Ringleader Of Large-Scale Identity Theft Scheme Sentenced In Manhattan Federal Court To 10 Years In Prison
Scheme Targeted More Than 180 Accountholders At Large Retail Stores And Resulted In Losses In Excess Of $1 Million
Preet Bharara, the United States Attorney for the Southern District of New York, and Eric T. Schneiderman, the New York State Attorney General, announced that PHILLIP SMITH was sentenced today in Manhattan federal court to 10 years in prison for running a large-scale identity theft scheme in which he and his co-conspirators used stolen identities of over 180 people to make more than $1 million worth of fraudulent purchases at retail stores in New York City and elsewhere. SMITH pled guilty in November 2012 and was sentenced before U.S. District Judge John F. Keenan.
Manhattan U.S. Attorney Preet Bharara stated: “Phillip Smith and his co-conspirators engaged in a ‘soup-to-nuts’ identity theft scheme that ripped off retailers for more than $1 million and had the potential to compromise his victims’ credit ratings. We take identity theft crimes very seriously and will continue to prosecute them to the full extent of the law.”
New York State Attorney General Eric Schneiderman stated: “This defendant victimized businesses and hundreds of New York consumers in a systematic and elaborate scheme to line his own pockets. My office will aggressively crack down on identity theft – and Phillip Smith will spend a decade behind bars for his crimes.”
According to the Complaint, Indictment, and Superseding Informations filed in this case, as well as statements made during court proceedings:
Beginning in 2008, PHILLIP SMITH obtained stolen identities, including the names and social security numbers of legitimate accountholders at large retail chains, including Home Depot, Sears, Kmart, and Kohl’s. After obtaining the stolen identities, SMITH called the customer service numbers at the retail stores to confirm that the victims had credit accounts and to determine the available credit limit. Once that information was obtained from the stores, SMITH procured fake driver’s licenses in the names of the victim accountholders but with photos of co-conspirators, including Eugene Smith and Winston Harris.
PHILLIP SMITH then drove his co-conspirators, including Harris and Eugene Smith, to retail stores throughout New York, Connecticut, New Jersey, and Pennsylvania, where they purchased more than $1 million of merchandise and gift cards using the victims’ accounts. The co-conspirators used the fake driver’s licenses at the time of those purchases to impersonate the victim accountholders.
PHILLIP SMITH obtained the fake driver’s licenses from Mahmoud Abdul Hussein, Ali Abdul Hussein, and Fadal Abdul Hussein, three brothers who operated out of two storefronts in the Greenwich Village area of Manhattan.
After the fraudulent purchases had been made, PHILLIP SMITH drove his co-conspirators, including Harris and Eugene Smith, to other locations of the retailers, where they returned the fraudulently acquired merchandise for store credits. The credits were then sold to other participants in the scheme, including Francis Hidalgo and Randy White, who in turn resold the store credits and gift cards to others.
In addition, Hidalgo used some of the proceeds and gift cards he obtained through the identity theft scheme to purchase building materials so that he could convert two warehouses in the Bronx into marijuana growhouses for a large marijuana distribution organization. A search of one of these growhouses resulted in the seizure of over 400 marijuana plants.
To date, eight of the nine defendants charged with participating in this scheme have been convicted. Charges remain pending against one defendant.
In addition to the prison term, Judge Keenan sentenced PHILLIP SMITH, 55, of the Bronx, New York, to three years of supervised release. SMITH was also ordered to forfeit $404,000 and to pay restitution of $1,153,000.
Francis Hidalgo, 45, of Pomona, New York, was sentenced by Judge Keenan on March 13, 2013 to 78 months in prison, and was ordered to pay $557,816 in restitution.
Randy White, 57, of the Bronx, New York, was sentenced by Judge Keenan on February 7, 2013 to time served, and was ordered to pay restitution in the amount of $46,000.
Winston Harris, 57, of Brooklyn, New York, was sentenced by Judge Keenan on January 24, 2013 to 48 months in prison, and was ordered to pay $70,000 in restitution.
Eugene Smith, 59, of the Bronx, New York, is scheduled to be sentenced by Judge Keenan on June 18, 2013.
Mahmoud Abdul Hussein, 28, Ali Abdul Hussein, 34, and Fadal Abdul Hussein, 23, of Seaford, New York, are scheduled to be sentenced by Judge Keenan on May 9, 2013.
Charges remain pending against Melissa Morton, who allegedly impersonated female identity theft victims at retailers. Morton is presumed innocent unless and until proven guilty.
Mr. Bharara praised the New York Attorney General’s Office, the Immigration and Customs Enforcement’s Homeland Security Investigations, the New York State Department of Financial Services, and the New Jersey Department of Human Services Police for their excellent assistance in the investigation of this matter. He also thanked the NYPD, the New Jersey Department of Labor and Workforce Development, Home Depot, and Kohl’s for their support and cooperation in the investigation.
The case is being handled by Assistant United States Attorney Joseph P. Facciponti of the
Office’s Complex Frauds Unit, Assistant Attorney General Meryl Lutsky, who has been
designated a Special Assistant U.S. Attorney, and Assistant Attorney General Tyler Reynolds.