News and Press Releases

“Interstate boys” admit scamming wal-mart and t-Mobile in multi-state iD theft and fraud conspiracy



FOR IMMEDIATE RELEASE
February 10, 2012


 

NEWARK, N.J. – Two members of a group calling themselves the “Interstate Boys” – because their crimes stretched the length of Interstate 95 from Maine to Florida – admitted today to conspiring to defraud Wal-Mart Stores, Inc. and T-Mobile USA by using stolen identities to open phone plans they used without paying and to buy phones they sold at a profit, New Jersey U.S. Attorney Paul J. Fishman announced.

Ralbert Olacio, 23, and Edwin Rodriguez, 22, of Brooklyn, N.Y., pleaded guilty to separate Informations charging each with conspiracy to commit wire fraud. They entered their guilty pleas this morning before U.S. District Judge Esther Salas in Newark federal court. A third co-conspirator, Alfredo Rodriguez, 23, also of Brooklyn, pleaded guilty before Judge Salas to an Information charging one count of wire fraud conspiracy on Jan. 31, 2012.

According to documents filed in this case and statements made in court:

From May 2010 to July 2011, Olacio, Edwin Rodriguez and Alfredo Rodriguez, who are not related, conspired with each other and others to defraud Wal-Mart and T-Mobile. During their guilty plea proceedings, each admitted that he obtained personal identification information of identity theft victims and then created or caused to be created driver’s licenses in the names of those victims. The defendants acknowledged that they then opened T-Mobile accounts by phone or by going to Wal-Mart stores, including stores in New Jersey.

The defendants admitted that once the accounts were open, they bought discounted phones available to new T-mobile customers only at Wal-Marts in New Jersey and elsewhere. They admitted using the phones to make calls they did not pay for and selling the phones to others at a profit.

During this period, the defendants obtained the personal identification information, including the names and Social Security numbers, of more than 400 victims. Using this information, they completed T-Mobile’s credit check process and opened more than 400 T-Mobile cellular telephone accounts in the names of identity theft victims. After establishing the fraudulent accounts, the defendants traveled to over 350 different Wal-Mart stores located from Maine to Florida on approximately 600 occasions to complete activation of the accounts and to purchase approximately 2,000 discounted cellular handsets for resale.

Retailers such as Wal-Mart typically offer cellular handsets to new T-Mobile customers at steep discounts because they receive incentives from T-Mobile over time that help offset the discount amount. In the event such an account is deactivated for fraud, Wal-Mart does not receive any incentives from T-Mobile and solely bears the losses associated with the discounts it offered.

In most cases, the fraudulent T-Mobile accounts were deactivated by T-Mobile for fraud or identity theft shortly after they were established. Nevertheless, T-Mobile suffered hundreds of thousands of dollars in losses as a result of unpaid service charges, among other things. In addition, Wal-Mart suffered significant losses related to its sale of discounted cellular handsets to defendants because it was unable to recoup the incentives it expected when it sold the equipment. In total, the defendants’ scheme has resulted in approximately $1 million in losses to T-Mobile and Wal-Mart associated with unpaid T-Mobile cellular service, discounted cellular handsets, and the costs associated with investigating the defendants’ criminal conduct.

The charge to which each defendant pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross amount of any pecuniary gain derived from the offense, or pecuniary loss sustained by any victims of the offense. Sentencing for Olacio and Edwin Rodriguez is currently scheduled for June 4, 2012. Sentencing for Alfredo Rodriguez is currently scheduled for May 9, 2012.

U.S. Attorney Fishman praised postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Philip R. Bartlett, for the investigation. He also thanked T-Mobile USA’s Major Investigations Group and Wal-Mart’s Asset Protection Group, which both worked closely with federal law enforcement during the course of the investigation.

The government is represented by Assistant U.S. Attorney Gurbir S. Grewal of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

12-046

Defense counsel:

Olacio: Genesis Peduto Esq., Union City, N.J.
Edwin Rodriguez: Donald Becker Esq., Edgewater, N.J.
Alfredo Rodriguez: John Coyle Esq., Jersey City, N.J.

Rodriguez, Alfredo Information
Rodriguez, Edwin Information
Olacio, Ralbert Information

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