FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC at 410-209-4885
MARCH 10, 2006
FOR IMMEDIATE RELEASE
BALTIMORE MAN SENTENCED TO OVER 4 YEARS IN PRISON
IN FRAUD SCHEME
Created Businesses that Sold Tickets to Sporting Events by Phone
Used Personal Information of Customers to Open Credit Card and Bank Accounts
BALTIMORE, Maryland - United States Attorney for the District of Maryland Rod J. Rosenstein announces that today U.S. District Judge Andre M. Davis sentenced Stuart Blumberg, age 47, of Baltimore, to 57 months in prison followed by 3 years of supervised release for conspiracy to use unauthorized access devices and use of an unauthorized access device.
Judge Davis also ordered Blumberg to pay almost $300,000 in restitution.
According to the statement of facts presented at his guilty plea on November 3, 2005, from 1999 and continuing up to 2004, Stuart Blumberg, Bruce Schein and several other individuals developed and operated a scheme to defraud persons who responded to advertisements for tickets to sporting events and other goods placed by Blumberg and Schein. This scheme had four basic components.
First, Blumberg, Schein, and their agents created fictitious businesses that were purportedly in the business of selling items over the phone – generally tickets to sports events and concerts, and electronic games systems. These fictitious business included, for example, Parkway Tickets, Sunshine Sporting Goods, Parkway Games, Tick Tock Tickets, and Jerry’s Standard Tickets. They placed ads for these businesses in major newspapers and periodicals all over the country.
Second, Blumberg and his agents rented mailboxes at commercial mail receiving agencies, such as Mail Boxes Etc., which served as the addresses for these fictitious businesses.
Third, Blumberg, with the help of Schein, stole identification information (names, dates of birth, social security numbers, etc.) from individuals with acceptable credit histories. Blumberg, with the help of his agents opened up dozens of merchant credit card accounts with Discover Card, American Express, and intermediary companies that processed credit card transactions for credit card companies, specifically Card Services International, National Processing Company, Card Payment Systems, Merchant Bank Card, and Universal Savings Bank.
Fourth, Blumberg recruited Bruce Schein and others to open up bank accounts that received money from the merchant credit card accounts, and to withdraw money from these accounts for Blumberg.
Victim-customers responded to the ads, purchased tickets over the phone, and provided their credit card information to Blumberg or his agents. The credit card was processed through the merchant credit card account, and the money was transmitted into the bank account. The victim-customers of the tickets never received any items from Blumberg’s fictitious businesses. If they disputed the charges, the credit card companies took the loss. Before the credit card company could figure out that fraud was involved, Blumberg closed the business and created a new one.
The scheme resulted in over $400,000 in losses to individuals and merchant credit processing companies, and over ten victims.
Bruce Schein pleaded guilty to conspiracy to use unauthorized access devices and was sentenced on January 27, 2006 to15 months in prison, followed by two years of supervised release. Judge Davis also ordered Schein to pay $70,000 in restitution.
United States Attorney Rod J. Rosenstein thanked the U.S. Postal Inspection Service for its investigative work in this case. Mr. Rosenstein also praised Assistant United States Attorneys Paul M. Tiao and Robert H. Harding, who prosecuted the case.
This page last modifiedMarch 13, 2006