Baltimore, Maryland - Robert Johnson, age 33, of Perry Hall, Maryland, pleaded guilty today to a wire fraud conspiracy and aggravated identity theft, related to a scheme to defraud the City of Baltimore through the reissuance of fraudulent checks for pay and benefits.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.
According to his guilty plea and court documents, Robert Johnson was employed in the Consumer Relations Service of the U.S. Department of Veteran’s Affairs. Johnson admitted that from July 11, 2013 through August 2, 2013, he and his co-conspirator, who was employed as an accountant in the Finance Department of the City of Baltimore, conspired to defraud the City of Baltimore. During the time of the conspiracy, Baltimore City employees who left their employment were entitled to a lump sum check of any pay and benefits for which they qualified. Johnson and his co-conspirator used the financial and identity information of former employees to request fraudulent employee benefit payout checks, which Johnson then deposited into his personal account and used for the benefit of the conspirators.
According to his plea agreement, Johnson’s co-conspirator identified individuals who had received and cashed large lump sum payments and then requested that such checks be reissued, as if they had not been received. These duplicate checks were printed at the Baltimore City Finance Office, where the co-conspirator stole the checks. The co-conspirator delivered the checks to Johnson, endorsed “Pay to the Order of Robert Johnson,” purportedly signed by the recipient. Johnson endorsed and cashed the checks, and deposited the proceeds into a bank account he controlled. Johnson used the funds for his own purposes and to fund meals and other purchases for the benefit of his co-conspirator.
For example, on July 11, 2013, Johnson deposited a check made out to Victim 1, in the amount of $14,741.09, and fraudulently endorsed to Johnson with a forged signature of Victim 1. On July 31, 2013, Johnson deposited a check made out to Victim 2, in the amount of $58,485.91. Again, the check was endorsed to Johnson with a forged signature of Victim 2. Both victims had previously received and cashed their initial lump sum payment checks and the duplicate checks were issued and endorsed to Johnson without their knowledge or permission.
After Johnson attempted to wire some of the funds to pay off an account at a different financial institution, Johnson’s bank was alerted to the suspicious transactions and referred the matter to the City of Baltimore Office of the Inspector General, who sought the assistance of the Finance Department in determining the authenticity of the endorsements. Johnson’s co-conspirator was tasked with the investigation and notified Johnson of the problem. According to Johnson’s plea agreement, the co-conspirator attempted to derail the investigation and obtain release of the funds by the bank by claiming to have spoken with the check recipients, who confirmed that the endorsements were genuine. In fact, neither statement was true. Meanwhile, Johnson’s bank had reversed the deposits and returned the funds to the City of Baltimore, leaving a large deficit in Johnson’s account balance. Johnson obtained funds from his co-conspirator to repay the amount due.
Over the course of the conspiracy, Johnson fraudulently obtained between $70,000 and $120,000, all of which was ultimately recovered.
Johnson faces a maximum sentence of 20 years in prison for the wire fraud conspiracy; and two years in prison, consecutive to any other sentence imposed, for aggravated identity theft. U.S. District Judge George L. Russell III has scheduled sentencing for January 16, 2015 at 11 a.m.
United States Attorney Rod J. Rosenstein praised the Baltimore Office of Inspector General, Baltimore City Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Tamera L. Fine and Special Assistant U.S. Attorney Josh Felsen, a cross-designated Baltimore City Assistant State’s Attorney, who are prosecuting the case.