Network of Transnational Fraudsters Indicted for Racketeering in Scheme to Steal Millions from American Consumers’ Bank Accounts
A federal grand jury in Los Angeles has returned an indictment charging 14 defendants for their participation in a years-long scheme to steal millions of dollars from American consumers’ bank accounts, the Justice Department announced today.
According to court documents, Edward Courdy, 73, of Hawaiian Gardens, California; Linden Fellerman, 67, of Las Vegas; Guy Benoit, 68, of Cyprus; Steven Kennedy, 54, of Canada; Sayyid Quadri, of Canada; Ahmad Shoaib, 63, of Canada; John Beebe, 52, of Honolulu; Michael Young, 41, of Hollywood, Florida; Lance Johnson, 52, of Laveen, Arizona; Jenny Sullivan, 46, of Denver; Veronica Crosswell, 35, of Long Beach, California; Eric Bauer, 65, of Huntington Beach, California; Randy Grabeel, 71, of Pittsburg, California; and Debra Vogel, 68, of Las Vegas, were members and associates of a racketeering enterprise that unlawfully debited money from the bank accounts of unknowing U.S. consumer-victims.
Through various members and associates, the enterprise obtained identifying and banking information for victims, and created shell entities that claimed to offer products or services, such as cloud storage. The enterprise then executed unauthorized debits against victims’ bank accounts, which it falsely represented to banks were authorized by the victims. Some of the unauthorized debits resulted in returned transactions, which generated high return rates. To both conceal and continue conducting unauthorized debits, the enterprise’s shell entities also generated “micro debits” against other bank accounts controlled and funded by or for the enterprise. The micro debits artificially lowered shell entities’ return rates to levels that conspirators believed would reduce bank scrutiny and lessen potential negative impact on the enterprise’s banking relations.
Co-conspirator Harold Sobel was previously convicted for his role in the scheme in Las Vegas federal court and sentenced to 42 months in prison. In a related civil case also filed in Los Angeles federal court, injunctive relief and settlements totaling nearly $5 million were obtained against various persons, including several who are charged in this criminal indictment.
“The scheme alleged in the indictment involved an elaborate plot to reach into consumers’ bank accounts and steal their hard-earned savings,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Department of Justice will use all of the tools at its disposal to prosecute such schemes.”
“This sophisticated scheme allegedly generated millions of dollars in revenue by stealing consumers’ personal information and then using that information to fraudulently reach straight into the bank accounts of thousands of Americans,” said U.S. Attorney Martin Estrada for the Central District of California. “The indictment alleges that an international network of fraudsters engaged in a wide-ranging ring which sought to victimize consumers while concealing their activities from banks and law enforcement authorities. Thanks to law enforcement, the defendants’ alleged efforts to continue this scheme have failed.”
“The U.S. Postal Inspection Service (USPIS) is committed to protecting the U.S. Postal Service and its customers, the American people,” said Inspector in Charge Eric Shen of the USPIS Criminal Investigations Group. “This case is illustrative of our efforts to protect American consumers from a sophisticated fraud scheme that cost American consumers millions of dollars. Postal Inspectors are proud to partner with the Department of Justice to put a stop to these types of schemes.”
Courdy, Fellerman, Benoit, Kennedy, Quadri, Shoaib, Beebe, Young, Johnson, Sullivan, Crosswell, and Bauer are charged with racketeering conspiracy and wire fraud; Grabeel and Vogel are charged with racketeering conspiracy. Some defendants made their initial court appearances yesterday. If convicted, each defendant faces a maximum penalty of 20 years in prison for racketeering conspiracy and, if applicable, 30 years in prison for each count of wire fraud. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The department urges individuals to be on the lookout for unauthorized debits to their accounts. Regularly check your bank, credit card, and other financial statements and contact your financial institution if you see a charge you do not recognize. Report any fraudulent debit you identify to law enforcement. Reports may be filed with the FTC at https://reportfraud.ftc.gov or at 877-FTC-HELP.
The USPIS is investigating the case.
Trial Attorneys Wei Xiang, Meredith Healy, and Amy Kaplan of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Monica Tait for the Central District of California are prosecuting the case. The U.S. Attorney’s Office for the Southern District of Texas provided substantial assistance.
The Consumer Protection Branch, in conjunction with the USPIS, is pursing wrongdoers who disguise the unlawful nature of business activities by, among other methods, artificially lowering financial account return rates. These tactics are designed to deceive banks, resulting in bank accounts remaining open and facilitating fraud schemes and other illegal activities, including schemes that debit consumers’ bank accounts without authorization, tech support scams, and subscription traps.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.