April 9, 2012, following a tip that resulted from a billboard fugitive announcement posted by the FBI.

In addition to the prison term, Judge Cavanaugh sentenced Colon to two years of supervised release and ordered him to pay restitution of $78,182 to the victims.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Kathleen P. O’Leary of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

Fort Washington Man Pleads Guilty in $163,000 Credit Card Fraud Scheme

GREENBELT, MD—Reginald Harold Jefferies, age 36, of Fort Washington, Maryland, pleaded guilty today to fraud in connection with access devices.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Postal Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service-Washington Division; Acting Special Agent in Charge Timothy P. Groh of the Federal Bureau of Investigation; and Chief Mark A. Magaw of the Prince George’s County Police Department.

“Today’s plea sends a clear message to individuals who commit credit card schemes that postal inspectors will vigorously pursue and bring to justice anyone who uses the U.S. mail to conduct criminal activities,” said Acting Inspector in Charge Peter R. Rendina, U.S. Postal Inspection Service-Washington Division. “We are grateful to the Federal Bureau of Investigation and Prince George’s County Police Department for their support with this case.”

According to his guilty plea, from February 20, 2008 to April 2, 2010, Jefferies obtained credit cards in his own name and added fictitious names as secondary users on the accounts. Jefferies then used the credit cards to order items from merchants on payment plans, frequently using the fictitious secondary names. Jefferies provided multiple different addresses to which the items should be shipped, including addresses for himself, his friends and relatives, and vacant addresses.

Pursuant to the payment plans, the merchants charged Jefferies’ credit cards in installments over a period of time. Merchants typically were able to charge Jefferies’ credit cards for the initial payments for the items Jefferies had purchased. Jefferies then reported to the credit card companies that his credit cards had been lost or stolen. The credit card companies closed those credit card accounts and issued Jefferies new credit card account numbers. When the merchants tried to charge Jefferies’ credit cards for the subsequent installment payments, they were unable to do so because those accounts had been closed. As a result, the merchants lost more than $163,376.18 on the balances due.

Jefferies maintained at least three eBay accounts, which he used to sell the items that he had fraudulently obtained from the merchants.

Law enforcement officers executed a search warrant at Jefferies’ residence on April 2, 2010, and seized more than 100 credit cards in Jefferies’ name or in the names of fictitious secondary users.

As part of his plea agreement, Jefferies agrees to the entry of an order of restitution and forfeiture of $163,376.18.

Jefferies faces a maximum sentence of 10 years in prison and a $250,000 fine. U.S. District Judge Deborah K. Chasanow scheduled his sentencing for December 3, 2012, at 1 p.m.

United States Attorney Rod J. Rosenstein commended the U.S. Postal Inspection Service-Washington Division, FBI, and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Mara Zusman Greenberg, who is prosecuting the case.

Elk Grove Man Charged with Debit Card Fraud

SACRAMENTO, CA—A federal grand jury returned a 23-count indictment today charging Mordechay Altit, aka Michael Altit, aka Anthony Altit, aka Tony Altit, 33, of Elk Grove, with mail fraud, wire fraud, access device fraud, and money laundering, associated with his fraudulent use of debit cards and merchant and terminal identification numbers, United States Attorney Benjamin B. Wagner announced.

According to the indictment, Altit applied for debit cards issued from banks or other providers of debit cards in his own name or using the names and Social Security numbers of other persons. Altit then used merchant and terminal identification numbers issued to merchants and businesses across the country to cause fraudulent refunds and credits to be placed on the debit cards he controlled. Before the businesses could rescind these transactions, Altit used the cards to spend and transfer the money. Altit attempted to have at least $450,000 in fraudulent merchant returns credited to his debit cards.

This case is the product of a joint investigation by the Federal Bureau of Investigation, the United States Secret Service, and the Internal Revenue Service-Criminal Division. Assistant United States Attorney Lee S. Bickley is prosecuting the case.

The maximum statutory penalty for a violation of mail fraud or wire fraud is 20 years and a $250,000 fine. The maximum statutory penalty for use of a counterfeit or unauthorized access devices is 10 years and a $250,000 fine. The maximum statutory penalty for effecting a transaction with one or more access devices issued to another person is 15 years and a $250,000 fine. The maximum statutory penalty for a violation of money laundering is 20 years and a $500,000 fine. The actual sentence, if convicted, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Federal Grand Jury Indicts Five in Connection with Credit Card Fraud Scheme Involving the City of Eagle Pass

This morning, a federal grand jury in Del Rio returned an indictment charging five Eagle Pass residents, including former city of Eagle Pass Department of Public Works employee Edgar Aguilar, in connection with an estimated $70,000 credit card fraud scheme, announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, and Eagle Pass Police Chief Tony Castañeda.

