Leader In $1.5 Million Fraudulent Check Cashing Scheme Pleads Guilty
Also Admitted to Participating in a Fraudulent Tax Refund Scheme
Baltimore, Maryland – Friday James, age 43, of Laurel, Maryland, pleaded guilty today to conspiracies to commit bank fraud and make false claims, and to aggravated identity theft arising from schemes to defraud financial institutions and make false claims for tax refunds.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service - Washington Division; and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation (IRS-CI), Washington, D.C. Field Office.
According to his plea agreement, from approximately 2007 through November, 2013, James conspired with others to defraud various financial institutions by depositing counterfeit and stolen checks and withdrawing the funds before the deposits were identified as fraudulent. James became involved in the scheme through an individual he worked with buying and selling cars. James and this individual were originally from Nigeria and the individual had loaned James money. Initially James accompanied the individual (the co-conspirator) to the State Office Building to complete paperwork and register businesses. The two men would then obtain post office box addresses and open bank accounts for the businesses. They would then deposit stolen, altered, and counterfeit checks into the accounts and withdraw the funds before the checks could bounce.
The men used other individuals to conduct many of the transactions, including LaKeisha Butler, Kesa Baker, Carlvester Davis and others. According to the plea, all of these individuals opened post office boxes for businesses, in most cases using the identities of other people, including fake identifications bearing the picture of the co-conspirator and the personal information of an identity theft victim. These same individuals also opened bank accounts for the businesses, again often using stolen identities and fake identifications. The paperwork for these transactions was prepared by James or the co-conspirator, and the mailbox keys, checkbooks and debit cards were provided back to them. Only James or the co-conspirator picked up the mail from the post office boxes.
Additional co-conspirators were recruited to deposit the counterfeit checks and to withdraw the money, including Naimah Okail, Isaac Kusimo, and others. James and the co-conspirator would pick up the individuals and provide them with a check to deposit, or a check to cash, usually completing the checks in front of the cashers and obviously signing a name which was not theirs. James and/or the co-conspirator would transport the recruited individual to a bank, where that person used his or her own identification and the checks provided. The checks often had a telephone number written on the checks, which would be answered by James or his co-conspirator if the bank called to confirm that the check was genuine. Once the check was cashed, the money would be given to the James or the co-conspirator, and a portion (usually 5-10%) paid to the recruit.
During James’ participation in the bank fraud conspiracy, he and his co-conspirators obtained extensions of credit from federal insured financial institutions of $1,519,429.52 and attempted to obtain extensions of credit of $3,149,616.10. More than 10 financial institutions and individuals were victimized by this scheme.
From March, 2011 through in or around October 2013, James knew that electronic tax refunds were being deposited into the business bank accounts, and that since the business was fraudulent, no legitimate tax refunds would be due the business. He repeatedly withdrew these funds immediately after they were deposited. James and his co-conspirators obtained $389,592.05 in false claims for stolen identity tax refunds, and another $957,377.05 in false claims for tax refunds were submitted but not paid. The total loss foreseeable to James was between $550,000 and $1,500,000.
As part of his plea agreement, James has agreed to the entry of a restitution order for the full amount of the victims’ actual losses during the time James was participating in the scheme, currently computed to be approximately $1,909,021.57. That restitution shall be due and payable immediately upon sentencing.
Co-defendants LaKeisha Butler, age 33, of Columbia, Maryland; Kesa Baker, age 43, of Baltimore; Naimah Okail, age 35, of Baltimore; and Isaac Kusimo, age 30, of Takoma Park, Maryland have all pleaded guilty to their roles in the scheme and are awaiting sentencing. The remaining defendants are scheduled for trial on June 6, 2016.
James faces a maximum of 30 years in prison and a $1,000,000.00 fine for bank fraud conspiracy; 10 years in prison and a $250,000.00 fine for the false claims conspiracy; and a mandatory two years in prison, consecutive to any other sentence imposed, for aggravated identity theft. Chief U.S. District Judge Catherine C. Blake scheduled his sentencing for August 2, 2016, at 9:00 a.m.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Inspection Service and IRS – CI for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine, who is prosecuting the case.