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New York Man Sentenced to 51 Months in Prison for $200 Million Credit Card Fraud Scheme

January 28, 2016

Office Affiliation: The Office of Investigations

From the U.S. Attorney’s Office, District of New Jersey:

TRENTON, N.J. – A New York man was sentenced today to 51 months in prison for his role in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.

Shafique Ahmed, 55, of Floral Park, New York, previously pleaded guilty before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court to an information charging conspiracy to commit bank fraud. U.S. District Judge Anne E. Thompson imposed the sentence today in Trenton federal court.

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

Ahmed and others 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; finally, run up large loans.

The scope of the criminal fraud enterprise required Ahmed and his 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.

Ahmed admitted that he and others helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. He also admitted they knew the cards would be used fraudulently at businesses.

In addition to the prison term, Judge Thompson sentenced Ahmed to five years of supervised release and entered a forfeiture order for $1 million against him.

U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel, 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, Newark Field Office, under the direction of Acting Special Agent in Charge Kenneth Pleasant. 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 Criminal Division and Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit in Newark.

TRENTON, N.J. – A New York man was sentenced today to 51 months in prison for his role in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.

Shafique Ahmed, 55, of Floral Park, New York, previously pleaded guilty before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court to an information charging conspiracy to commit bank fraud. U.S. District Judge Anne E. Thompson imposed the sentence today in Trenton federal court.

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

Ahmed and others 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; finally, run up large loans.

The scope of the criminal fraud enterprise required Ahmed and his 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.

Ahmed admitted that he and others helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. He also admitted they knew the cards would be used fraudulently at businesses.

In addition to the prison term, Judge Thompson sentenced Ahmed to five years of supervised release and entered a forfeiture order for $1 million against him.

U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel, 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, Newark Field Office, under the direction of Acting Special Agent in Charge Kenneth Pleasant. 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 Criminal Division and Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit in Newark.

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