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NEWS RELEASE

OFFICE OF THE UNITED STATES ATTORNEY

WESTERN DISTRICT OF MISSOURI


JOHN F. WOOD


Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106

www.usdoj.gov/usao/mow/index.html


MAY 21, 2007

FOR IMMEDIATE RELEASE


KC MAN SENTENCED TO 19 YEARS FOR

IDENTITY THEFT CONSPIRACY


CO-DEFENDANT ALSO SENTENCED IN $400,000

IDENTITY THEFT SCHEMES


            KANSAS CITY, Mo. – John F. Wood, United States Attorney for the Western District of Missouri, announced that two more defendants were sentenced in federal court today for participating in an identity theft conspiracy.


            Carlton Strother, 40, of Kansas City, Mo., and Chandra L. Jenkins, 29, of Plano, Texas, were sentenced in separate appearances before U.S. District Judge Ortrie D. Smith. Strother was sentenced to 19 years and six months in federal prison without parole. The court also ordered Strother to pay an amount of restitution not to exceed $580,225. Jenkins was sentenced to two years and one month in federal prison without parole.


            Approximately 116 victims (including 33 retail businesses) suffered a total loss of more than $400,000 as a result of two separate fraud schemes that were perpetrated using stolen identity information. Among 16 co-defendants charged in an Aug. 10, 2006, federal indictment and a later superseding indictment, four co-defendants have been convicted at trial and 12 co-defendants have pleaded guilty.


            On Oct. 26, 2007, Strother, along with co-defendants Tarik I. Liwaru, 34, of Kansas City, Kan., and Arlester E. Scott, Jr., 42, of Kansas City, Mo., was convicted by a federal jury of conspiracy to commit identity theft and access device fraud. The defendants used stolen identity information to open credit accounts and make purchases at stores like Sam’s Club, Target, Old Navy, Home Depot and others. They also used the stolen identity information to finance an automobile purchase and to apply for cellular telephone service.


            Liwaru was sentenced on Tuesday, May 20, 2008, to five years in federal prison without parole and ordered to pay $160,272 in restitution. A sentencing hearing for Scott has not been scheduled.


            Strother and Jenkins were also convicted at trial of participating in a separate conspiracy, a mortgage fraud scheme that involved the use of stolen identity information to make business loan applications at Wells Fargo Bank in Dallas, Texas. Four fraudulent applications were made, totaling $360,000, but the scheme was interrupted by law enforcement before any money was obtained by the conspirators.

 

Instant Credit Scheme

 

            Strother, Liwaru and Scott were found guilty of participating in the conspiracy to commit identity theft from March 3, 2005, to Sept. 26, 2005. They obtained personal identification information of persons together with their personal credit information. They used a computer to create counterfeit driver’s licenses in the names of the identity theft victims for the purpose of making unauthorized applications for credit. Personal identity information of the identity theft victims was stolen from two Kansas City-area businesses – Jeremy Franklin Suzuki and Hearthside Lending, a real estate loan brokerage – that kept large volumes of credit information of their customers, including credit bureau reports that reflected the creditworthiness of each identity theft victim.


            Liwaru provided Strother with stolen credit bureau reports from Hearthside Lending. Evidence presented during the trial indicates that 76 victims (who had been customers of Hearthside Lending) suffered a total loss of more than $160,272 as a result of the first conspiracy.


            Scott, a former employee of Jeremy Franklin Suzuki, stole credit bureau reports obtained by the car dealership in connection with the financing of automobile sales, then sold them to Strother. Evidence presented during the trial indicates that 40 victims (who had been customers of Jeremy Franklin Suzuki) suffered a total loss of more than $67,837 as a result of the first conspiracy.


            Conspirators who managed the scheme recruited others to the conspiracy by promising them a share of the proceeds. The identity theft victims’ financial information was used by the conspirators to make computer-generated counterfeit Kansas driver’s licenses, which contained the information of the identity theft victims, but with the photo of one of the recruited conspirators, or shoppers. The shoppers used the stolen identities and counterfeit driver’s licenses to make instant credit applications at retail stores while posing as the identity theft victims. Once the instant credit applications were approved, they made credit purchases at the stores.


            Strother was also found guilty of 13 counts of aggravated identity theft and 11 counts of access device fraud. From March 9 through Sept. 25, 2005, Strother used stolen identity information in order to defraud retail stores (and credit card companies that serviced the credit accounts of those stores) by opening credit accounts using the identity and credit information of identity theft victims. On 11 separate instances, Strother then used the credit accounts to make purchases.


Mortgage Fraud Scheme


            Strother and Jenkins were also found guilty of participating in a conspiracy from January to March 2006 to defraud financial institutions and mortgage companies by making applications for real estate mortgages and other forms of credit using the identities and credit worthiness of identity theft victims. They obtained means of identification consisting of names, dates of birth, and Social Security numbers of others without their authority or knowledge and used that identity information to apply for mortgage loans to purchase real estate. The proceeds of the mortgage loans were applied to fraudulent accounts of non-existent business entities in order for the conspirators to take cash out of each transaction.


            Conspirators agreed to acquire stolen identification and personal financial information from area mortgage companies. The conspirators who managed the scheme recruited others by promising to share the proceeds derived from the mortgage transactions.


            Conspirators used stolen identity information to obtain three separate mortgages for two residential properties in Lee’s Summit and one property in Kansas City, totaling $1,166,000. Conspirators opened bank accounts in the names of identity theft victims and non-existent businesses, then had a portion of the loan proceeds wired to those accounts. Conspirators withdrew funds from those accounts and shared the proceeds.


            Jenkins was also found guilty of four counts of aggravated identity theft. Jenkins, who at the time was an employee of a Wells Fargo Bank branch in Dallas, Texas, opened two business accounts at Wells Fargo Bank using stolen identity information. Jenkins then used the stolen identity information to make four applications for business lines of credit and credit cards at Wells Fargo Bank.


            This case is being prosecuted by Assistant U.S. Attorney John E. Cowles. It was investigated by the U.S. Secret Service Financial Crimes Task Force, including officers from the Independence, Mo., Police Department, the Kansas City, Mo., Police Department, the Kansas City, Kan., Police Department, the Overland Park, Kan., Police Department, the Johnson County, Kan., Sheriff’s Department, the U. S. Postal Inspection Service, and IRS-Criminal Investigation.


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This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at

www.usdoj.gov/usao/mow/index.html