12 New Jersey Residents Charged in $3 Million SSN Misuse, Money Laundering Scheme

Wednesday, December 9, 2015
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From the New Jersey Office of the Attorney General:

TRENTON – Acting Attorney General John J. Hoffman today announced that 12 people have been charged with 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 fictitious identities to obtain credit cards and open bank accounts which they used to steal approximately $3 million from various banks. Eleven defendants have been arrested and one remains a fugitive.

The takedown of this fraud ring in New Jersey 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. 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.

The defendants, many of whom live in Secaucus and Jersey City, 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 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. In addition, funds were withdrawn from the bank accounts via ATM and U.S. Postal Money Order Purchases before the bad checks were discovered. 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 allegedly split the proceeds. The bank accounts of the shell companies set up by the merchants also allegedly were used to launder the proceeds of the scheme, with checks being written from one company to another as if they were conducting business.

“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,” said New Jersey Acting Attorney General John J. Hoffman. “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.”

“Between 2012 and 2015, these defendants allegedly obtained hundreds of credit cards with fake identities, engaging in millions of dollars in phony transactions at a network of shell businesses, most of which were created solely to commit this fraud,” said Director Elie Honig of the New Jersey Division of Criminal Justice. “All of the agencies involved deserve great credit for unraveling this tangled scheme and obtaining the evidence necessary to prosecute these individuals to the full extent of the law.”

“This case like others was successful due to the complete dedication, collaboration and professionalism of all agencies who stay the course in addressing a common reality of wrong doing, something we as a community and country cannot allow,” said Acting Special Agent in Charge Kevin Kelly of ICE Homeland Security Investigations in Newark.

“Postal Inspectors, along with other law enforcement agents, unraveled a sophisticated credit card fraud that resulted in millions of dollars in losses,” said Inspector in Charge Maria Kelokates, Newark Division of the U.S. Postal Inspection Service. “Postal Inspectors will continue to aggressively pursue investigations in which the U.S. Mail and Postal Money Orders are used to facilitate a crime.”

Special Agent in Charge Edward J. Ryan, of the Office of the Inspector General, Office of Investigations, Social Security Administration said: “As the law enforcement arm of the Social Security Administration (SSA), this office is responsible for protecting SSA’s programs from fraud, waste, and abuse, as well as preserving the integrity of the Social Security number (SSN). This investigation illustrates our office’s commitment to work with other law enforcement agencies to aggressively pursue the intentional misuse of the SSN. The actions of this alleged criminal enterprise are not only a violation of law; they are threat to the integrity of the SSN, upon which Social Security’s programs are based. I would like to thank the other participating agencies for their sustained partnership and commitment in addressing this critical issue.”

“This is another example of joint law enforcement operations in which the New Jersey Department of the Treasury’s expertise in financial crimes protects legitimate taxpayers and businesses,” said Dennis Shilling, Acting Director of the State Division of Taxation.

Each of the following 12 defendants was charged by complaint with first-degree money laundering, second-degree theft by unlawful taking, and third-degree fraudulent use of credit cards:

  1. Naim Tahir, 47, of Clark, N.J.,
  2. Hassan Shahbaz, 42, of Jersey City, N.J.,
  3. Aqeel Ahmed, 60, of Secaucus, N.J.,
  4. Shama Munir, 49, of Secaucus, N.J.,
  5. Faisal Mushtaq, 37, of Secaucus, N.J.,
  6. Mohammad Shakeel, 46, of Jersey City, N.J.,
  7. Muhammad Farooq Bhatti, 64, of Jersey City,
  8. Rilvan Junaid, 49, of Spring Valley, N.Y.,
  9. Shakeela Ahmed, 56, of Secaucus, N.J.,
  10. Aqeel Sheikh, 54, of Secaucus, N.J.,
  11. Mahamed Khan, 53, of Piscataway, N.J., and
  12. Huda Ahmed, 27, of Secaucus, N.J.

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, 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. 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.

Acting Attorney General Hoffman commended all of the agencies and investigators who worked on the investigation. The investigation began when the U.S. Postal Inspection Service (USPIS) received a referral from Wells Fargo Bank in connection with a bad check case the bank was investigating. The USPIS enlisted special agents of the Social Security Administration and ICE Homeland Security Investigations in Newark, who in turn enlisted the state agencies, namely the New Jersey Attorney General’s Office, the Office of Homeland Security & Preparedness, and the Department of the Treasury’s Office of Criminal Investigation. The New Jersey Division of Criminal Justice is prosecuting the case.

The lead investigators on the case were Special Agent Bradley E. Greenberg of ICE Homeland Security Investigations; Postal Inspector Brian Macdonald; Lt. Harry Maronpot and Detectives Katelyn Prata and James Gallo of the New Jersey Division of Criminal Justice; Special Agent Kristie Morgan of the Social Security Administration Office of Inspector General; and Special Agent Matthew Henderson of the New Jersey Department of the Treasury’s Office of Criminal Investigation.

Deputy Attorney General Anthony Torntore is prosecuting the case for the Division of Criminal Justice Financial & Computer Crimes Bureau, under the supervision of Deputy Attorney General Michael A. Monahan, Bureau Chief.

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 charges are merely accusations and the defendants are presumed innocent until proven guilty. Because they are indictable offenses, the charges will be presented to a state grand jury for potential indictment.