East Moline Man Pleads Guilty To Internet-Based Scheme Committed While Awaiting Sentencing on Other Federal Charges
Rock Island, Ill. – An East Moline, Illinois man is scheduled to be sentenced in December 2009 after he pled guilty today to committing wire fraud and money laundering in connection with an online store front scam he devised. Lawrence Douglas Kelley, 49, of the 3200 block of Archer Drive, East Moline, Illinois, appeared before U.S. District Judge Michael M. Mihm and pled guilty to both counts of the Information. Mr. Kelley is already in federal custody serving a 68-month term of imprisonment stemming from a prior federal conviction, also for money laundering and for passing counterfeit checks. He was sentenced in the prior case on August 19, 2008. The wire fraud and money laundering crimes that were the subject of his guilty plea today occurred while Mr. Kelley was released on bond awaiting sentencing for the first case.
In court documents and during today’s court proceedings, Kelley admitted that beginning no later than April 2007, he devised a scheme whereby he obtained credit card numbers without the knowledge of the credit card holders and then processed charges to those credit card accounts. Kelley admitted that he accomplished this scheme by establishing an Internet store front so that he could open merchant accounts with various entities that serve as credit card “clearing houses” for Internet merchants. Using his online store front, Kelley then processed unauthorized credit card charges using stolen credit card numbers he obtained. After the unauthorized transactions were processed by the credit card “clearing house” entities, but before the unsuspecting credit card holders knew of the charges, Kelley had the proceeds of the unauthorized charges wire transferred to financial accounts in his name or to accounts he otherwise controlled.
Kelley admitted that from August 2007 through October 2007, he charged, or attempted to charge, unauthorized credit card transactions valued at more than $80,000 through one credit card clearing house. Kelley also admitted to obtaining more than $40,000 from unauthorized charges processed by three additional companies that served as clearinghouses for credit card transactions he processed through his online store front scheme.
At sentencing, if the Court accepts the parties’ sentencing agreement contained in the plea agreement, Mr. Kelley will be required to serve two years of imprisonment consecutive to his previous sentence of 68 months, or 92 months in total for both federal cases.
Working cooperatively with the Rock Island County State’s Attorney’s Office, the charges were investigated by the U.S. Secret Service, the Internal Revenue Service Criminal Enforcement Division, the East Moline Police Department and the Moline Police Department. The case is being prosecuted by Assistant U.S. Attorney Matthew J. Cannon.
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