News and Press Releases

black market travel agents

Brooklyn man pleads guilty to multi-million dolar fraud

conspirators used stolen identities, credit cards
to purchase airline tickets

FOR IMMEDIATE RELEASE
July 8, 2011

KANSAS CITY, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Brooklyn, New York, man pleaded guilty in federal court today to his role in a conspiracy among black market travel agents who used the stolen identities of thousands of victims as part of a multi-million dollar fraud scheme to purchase airline tickets for their customers.

Steven James Palmer, also known as “Haze,” 30, of Brooklyn, pleaded guilty before Chief U.S. District Judge Fernando J. Gaitan, Jr. In addition to the conspiracy, Palmer pleaded guilty to aggravated identity theft.

Palmer is among 38 defendants from across the United States who were charged in a series of six separate, but related, indictments. These separate criminal conspiracies resulted in an estimated total loss of more than $20 million to numerous domestic airline companies, financial institutions, other merchants and individual credit and debit cardholders. A total of 30 defendants have now pleaded guilty and two defendants have been sentenced.

Palmer admitted that he acted as a black market travel agent. He used stolen identity information, including stolen credit/debit cards from hundreds of victims in dozens of states, to purchase airline reservations for their customers totaling between $1 million and $2.5 million. In addition to selling fraudulently obtained airline reservations, Palmer also sold tickets to Disney World in 2009 that he obtained by using stolen credit/debit card information. Palmer posted adds on craigslist.com to sell discount Disney World tickets.

Palmer frequently purchased airline reservations for transvestite prostitutes, who flew throughout the United States (including Kansas City, Mo.) to sell their sexual services to customers. Palmer knew that he was flying prostitutes to further their criminal activity.

Black market travel agents profited from the scheme by purchasing the stolen credit/debit card information of the identity theft victims at a nominal cost, then using the stolen information to purchase the reservations online at airline Web sites. Black market travel agents then sold the confirmation codes of the airline reservations to their customers.

Palmer generally purchased reservations close to the time of departure, in order to increase the likelihood that the airlines, credit card or debit card companies, or identity theft victims would not detect the fraudulent purchases and have the reservations canceled. As a result, their passengers could often complete their respective trips before the stolen credit or debit card used to pay for the flight was detected as being compromised.

Palmer obtained stolen credit and debit card information from a number of sources, including co-defendants Romeyo Calavarey, 26, of Atlanta, Ga.; Alexander Lewis, 26, of McDonough, Ga.; Tyrone Jackson, 24, of Newark, N.J.; and sources in Dhaka, Bangladesh. Calavarey, Lewis and Jackson have pleaded guilty to their roles in the conspiracy.

Under the terms of today’s plea agreement, the government and Palmer agree to request a sentence of seven years in federal prison without parole, which is the statutory maximum sentence for the charges to which he pleaded guilty. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney John E. Cowles. It was investigated by the U.S. Postal Inspection Service, the Overland Park, Kan., Police Department, and the Kansas City Secret Service Task Force, and with the assistance of the Drug Enforcement Administration.

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