New York Man Indicted in Credit Card ‘Bust Out’ Scheme to Defraud Banks
NEWARK, N.J. – A New York man was indicted today by a federal grand jury in connection with a scheme to defraud banks by using stolen and altered identities to fraudulently obtain credit cards and then using those cards to make millions of dollars in charges that were never repaid, Acting U.S. Attorney Rachael A. Honig announced.
Mohammad Mushtaq, 56, of Valley Stream, New York, is charged with one count of conspiring to defraud financial institutions, five counts of bank fraud, one count of access device fraud, and one count of aggravated identity theft.
According to documents filed in this case and statements made in court:
Mushtaq and his conspirators engaged in a scheme to use stolen and altered identities to obtain credit cards from financial institutions and then use those credit cards to make purchases that they had no intention to repay, leaving the financial institutions to bear the losses.
Mushtaq and his conspirators used the personal identifying information of people, including dates of birth, drivers’ license numbers, and Social Security numbers, to create “synthetic identities,” sometimes by pairing the name and Social Security number of actual persons with a fictitious birthdate, and sometimes by pairing the person’s Social Security number with a fictitious name and birthdate. They often used the name and Social Security number of a minor and altered the birthdate to make the identity appear to be that of an adult. Mushtaq altered the personally identifying information of his own spouse and minor child in this fashion to create fraudulent identities that were then used in furtherance of the scheme.
Mushtaq and his conspirators used the stolen and synthetic identities to obtain lines of credit, primarily through opening credit card accounts at financial institutions (the “fraud cards”). The fraud cards were maintained in good standing with the financial institutions long enough to establish the creditworthiness of the stolen and synthetic identities. Mushtaq and his conspirators then “busted out” the fraud cards by making large purchases and never repaying the debts.
Mushtaq’s conspirator, Asif Ali, also established numerous purported companies that did little or no legitimate business (the “sham companies”). Mushtaq and Ali used these sham companies to make hundreds of thousands of dollars’ worth of charges to the fraud cards, which were then deposited in bank accounts opened in the sham companies’ names.
The charge of conspiring to defraud financial institutions and the bank fraud charges each carry a maximum penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greatest. The access device fraud charge carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The aggravated identity theft charge carries a mandatory penalty of two years in prison, which must be served consecutively to any other term of imprisonment imposed.
Asif Ali, Tassadiq Hussain, and Shahid Akhtar previously pleaded guilty in connection with their roles in this and related schemes. Ali is awaiting sentencing before U.S. District Judge Anne E. Thompson. Hussain and Akhtar were sentenced by Judge Thompson to 41 months and a sentence of time served, respectively.
Acting U.S. Attorney Honig credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero, with the investigation leading to today’s indictment.
The charges in the indictment are merely allegations, and the defendant is presumed to be innocent unless and until convicted.
The government is represented by Acting U.S. Attorney Rachael A. Honig.