The five-count indictment charges the 27-year-old Aguilar, 25-year-old Rene Castillo, 43-year-old Armando Ojeda Nuncio, 39-year-old Ricardo Hernandez-Espinoza, and 30-year-old Elizabeth Vivian with one count of conspiracy to commit credit card fraud. The indictment also charges all of the defendants, with the exception of Vivian, with one substantive count of credit card fraud.

According to the indictment, during 2011, Edgar Aguilar obtained five city of Eagle Pass-owned “Fuelman” credit cards designated for fuel purchases for Public Works department vehicles and distributed them to his co-defendants. The defendants then used those cards to purchase fuel for their own vehicles and to purchase fuel for others at the city’s expense. In some instances, defendants charged individuals a reduced rate for fuel purchased using the city’s credit card and then pocketed the cash.

Upon conviction, each defendant faces up to five years in federal prison and a maximum $250,000 fine on the conspiracy charge. Aguilar, Castillo, Ojeda, and Hernandez-Espinosa are also subject to a maximum 10 years in federal prison and a maximum $250,000 fine upon conviction of the substantive credit card fraud charge. The government is also seeking to have the defendants repay the city of Eagle Pass for the cost of the misappropriated fuel.

This ongoing joint investigation is being conducted by agents with the Federal Bureau of Investigation together with investigators from the Eagle Pass Police Department. Assistant United States Attorney Don McCune is prosecuting this case on behalf of the government.

An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.

Hacker Sentenced to Seven Years in Prison for Role in Two Hacking Schemes Involving a Total of More Than 240,000 Stolen Credit Card Numbers

WASHINGTON – Aleksandr Suvorov, of Estonia, was sentenced today to seven years in prison for his role in two separate hacking schemes involving a total of more than 240,000 stolen credit card numbers.

 The sentence was announced today by Assistant Attorney General Lanny A. Breuer for the Criminal Division, U.S. Attorney for the Eastern District of New York Loretta E. Lynch, U.S. Attorney for the Southern District of California Laura E. Duffy and Director of the U.S. Secret Service Mark Sullivan.

 Suvorov, 28, was sentenced by U.S. District Judge Sandra J. Feuerstein in Central Islip, N.Y.   Suvorov was an accomplice to Albert Gonzalez, one of the most prolific identity thieves ever prosecuted by the U.S. government.

 Suvorov pleaded guilty in May 2009 to a wire fraud conspiracy charge, filed in the Eastern District of New York, for hacking into the national restaurant chain Dave & Buster’s and stealing more than 80,000 credit card numbers.  In addition, Suvorov pleaded guilty in November 2011 to a trafficking in unauthorized access devices charge, originally filed in the Southern District of California, related to the sale of more than 160,000 stolen credit card numbers to an undercover agent with the U.S. Secret Service.  The cases were consolidated in the Eastern District of New York for sentencing.  In addition to his prison term, Suvorov was ordered to pay $675,000 in restitution and to satisfy a $300,000 asset forfeiture judgment stemming from the New York charges.

 “Mr. Suvorov participated in a scheme to sell thousands of credit card numbers stolen from unsuspecting consumers,” said Assistant Attorney General Breuer.  “Computer hackers like Mr. Suvorov victimize businesses and individuals, posing a serious threat to their financial security.  Today’s sentence sends a clear message that cyber criminals operating abroad will suffer severe consequences for their crimes.”

 “Suvorov reached across an ocean to victimize thousands of Americans,” said U.S. Attorney Lynch.  “That ocean was no protection from the reach of U.S. law enforcement, whose coordinated efforts put a stop to Suvorov and his cohorts’ criminal scheme.  He will now serve his sentence in the country of his victims.  Computer hackers and identity thieves who prey on innocent American consumers, businesses and financial institutions will find no refuge from U.S. criminal justice in any corner of the globe.”

 “This international criminal enterprise thought that they could traffic in stolen credit card information from abroad, but due to the coordinated efforts of the United States Secret Service and the Justice Department, they were wrong,” said U.S. Attorney Duffy.  “The agents of the San Diego field office of the United States Secret Service are to be commended for their investigative work in dismantling this organization.”

 “This case demonstrates the potential for criminals to inflict significant damage to our nation’s financial sector, but this investigation and the resulting sentences should serve as a warning to cyber criminals that law enforcement will continue to pursue them wherever they are,” said U.S. Secret Service Director Sullivan.  “The Secret Service, in conjunction with its many law enforcement partners across the United States and around the world, continues to successfully combat these crimes by adapting our investigative methodologies.  We realize our success in this investigation is due to the cooperation of these partners in more than a dozen international law enforcement agencies.”

