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FIVE SEATTLE AREA WOMEN INDICTED FOR BANK FRAUD IN“OPERATION HONOR ROLL” - Defendants Accused of Identity Theft to Apply for More than $2 Million in Student Loans

June 10, 2008

Five women, three from one family, were arrested this morning after being indicted for Bank Fraud and Aggravated Identity Theft. The women used other people’s Social Security numbers and identification information to apply for $2,234,000 in student loans. The banks were defrauded of approximately $690,000. All five women will appear in U.S. District Court in Seattle today at 2:30.

The indictment unsealed today details how KATHY L. HARDY, 59, of Renton, Washington, and her two daughters, LESLIE Y. GORDON, 35, and THERESA R. HARDY, 20, both also of Renton, and two of GORDON’s associates, KATHERINE FAIR, 36, of Seattle, and KIMBERLY R. JONES, 36, of Seattle, conspired to defraud four different financial institutions. The scheme began in April 2005, and over the next three years various members of the conspiracy allegedly submitted a dozen different student loan applications using other people’s names, and/or Social Security numbers as the borrower or the cosigner. The conspirators defaulted on the loans, taking the cash but never making a payment.

The loans were taken out from private student loan companies, but were funded by banks. For example, according to the indictment, on December 31, 2005, KATHY HARDY and LESLIE GORDON submitted false student loan paperwork to Astrive Student Loans. The $30,000 loan was funded by RBS Citizens N.A., a U.S. financial institution as defined by law. Other loans were taken out through the course of the conspiracy through Sallie Mae, and were funded by Sallie May Bank; through My Rich Uncle Student Loans which were funded by Doral Bank FSB; and through Educated Borrow which were funded by Richland State Bank.

In addition to the Bank Fraud charges, the defendants are each charged with at least one count of Aggravated Identity Theft for the use of someone else’s personal identifying information in relation to the Bank Fraud. LESLIE Y. GORDON and KIMBERLY R. JONES are each charged with four counts of Aggravated Identity Theft. If convicted each count of Aggravated Identity Theft carries a mandatory two year prison term to run consecutive to any sentence imposed on the Bank Fraud count. Bank Fraud is punishable by up to 30 years in prison and a one million dollar fine.

The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by Social Security Administration Office of Inspector General (SSA-OIG), the Federal Bureau of Investigation, the Secret Service, the United States Postal Inspection Service, the Seattle Police Department and the King County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Norman Barbosa as part of the U.S. Attorney’s Office Working Group on Identity Theft.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.

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