Former Morgan Stanley Financial Advisor Sentenced to Over 7 Years in Prison for Executing a Multimillion Dollar Ponzi Scheme
RALEIGH, N.C. – Shawn Franklin, Anthony Maryland, and Sabrina Wiggins Branch pleaded guilty today to defrauding financial institutions and other lenders by using synthetic identities to obtain credit cards and consumer loans with no intention of payment. All three individuals were living in the Eastern District during the multi-year conspiracy.
According to court documents and the government’s factual representations in open court, Franklin, age 48, began using synthetic identities in 2012. By coupling his own name and date of birth with a nine-digit number that looked like a social security number, Franklin created a new credit profile, otherwise known as a Credit Privacy Number (CPN). Individuals, like Franklin, with poor credit scores built fresh credit histories by adding a CPN as an authorized user to credit accounts belonging to other individuals with good credit scores. These “trade lines” enhanced the CPN’s creditworthiness, scamming lenders and credit card issuers into believing the CPN applicants have the ability and intent to pay-off indebtedness. Individuals using CPNs, however, lack the ability or intent to pay-off the loans and credit card balances.
Franklin had been a NC Medicaid provider. Ten of the names and SSNs he used to obtain credit belonged to actual NC Medicaid recipients. Franklin obtained fictitious NC driver’s licenses in these individuals’ names, bearing images of himself. With respect to credit cards, Franklin maximized the fraud proceeds by making bogus payments to the issuers. Such payments were immediately credited, restoring the credit limit. Before the credit issuer received notification that the payments were bogus, Franklin and others quickly made additional charges, resulting in significant losses.
Maryland, age 48, and Branch, age 39, used synthetic identities created in their own names by Franklin. Maryland obtained credit cards and consumer goods. Wiggins obtained credit cards and financed the purchase of two vehicles with CPNs.
Branch also conspired with Franklin to generate cash with the fraudulently obtained credit cards. They ran approximately $650,000 in fictitious charges through merchant accounts associated with her retail store in Wilmington’s Independence Mall. Branch paid Franklin his share of the proceeds in cash. Records showed she withdrew cash in amounts less than $10,000 to avoid the filing of currency transaction reports.
All three individuals pleaded guilty to Conspiracy to Commit Bank and Wire Fraud and faces a maximum penalty of 30 years in prison when sentenced. Franklin also pleaded guilty to Aggravated Identity Theft for his use of the names and personal identifiers of ten NC Medicaid recipients. He faces an additional mandatory two years in prison, consecutive to any other term imposed.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after Magistrate Judge James E. Gates accepted the plea. The Federal Bureau of Investigation, United States Secret Service, United States Social Security Administration, and the North Carolina State Bureau of Investigation are investigating the case and Assistant U.S. Attorney Susan B. Menzer is prosecuting the case.