Serial Fraudsters Sentenced To Prison For Scheme Using Medical Patients’ Identities To Fraudulently Obtain Merchandise

Greenbelt, Maryland – U.S. District Judge Ellen L. Hollander sentenced Denise W. Wearing, age 37, of Philadelphia, Pennsylvania, today to seven years in prison followed by five years of supervised release for conspiracy to commit bank fraud and aggravated identity theft in connection with a scheme to obtain merchandise using stolen personal identifying information of medical patients. Wearing also admitted that from November 2011 through June 2012, she received $20,068 in disaster assistance from the Federal Emergency Management Agency after she falsely claimed that she was displaced by Hurricane Irene. Judge Hollander also ordered Wearing to pay restitution of $993,772.43.

On June 16, 2014, Judge Hollander sentenced Michelle Jernell Cole, age 28, of Baltimore, to six years in prison followed by five years of supervised release for the same offenses, as well as for an unrelated fraud scheme in which Cole fraudulently received the Social Security benefits of a deceased relative. Judge Hollander ordered Cole to pay restitution of $409,305.53 for the bank fraud scheme and an additional $50,635 in restitution to the Social Security Administration.

The sentences 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, Michelle Cole’s sister, Chanell Cole, met Wearing between 2004 and 2005 while both were serving fraud-related sentences in the Maryland Department of Corrections. Chanell introduced Michelle to Wearing.

From 2008 through approximately May 2010, Chanell Cole worked for a rheumatologist who had an office at Good Samaritan Hospital in Baltimore. Using her access to the physician’s patient files, Cole unlawfully obtained the personal identifying information (PII) of numerous patients, including names, addresses and social security numbers, which she provided to Wearing.

From 2010 through February 2012, Michelle Cole worked at a medical practice in Laurel, Maryland, where she also stole PII of patients, which she provided to Wearing. After being fired from that practice for reasons unrelated to the PII theft, from February 2012 through February 2013, she worked for a rheumatologist who had an office in Glen Burnie, Maryland. In that position she also fraudulently obtained the PII of numerous patients which she provided to Wearing. Michelle Cole obtained that position after submitting a fraudulent resume in support of her application. Michelle Cole had three previous state convictions for similar conduct.

From 2010 to February 2013, Wearing and other conspirators used the stolen PII 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. Wearing and other conspirators caused the delivery of the fraudulently obtained merchandise to their own residences, and to the residences of friends and family members, primarily in the Philadelphia, Pennsylvania area. After the merchandise was delivered, Wearing and others drove to the delivery address and 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.

Once she received the merchandise, Wearing provided it to other members of the conspiracy so that it could be sold for cash, typically for 50% of its retail value, or returned to the retail stores in exchange for gift cards. Wearing provided most of the merchandise to Yolanda Welch for sale and Welch paid Wearing in cash after she completed the sales.

During the course of the scheme, Wearing placed more than 1000 calls to retail stores and delivery services in furtherance of the scheme. Additionally, Wearing caused more than 200 deliveries of fraudulently obtained goods. On some occasions, Wearing sent merchandise to Michelle Cole or Chanell Cole for them to sell to their acquaintances. Both Michelle and Chanell Cole sent cash to Wearing through Western Union transactions and wire transfers through their banks. Wearing had seven previous fraud-related convictions.

Over the course of the scheme, the identities of over 100 individual victims were used to obtain over $993,000 of merchandise.

Chanell Y. Cole, age 31, of Owings Mills, Maryland, and Yolanda Gail Welch, age 39, of Philadelphia, Pennsylvania, pleaded guilty to their roles in the scheme and were sentenced to three years in prison and 33 months in prison, respectively. Judge Hollander ordered Chanell Cole to pay restitution of $32,091.91, and ordered Welch to pay restitution of $993,772.43. Judge Hollander sentenced co-conspirator Linda Nguyen, age 28, of Philadelphia, to one day in prison, followed by four months of home detention as part of five years supervised release, for her role in the conspiracy and ordered Nguyen to pay restitution of $54,399.

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 praised the U.S. Secret Service for its work in the investigation and Macy’s fraud investigators for their assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Paul Budlow, who prosecuted the case.