Ukraine Resident Pleads Guilty for Role in Sophisticated International Scheme to Steal Money From U.S. Bank Accounts
A U.S. citizen who previously resided in Ukraine pleaded guilty to conspiracy to commit bank fraud.
According to court documents, Harold Sobel, 69, was a member of an international criminal enterprise that unlawfully debited money from the bank accounts of unknowing U.S. victims. Members of the criminal enterprise created shell companies for the purpose of receiving victim funds and created fake websites for the shell companies that claimed to offer products or services, such as cloud storage. Members of the criminal enterprise executed unauthorized debits against victims’ bank accounts, while falsely representing to banks that the debits were authorized by the victims as payment for the non-existent products and services.
“The department will prosecute members of international criminal enterprises who defraud Americans and deceive U.S. banks,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Regardless of where they are located, the department will pursue the perpetrators of these fraud schemes.”
“A sophisticated transnational criminal enterprise executed false debits against unsuspecting victims and deceived banks– victimizing American consumers and financial institutions in the process,” said Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s Criminal Investigations Group. “The guilty plea demonstrates the tenacity and resolve of the U.S. Postal Inspection Service and its law enforcement partners to hold criminals accountable for their unscrupulous actions.”
Unauthorized debits against victim accounts, caused by conspirators, resulted in returned transactions and high return rates that often generated scrutiny from the banks. To both conceal and continue making these unauthorized debits, members of the criminal enterprise made misrepresentations to the financial institutions about the transactions, claiming that they were authorized. In some cases, members of the criminal enterprise caused the accounts used by the criminal enterprise to also make “micro debits” against other bank accounts controlled and funded by or for the criminal enterprise. The “micro debits” were used to artificially lower the return rates to levels that conspirators believed would reduce bank scrutiny and thereby lessen the likelihood of closure of the accounts used by the criminal enterprise. The criminal enterprise also operated a call center that fielded complaints from victims of the unauthorized debits. The call center sought to dissuade victims from making reports to the victims’ banks and to government agencies.
As part of the enterprise, Sobel opened bank accounts in the United States at the direction of a co-conspirator who organized and conducted the affairs of the enterprise from outside the United States. For example, on or about Oct. 16, 2019, Sobel opened four business deposit accounts at a bank branch in Las Vegas. Sobel opened the accounts for a shell company called “Silver Safe Box” and listed himself as the sole member and authorized signer in the account opening documentation. The criminal enterprise then funded “micro debits,” designed to lower return rates, through the Silver Safe Box accounts. Between approximately December 2019 and January 2021, the Silver Safe Box accounts funded over 800,000 “micro debits” in amounts ranging from $0.99 to $1.85. Sobel also recruited at least two associates in the United States to help the foreign co-conspirator, among other things, open additional bank accounts and register shell companies.
Sobel’s participation also involved providing support for the activities of the criminal enterprise’s call center in Ukraine. Sobel devised a script to be used in response to complaints from victims by the call center’s personnel to retain as much of the criminal enterprise’s proceeds as possible, and – only on those occasions where those efforts failed – to then issue full refunds, in order to dissuade victims from making reports to the victims’ banks and government agencies. Sobel also devised a metric by which he and the foreign co-conspirator could evaluate the effectiveness of the call center’s personnel. As part of his guilty plea, Sobel admitted that more than $1.5 million in victim debits were reasonably foreseeable to him.
Sobel pleaded guilty to conspiracy to commit bank fraud. He is scheduled to be sentenced on Oct. 12 and faces a maximum penalty of 30 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Postal Inspection Service is investigating the case.
Trial Attorneys Meredith Healy and Wei Xiang of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Mina Chang of the District of Nevada are prosecuting the case. The U.S. Attorney’s Office for the Southern District of Texas provided substantial assistance.