LEADER CONVICTED IN SCHEME TO STEAL NEARLY $1.4 MILLION FROM HOUSING AUTHORITY OF BALTIMORE CITY ACCOUNT
Transferred Funds Out of Housing Authority’s Bank Account
Baltimore, Maryland - A federal jury today convicted Daren Kareem Gadsden, aka “D,” age 36, of Upper Marlboro, Maryland, on charges related to a conspiracy to steal almost $1.4 million from a Housing Authority of Baltimore City bank account.
The guilty verdict was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief James W. Johnson of the Baltimore County Police Department.
“Daren Gadsden stole from the Baltimore City Housing Authority by transferring money directly out of the Authority’s bank account,” said U.S. Attorney Rod J. Rosenstein. “The $1,399,700 in taxpayer funds stolen from the Baltimore City Housing Authority was supposed to be used to provide housing, not to line the pockets of criminals.”
According to information presented at his six day trial, in 2009, Gadsden owned a property in Baltimore that was rented to a low income individual, whose rental payments were paid by the Housing Authority of Baltimore City, from its account directly to Gadsden’s bank account. Witnesses testified that 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.
The evidence showed that from early 2010 until at least September 17, 2010, Gadsden and several co-defendants conspired to execute a larger scheme to defraud the Housing Authority. Specifically, Gadsden contacted Tyeast Brown to plan the fraud. Brown, in turn, contacted William Alvin Darden and Keith Eugene 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.
According to witness testimony, beginning in July, 2010, Gadsden and his co-conspirators electronically transferred funds from the Housing Authority’s bank account and into the Keith Daughtry Contracting LLC account. The conspirators then 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, Gadsden opened a debit account in the name of another individual, using that person’s identity information without their knowledge or permission.
The evidence showed that Gadsden also tampered with evidence, deleting the contents of at least two email accounts after he was contacted by an FBI Special Agent. The accounts were provided as the points of contact for certain debit cards Gadsden opened using stolen identity information.
Gadsden faces 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 sentencing for October 24, 2013 at 1:00 p.m.
Tyeast Brown, aka “Peaches,” age 42, of Suitland, Maryland; William Alvin Darden, age 46, of Washington, D.C; and Keith Eugene Daughtry, age 52, of Washington, D.C. all pleaded guilty to their roles in the scheme. Daughtry and Brown were sentenced to 41 months and 36 months in prison, respectively, and each was ordered to pay restitution of $1,399,700. Darden is expected to be sentenced later this year.
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 and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Sujit Raman and Gregory Bockin, who are prosecuting the case.