 According to court documents, in the New York case, Suvorov, Albert Gonzalez and a third co-conspirator devised a scheme to gain unauthorized access into the computer systems of Dave & Buster’s Inc. for the purposes of installing malicious software and extracting credit card information of the Dave & Buster’s patrons.  Gonzalez, who was in Miami, sent the software, known as a “packet sniffer,” to a co-conspirator in Ukraine.  A packet sniffer is malicious software designed, in this case, to collect credit card information.  The co-conspirator in Ukraine then provided the packet sniffer to Suvorov in Estonia.  Suvorov, working with another individual, gained unauthorized access to 11 Dave & Buster’s restaurants throughout the United States, one of which was in Islandia, N.Y., and installed the packet sniffer.  Suvorov and his co-conspirators ultimately obtained data from 81,005 credit cards.

 Gonzalez was sentenced in March 2010 to 20 years in prison for his role in the Dave & Buster’s hack, as well as hacks into a major payment processor and several retail networks.  The other co-conspirator was arrested in Turkey on related identity theft charges, and was sentenced there to 30 years in prison. 

 In the California case, Suvorov and an accomplice conspired to sell more than 160,000 stolen credit card numbers to a buyer in San Diego who was an undercover agent with the U.S. Secret Service.  Suvorov provided the stolen credit card numbers to an accomplice, who in turn sold them to the undercover agent.

 The New York case was prosecuted by Assistant U.S. Attorney William Campos of the Eastern District of New York and Trial Attorneys James Silver and Evan Williams of the Criminal Division’s Computer Crime & Intellectual Property Section (CCIPS) and was investigated by the U.S. Secret Service Criminal Investigative Division Cyber Investigations Branch.  Former CCIPS Assistant Deputy Chief Howard Cox and Senior Counsel Kimberly Peretti also contributed significantly to the investigation and prosecution of this case.  The California case was prosecuted by Assistant U.S. Attorney Orlando Gutierrez of the Southern District of California and investigated by the U.S. Secret Service San Diego Field Office.  The Office of International Affairs in the Criminal Division provided significant assistance.

Lottery Fraud: If You Have To Pay, You Didn’t Win

The following post appears courtesy of the Consumer Protection Branch of the Civil Division.

The pitch is simple.  You receive a call from a foreign lottery announcing that you have won money, a car and other prizes.  The caller tells you that you entered a contest: a form you submitted in the mail, or on the Internet, or while shopping.  You have won, but you must pay taxes, insurance and other up-front fees in order to get your prize into the United States.  Despite several payments totaling thousands of dollars, you never receive the prizes promised to you.

According to the U.S. Postal Inspection Service, Americans have lost $42 million to fraudulent foreign lotteries and sweepstakes.  The majority of victims are elderly.  In addition to losing their life savings, victims are duped into giving fraudsters their Social Security numbers and financial accounts.  Fraudsters convince victims to send money quickly, and they warn victims not to discuss their winnings with family, friends or professional advisors.

The Department of Justice Consumer Protection Branch is working with its investigative partners to prosecute lottery fraudsters.  This effort has identified common signs of lottery fraud that you can use to protect yourself and loved ones.

 •You should not have to pay fees or taxes in advance to receive lottery or sweepstakes winnings.  Beware of checks or wire transfers sent to you by the lottery.  The fraudsters will tell you to cash these payments and forward the money, but after you have sent this money, the payment you originally received will bounce.

 •Lottery fraudsters use technology to mask their telephone number.  Your caller-ID may identify a call as coming from the United States that is actually coming from a foreign country.

 •Lottery fraudsters impersonate officials from federal agencies in order to convince victims that the scam is legitimate.  The United States government does not participate in the distribution of prize money from lotteries and sweepstakes.

 •You should never give your Social Security number, bank account number or any other personal identifying information to these callers.  Fraudsters promise to use this information to pay the “fees” for your prize, or they offer to pay off your debts.  In reality, they use this information to steal your identity and your money.

 •Lottery fraudsters are particularly successful with victims who live alone or suffer cognitive impairment.  Fraudsters befriend victims to create trust and to convince victims to hide the payments from family members.   

Additional information on this scam is provided by the U.S. Postal Inspection service at www.deliveringtrust.com, and by the Federal Trade Commission at www.ftc.gov/bcp/edu/microsites/phonefraud/sweepstakes.shtml.