Conspirators Plead Guilty To Scheme Using Medical Patients’ Identities To Fraudulently Obtain Merchandise
Baltimore, Maryland – Chanell Y. Cole, age 30, of Owings Mills, Maryland, and Yolanda Gail Welch, age 39, of Philadelphia, Pennsylvania, pleaded guilty on Friday, January 3, 2014, to conspiracy to commit bank fraud in connection with a scheme to obtain merchandise using stolen personal identifying information of medical patients.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.
According to their plea agreements, beginning sometime in 2010 through February 2013, Chanell Cole, Yolanda Welch, and others participated in a scheme to defraud various financial institutions by stealing personal identifying information (“P.I.I.”) from medical providers and using the victims’ P.I.I. to fraudulently open credit accounts and assume control of existing credit accounts at Macy’s, Bloomingdale’s, and Nordstrom. The conspirators used the accounts to purchase merchandise in the names of the unknowing victims without intending to pay for the goods. The conspirators kept the goods; sold the goods to others in exchange for cash; or returned the goods to the retail stores for merchandise credit and for credit on the accounts of the conspirators.
According to her plea agreement, from 2008 through approximately May 2010, Chanell Cole was the sole employee of a rheumatologist with offices at Good Samaritan Hospital in Baltimore, and had access to the physician’s patient files, including electronic records. As part of the scheme, Cole used her position to unlawfully obtain the P.I.I. of numerous patients, including names, addresses, and social security numbers, which she provided to a co-conspirator.
In the early stages of the conspiracy, conspirators obtained false identifications in the names of the victims, but bearing the conspirator’s likeness. The fraudulent identifications and the P.I.I. were then used to open credit accounts at the retail stores. Once the accounts were opened, conspirators made purchases at stores in Maryland, Delaware, New Jersey, and New York. Later in the scheme, members of the conspiracy contacted Macy’s, Bloomingdale’s, and/or Nordstrom by telephone to determine if the victims had existing credit accounts with the retailers. Once it was learned that the victim had an existing credit account, members of the conspiracy used the victims’ P.I.I. to make purchases of merchandise over the phone, which were delivered to the residences of friends and family members of Cole, Welch and other conspirators, primarily in the Philadelphia area. After the merchandise was delivered, a conspirator picked up the packages, and paid the recipient a fee for having received the packages. The fee was either cash or a previously determined item of merchandise that was part of the delivery. The merchandise was sold for cash, or returned to the retail stores in exchange for gift cards. The gift cards were sold for cash or provided to friends and family members. Most of the merchandise was provided to Welch, who sold the merchandise to various individuals for approximately 50% of the retail value. Welch provided the cash to a co-conspirator, who paid her a cash fee in return. Welch listed some of the merchandise using her eBay account. Cole assisted in the sale of the merchandise and purchased some of the fraudulently obtained merchandise for her personal use.
During the course of the scheme, Cole provided the P.I.I. of at least 24 patients, which was used in the scheme causing a loss of at least $32,091.91, and Welch sold over $100,000 of fraudulently obtained merchandise. In total, the scheme resulted in the identities of over 100 individual victims being used to fraudulently obtain over $993,000 of merchandise from Macy’s, Bloomingdales, and Nordstrom.
Cole and Welch face a maximum penalty of 30 years in prison for the bank fraud conspiracy. U.S. District Judge Ellen L. Hollander has scheduled sentencing for Cole on April 4, 2014 at 9:00 a.m. and for Welch on April 25, 2014 at 12:00 p.m.
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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein thanked the U.S. Secret Service for its work in the investigation and thanked Macy’s fraud investigators for their assistance. Mr. Rosenstein praised Assistant U.S. Attorney Paul Budlow, who is prosecuting the case.