Four Indicted in Scheme to Allegedly Fraudulently Obtain Nearly $1.4 Million from Baltimore Housing Authority Account
Defendants Allegedly Transferred Funds Out of Housing Authority’s Bank Account
Baltimore, Maryland - A second superseding indictment, which was returned by the grand jury on December 21, 2011 and was unsealed today, charges four defendants in a conspiracy to fraudulently obtain almost $1.4 million from a Baltimore Housing Authority bank account. Charged in the second superseding indictment are:
Daren Kareem Gadsden, aka “D,” age 35, of Upper Marlboro, Maryland;
Tyeast Brown, aka “Peaches,” age 41, of Suitland, Maryland;
William Alvin Darden, age 44, of Washington, D.C; and
Keith Eugene Daughtry, age 50, of Washington, D.C.
All of the defendants have been arrested. Gadsden and Darden are detained pending trial. Brown and Daughtry were released under the supervision of U.S. Pretrial Services.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.
“The indictment alleges that the defendants stole from the Baltimore Housing Authority by transferring money directly out of the Authority’s bank account,” said U.S. Attorney Rod J. Rosenstein. “The $1,399,700 stolen from the Baltimore Housing Authority was supposed to be used to provide housing, not to line the pockets of criminals.”
According to the four count second superseding indictment, in 2009, Gadsden owned a property in Baltimore that was rented to a low income individual, whose rental payments were paid by the Baltimore Housing Authority, from its account directly to Gadsden’s bank account. In late 2009 and 2010, Gadsden made a series of inquiries to another bank where he had an account about how to use his computer to make electronic transfers to and from his account at that bank. In early 2010, the Housing Authority lost a few thousand dollars when a series of unauthorized electronic transfers debited funds out of the Housing Authority’s account and into Gadsden’s bank account. After being confronted by Housing Authority officials, Gadsden denied any wrongdoing, but paid the Housing Authority $1,400 to cover some of its losses.
From early 2010 until at least September 17, 2010, the indictment alleges that the defendants conspired to execute a larger scheme to defraud the Housing Authority. Specifically, Gadsden contacted Brown to plan the fraud. Brown, in turn, contacted Darden and Daughtry, securing from Daughtry his social security card and birth certificate, which she provided to Darden. On May 19, 2010, Darden obtained a Maryland driver’s license with his photograph, but in Daughtry’s name, using Daughtry’s social security card and birth certificate as proof of identity. Darden then used the fraudulent license to open a bank account in the name of Keith Daughtry Contracting LLC. Gadsden had registered the entity with the state of Maryland, only a few days before, under a different, misspelled name. Darden also provided a mailing address for the company that was actually a mailbox rented by the conspirators at a commercial mailing store.
Beginning in July, 2010, the indictment alleges that the defendants electronically transferred funds from the Housing Authority’s bank account and into the Keith Daughtry Contracting LLC account. According to the indictment, the conspirators drained the stolen Housing Authority funds from the Keith Daughtry Contracting account by electronic transfers into accounts at other banks, in-person cash withdrawals and from automated teller machines. In addition, the conspirators electronically transferred funds from the Keith Daughtry Contracting account onto debit cards in the names of other individuals. For example, the indictment alleges that during the summer of 2010, Brown recruited individuals to open debit cards in their names at a retail store. The conspirators allegedly transferred thousands of dollars in stolen Housing Authority funds from the Keith Daughtry Contracting account onto these debit cards. Brown then directed the recruits to withdraw most of these funds off the debit cards through cash withdrawals at the retail store and provide the funds to her, although she did permit them to keep certain amounts for themselves. Further, the indictment alleges that Gadsden opened a debit account in the name of another individual, using that person’s identity information without their knowledge or permission.
The indictment also alleges that Gadsden attempted to and did tamper with evidence after he was contacted by an FBI Special Agent, by deleting the contents of at least two email accounts, which were provided as the points of contact for certain debit cards Gadsden opened using stolen identity information.
Finally, the indictment seeks forfeiture of $1,399,700, believed to be the proceeds of the scheme.
The defendants face a maximum sentence of 30 years in prison and a $1 million fine for the bank fraud conspiracy. Gadsden also faces a mandatory two years in prison, consecutive to any other sentence for aggravated identity theft, and 20 years in prison for one count each of attempting to tamper with evidence and for evidence tampering. U.S. District Judge William D. Quarles, Jr. has scheduled trial for April 30, 2012.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked the FBI for its work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorney Sujit Raman, who is prosecuting the case.