money laundering

$200 Mill-28 States/8 Countries/Fraud Rings

 

$200 Million, 28 States and 8 Countries – One of the Largest Fraud Rings in History


$200 million is enough to raise eyebrows.  One of the largest credit card fraud rings in history was busted and is accused of laundering money into the Middle East.  With money being wired into Pakistan authorities fear that much of the stolen funds will end up in the hands of terrorist.

“One of the largest schemes ever uncovered by the US Justice Department”

This international credit card fraud ring charged at least $200 million in this scam.  According to Federal Prosecutors they bought luxury cars, high end goods, gold and more in order to funnel cash overseas.  According to US Attorney Paul Fishman, this is one of the largest schemes ever uncovered by the US Justice Department.  By the time they were caught it had extended into 28 states and eight countries.  Over 22 people have been indicted and authorities expect that number to grow.

Tahir Lodhi from Hicksville, New York has pled guilty to his role in the scam and authorities are considering it to be a leading role.  He faces up to $1 million in fines and 30 years in prison.  His attorney, Howard Simmons, claims he is not a leader within the group and simply a participant.  What is interesting is that he was not named in the initial complaint because he admitted to his actions prior to the complaint going public.  His sentencing hearing will be on October 1st and is likely to be the first of many.

By 2010 the group had created over 7,000 false identities with 1,800 false mailing addresses. 

They would take out small credit cards, run charges, repay them, and use that cycle to improve their credit worthiness.  They would in turn get approved for higher limit credit cards that were used for the scam.  In total they had over 25,000 credit cards…. Talk about needing a bookkeeper.  Out of this scam credit card companies have lost at least $200 million but with 7,000 known identities those numbers could easily grow as more people become associated with the group.

Another aspect of the scam was creating fake businesses.  They started 80 sham companies that would accept the fake credit cards.  The companies would then get cash from the pretend transaction that could be used by the group.  It would simultaneously improve the fake persons credit score by showing a purchase where a payment could easily be made from the proceeds relieved by the pretend business.

This elaborate scam appeared to primarily be ran by a group of Pakistani men in the New Jersey, New York, and Pennsylvania areas. 

With money being funneled throughout the US, Pakistan, China it is unclear who has had access to the millions of dollars that was stolen.  This ongoing case is likely to lead to a lot more indictments as time goes on and more is uncovered in what is likely to be the most elaborate credit card scam ever.