Jewelry Store Owners Sentenced For Roles In International, $200 Million Credit Card Fraud Scheme

TRENTON, N.J. – The two owners of a New Jersey jewelry store who used the business to further one of the largest credit card fraud schemes ever charged by the Justice Department were both sentenced today for their respective roles in the scheme, Acting U.S. Attorney William E. Fitzpatrick announced.

Vijay Verma, 49, and Tarsem Lal, 78, both of Iselin, New Jersey, were sentenced to 14 months in prison and 12 months of home confinement, respectively. Both previously pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to informations charging them with one count of access device fraud. Judge Thompson imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

Verma and Lal were indicted in October 2013 as part of a scheme to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Participants in the scheme doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions. These debts were incurred at Verma’s jewelry store, among many other locations, where Verma would allow fraudulently obtained credit cards to be swiped in phony transactions.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; then run up large charges.

The scope of the criminal fraud enterprise required other scheme participants to construct an elaborate network of false identities. Across the country, they maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.

Verma and Lal each admitted allowing others who came to their Jersey City, New Jersey, store, store to swipe cards they knew did not legitimately belong to them. Verma and Lal would then split the proceeds of the phony transactions with these other conspirators.

In addition to the prison terms, Judge Thompson sentenced Verma to three years of supervised release and Lal to three years of probation. Each defendant was fined $5,000 and ordered to pay forfeiture of $451,259.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher; postal inspectors from the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge James V. Buthorn; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s sentencings. He also thanked the U.S. Social Security Administration Office of Inspector General, Office of Investigations in New Jersey for assisting in the investigation.

The government is represented by Assistant U.S. Attorneys Zach Intrater and Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward of the office’s Asset Forfeiture Unit in Newark.

This case is part of efforts underway by the Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.  

Defense counsel:

Verma: Gerald Krovatin Esq., Newark

Lal: Paul Condon Esq., Jersey City, New Jersey