Maryland Man Pleads Guilty to $1.6 Million Identity Theft and Money Laundering Scheme

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

Baltimore, Maryland - Stewart Mark Twayne Harris, age 38, of Silver Spring, Maryland, pleaded guilty today to bank fraud, money laundering and aggravated identity theft.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; and Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division.

According to his plea, in April 2009, Harris applied for a $1,666,700 loan from a commercial lender for the purported purpose of using loan proceeds to purchase a commercial glass company. The loan was to be guaranteed by the Small Business Administration (SBA). To secure the business loan, Harris submitted a loan application and purported tax returns in which he falsely represented the social security number of another individual to be his own. He also submitted false bank statements in which he used the stolen identity of a second victim, and an equity statement which falsely represented the amount of paid receipts and other cash injection into the business he was to purchase.

Based on this false documentation, the SBA and the lender approved the loan, with the SBA guaranteeing 89.99% of the loan amount. On June 26, 2009, the lender disbursed $1,591,666 to Harris. From June to October, 2009, in order to conceal the loan proceeds, Harris deposited and withdrew the proceeds into different bank accounts he controlled. On October 1, 2009, Harris withdrew part of the funds to make a deposit and down payment on the purchase of a home in Brandywine, Maryland.

Harris defaulted on the loan on January 5, 2011. SBA paid the lender approximately $1,515,918.90 in satisfaction of its loan guarantee.

In April 2012, Harris filed a voluntary petition for bankruptcy. In his petition to the bankruptcy court, Harris failed to declare the commercial lender as a creditor, and failed to disclose that he was an officer or director, and owner of five percent or more, of the glass company.

Harris has agreed to pay restitution of at least $1,666,700, and forfeit the residential property located in Brandywine, Maryland.

Harris faces a maximum sentence of 30 years in prison for bank fraud, 20 years in prison for money laundering and a mandatory minimum of two years in prison consecutive to any other sentence imposed for aggravated identity theft. U.S. District Judge J. Frederick Motz scheduled his sentencing for June 12, 2015, at 10:00 a.m.

The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

United States Attorney Rod J. Rosenstein commended the SBA- OIG and SSA – OIG for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Thomas P. Windom, who is prosecuting the case.

Baltimore, Maryland - Stewart Mark Twayne Harris, age 38, of Silver Spring, Maryland, pleaded guilty today to bank fraud, money laundering and aggravated identity theft.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; and Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division.

According to his plea, in April 2009, Harris applied for a $1,666,700 loan from a commercial lender for the purported purpose of using loan proceeds to purchase a commercial glass company. The loan was to be guaranteed by the Small Business Administration (SBA). To secure the business loan, Harris submitted a loan application and purported tax returns in which he falsely represented the social security number of another individual to be his own. He also submitted false bank statements in which he used the stolen identity of a second victim, and an equity statement which falsely represented the amount of paid receipts and other cash injection into the business he was to purchase.

Based on this false documentation, the SBA and the lender approved the loan, with the SBA guaranteeing 89.99% of the loan amount. On June 26, 2009, the lender disbursed $1,591,666 to Harris. From June to October, 2009, in order to conceal the loan proceeds, Harris deposited and withdrew the proceeds into different bank accounts he controlled. On October 1, 2009, Harris withdrew part of the funds to make a deposit and down payment on the purchase of a home in Brandywine, Maryland.

Harris defaulted on the loan on January 5, 2011. SBA paid the lender approximately $1,515,918.90 in satisfaction of its loan guarantee.

In April 2012, Harris filed a voluntary petition for bankruptcy. In his petition to the bankruptcy court, Harris failed to declare the commercial lender as a creditor, and failed to disclose that he was an officer or director, and owner of five percent or more, of the glass company.

Harris has agreed to pay restitution of at least $1,666,700, and forfeit the residential property located in Brandywine, Maryland.

Harris faces a maximum sentence of 30 years in prison for bank fraud, 20 years in prison for money laundering and a mandatory minimum of two years in prison consecutive to any other sentence imposed for aggravated identity theft. U.S. District Judge J. Frederick Motz scheduled his sentencing for June 12, 2015, at 10:00 a.m.

The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

United States Attorney Rod J. Rosenstein commended the SBA- OIG and SSA – OIG for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Thomas P. Windom, who is prosecuting the case.