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Brooklyn Man Sentenced for Bank Fraud Scheme
July 24, 2012

BOSTON - A Brooklyn man was sentenced today to 28 months in prison and ordered to pay more than $109,000 in restitution in connection with a check kiting and credit card “bust-out” scheme.

U.S. District Judge Richard G. Stearns also ordered Ayman Ibrahim Khalil, an Egyptian national who had lived in New York prior to his arrest, to serve five years of supervised release after his prison term. Khalil is also subject to deportation to Egypt. Khalil had previously pleaded guilty to 14 counts of bank fraud and eight counts of access device fraud for his role in the scheme.

In 2008, Khalil, using an alias, set up two shell corporations in Saugus, Mass., registering the names with the Massachusetts Secretary of State’s Office. Khalil then opened business checking accounts in the name of the sham businesses at numerous banks in Eastern Massachusetts. He also obtained credit card transaction capabilities for the sham businesses by opening merchant accounts with credit card processing companies. Over the course of a week in mid-August 2008, Khalil executed the scheme by depositing bad checks in the business checking accounts and withdrawing available funds, before the banks discovered that the checks were unfunded. At the same time, Khalil used credit card terminals fraudulently obtained for the sham businesses to process scores of “forced” credit card transactions, using closed or expired credit card numbers. While these transactions were initially rejected, those rejections were overridden by the fraudulent use of authorization codes, effectively forcing the transactions through, and causing funds from the credit card processors to be deposited into one of his sham business accounts. Khalil also withdrew these funds before the fraud was detected.

In the course of the scheme, approximately $245,000 in worthless checks were deposited into Khalil’s sham business accounts and approximately $148,000 in forced credit card transactions were processed.

United States Attorney Carmen M. Ortiz and Steven Ricciardi, Special Agent in Charge of the United States Secret Service made the announcement. The case is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.




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