Two North Carolina Men Sentenced to Prison for Conspiracy and Identity Theft

A resident of Raleigh, North Carolina, was sentenced to prison today for his role in a conspiracy to file false claims and for aggravated identity theft, Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina announced.

Christian Rhodes, 39, was sentenced to serve 144 months in prison to be followed by three years of supervised release and ordered to pay $1,036,918 in restitution to the Internal Revenue Service (IRS).  Rhodes pleaded guilty on May 11 to one count of conspiracy to file false claims and one count of aggravated identity theft.

“Today’s sentence reflects the heavy price that will be paid by those individuals who steal identities and file fraudulent claims for refunds to line their own pockets,” said Acting Assistant Attorney General Ciraolo.  “The department remains committed to working with the IRS and other federal and state law enforcement agencies to identify, prosecute and seek lengthy incarceration of these offenders.”

 On Aug. 4, 2015, Senior U.S. District Court Judge James C. Fox of the Eastern District of North Carolina sentenced Rhodes’ brother and co-conspirator, Rodney Wright, 33, to serve 15 months in prison to be followed by three years of supervised release, and ordered him to pay $86,447 in restitution.  Wright pleaded guilty to one count of conspiracy to file false claims.

According to court documents, Rhodes, Wright and others conspired to prepare and file false income tax returns with the IRS.  Wright obtained personal identification information of taxpayers and provided this information to Rhodes so that Rhodes, and to a more limited degree Wright, could prepare and file false tax returns that fraudulently claimed refunds.  Rhodes also obtained the personal information of taxpayers from other sources, which he used to prepare and file false tax returns.  The false information on the returns included deductions, credits, employers, wages and withholdings.  Rhodes and Wright charged taxpayers a fee for preparing false returns.

Rhodes also recruited his sister, Virginia Parks-Bert, and Kellian James to join his scheme.  Parks-Bert and James pleaded guilty to conspiracy to file false claims with the IRS in the Eastern District of Virginia and were sentenced to serve 42 months and 15 months in prison, respectively.  Rhodes taught Parks-Bert to file false tax returns and explained how to make it more difficult for the IRS to trace false returns back to her.  Rhodes introduced James and Parks-Bert to each other so that James could recruit clients and Parks-Bert could prepare and file more tax returns.  The total intended tax loss of the fraudulent claims filed in this conspiracy was more than $3 million.

Rhodes also filed false claims for refund using stolen identities.  He used the identification of clients from previous tax years to file false tax returns in their names and then kept the entire fraudulently obtained refund.  Rhodes deposited the fraudulently obtained refunds into his own bank accounts or the accounts of third parties, including family members and girlfriends.  He then withdrew cash from his accounts or directed the accountholders to withdraw the funds and deliver them to him.

Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Susan Menzer of the Eastern District of North Carolina and Trial Attorneys Lauren M. Castaldi and Rebecca Perlmutter of the Tax Division, who prosecuted the case.

Identity Theft That Lasted Decades

Living a Lie

When Florida Highway Patrol Trooper Richard Blanco—a member of the FBI’s Joint Terrorism Task Force (JTTF) in Jacksonville—interviewed an individual suspected of driver’s license fraud in 2011, he wasn’t initially sure if the man was the victim or the perpetrator of identity theft.

That’s because the man—now imprisoned and officially known as John Doe—had a stack of government-issued identification acquired during the 22 years he had been using a living victim’s identity. That included a passport, driver’s license, birth certificate, Social Security card, and identification allowing him unescorted access to a port and military installation.

“He was extremely convincing that he was the victim,” said Blanco, a veteran trooper with more than 30 years on the force. “When you have 20 forms of identification and it’s in your possession,” Blanco explained, “it’s hard to not believe you are the person you say you are.”

But John Doe was indeed an imposter, and while he was living under another man’s name, the real victim was living a nightmare. It all started in 1989 when the victim’s car was broken into and his wallet was stolen. His identity had been compromised.

John Doe began using the victim’s name, even when he went to prison for aggravated battery. As a result, Blanco said, “if you run John Doe’s fingerprints, even today, they will come back with the victim’s name.”

When the victim, a Miami resident, applied to become a corrections officer, he had to explain why his records showed a felony conviction. He urged officials to compare his fingerprints to those of John Doe’s. When the victim applied for a passport, he was denied because the passport office claimed he already had one—the one that John Doe had applied for and received.

When Blanco was able to talk with the real victim, he heard two decades worth of frustration. The victim had filed a police report years before, but John Doe had never been caught or stopped. Blanco remembers the victim telling him, “This guy has been living my identity. He’s gotten my license suspended and he’s had kids in my name.”

When Blanco realized that he was dealing with a massive and long-running case of identity fraud, John Doe was arrested. The JTTF opened an investigation, and John Doe was eventually indicted federally on numerous counts of aggravated identity theft and fraud.

JTTF investigators had to rule out any threat to national security, because John Doe had access to the Mayport Naval Station as well as JaxPort, the Jacksonville Port Authority. Although he was just working at those locations, Special Agent Paxton Stelly, who supervises Jacksonville’s JTTF, pointed out that John Doe had passed the background checks required to gain access there. “He appears to have manipulated the system with ease,” Stelly said.

Last month a jury convicted John Doe—who continues to insist he is the real victim in the case—and sentenced him to 10 years in prison. Despite DNA testing and a thorough investigation, his real identity remains a mystery.

“It will continue to be a mystery unless he makes an admission to us,” Blanco said, adding, “I don’t know what he’s going to do when he gets out of prison, because the man doesn’t have an identity.”

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.

Former Bank Manager Sentenced for Identity Theft/Bank Fraud

EUGENE, OR—Randy Arlan Mainwaring, 41, former manager of the Thurston Branch of Key Bank in Springfield, Oregon, was sentenced to serve 30 months in federal prison yesterday by U.S. District Judge Michael R. Hogan for identity theft and bank fraud. He pled guilty to both offenses on May 7, 2012

In pleading guilty, Mainwaring admitted that on January 29, 2007, while serving as the manager of the Thurston Branch of Key Bank, with the intent to deceive Key Bank, he possessed and used a Social Security account Nnumber of another actual person, a previous Key Bank account holder, to open up a bank account at Key Bank without that person’s authorization. He also admitted that on May 10, 2007, while continuing to serve as the manager of the Thurston Branch of Key Bank, he transferred to his personal e-mail account the names, dates of birth, and Social Security account numbers of 2,937 present or previous account holders of Key Bank. He admitted that he transferred and possessed these means of identification without authorization of Key Bank or the account holders and with the intent to use them for his personal financial gain. Mainwaring also admitted that in August 2010 he attempted to obstruct justice with respect to the prosecution of the offense by threatening and intimidating a witness to the offense. Mainwaring’s sentence was enhanced because the offense involved more than 250 victims, he used personally identifiable information of another person to open up a bank account without authorization, he abused a position of trust, and he obstructed justice by threatening and intimidating a witness.

As a result of Mainwaring’s conduct, Key Bank incurred $44,937.66 in expenses, including credit monitoring services to the affected account holders. Mainwaring was ordered to pay restitution in that amount to Key Bank.

The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Sean B. Hoar.