Montgomery Brothers Sentenced for Check Fraud Scheme
Montgomery, Alabama - On November 6, 2014, Derrick Gadsden, 34 years old of Montgomery, Alabama, was sentenced to 240 months imprisonment followed by three-years of supervised release for conspiracy to commit wire fraud. Derrick Gadsen’s brother, David Gadsden, 45 years old of Montgomery, Alabama, was sentenced to 120 months imprisonment followed by three-years of supervised release for conspiracy to commit wire fraud. Both of the brothers were ordered to pay $1,000,000.00 in restitution to the victims of their scheme.
From approximately 2006 to 2013, the Gadsden brothers ran a check fraud scheme from David Gadsden’s and Derrick Gadsden’s places of business in Montgomery, Alabama. David Gadsden’s place of business was supposedly an automotive garage, and Derrick Gadsden’s was a tire shop. However, these businesses were actually the nerve center of the scheme that the Gadsdens ran. The Gadsdens or their assistants would find vulnerable people, such as those who were in dire financial straits, and lure them into the scheme with the promise of money. These people were the “runners” in the scheme. The Gadsdens would enlist the runners to open bank accounts at different financial institutions, transport them to the banks, and provide the minimum amount to open up a checking account. After the initial deposit, no further deposits were placed into these accounts. The Gadsdens would then have the runners order checks for these accounts, and have the checks sent overnight to them.
The next members of the scheme were the “buyers” who placed orders with the Gadsdens to purchase large ticket items such as trailers, shingles, plywood, washers, and dryers. These buyers wanted to pay much less than market or wholesale price for these items. Once orders were placed, the Gadsdens or their assistants would take the runners to various merchants and they would pay for the merchandise with the checks the Gadsdens had acquired even though there were insufficient funds in the account. The checks were accepted by the merchants for sale of the items, and the Gadsdens were able to leave the businesses with their purchases. They would then resell or trade the items for a profit to their fraudulent buyers.
The scheme involved approximately two-hundred bank accounts, and at least seven different financial institutions. Over one hundred victims have been identified in this scheme. In addition to Alabama, the scheme also affected the states of Florida, Mississippi, Georgia, and Louisiana.
The case was investigated by the United States Secret Service, the Montgomery Police Department, Opelika Police Department, and the Alabama Alcoholic Beverage Control Board. The case was prosecuted by Assistant United States Attorney Denise O. Simpson.
PRESS CONTACT: Clark Morris
Telephone: (334) 551-1755
Fax: (334) 223-7617