Leader Of Miami Crew Sentenced To 63 Months In Prison For Defrauding Banks And Cryptocurrency Exchange Of More Than $4 Million
Damian Williams, the United States Attorney for the Southern District of New York, announced that HENRY PEREZ was sentenced today to more than seven years in prison for leading a multi-year cellphone account takeover fraud and identity theft conspiracy. PEREZ impersonated legitimate cellphone accountholders in order to fraudulently obtain smartphones and electronic devices that he charged to compromised accounts. The fraud scheme also caused more than 300 victims across the United States to lose cellphone service for a period of time; during the time that PEREZ controlled victims’ phone numbers, “inbound” text messages intended for victims were instead received by PEREZ. PEREZ’s sentence was imposed by U.S. District Judge Richard M. Berman, before whom PEREZ previously pled guilty to conspiracy to commit wire fraud.
U.S. Attorney Damian Williams said: “Henry Perez led a sophisticated cellphone fraud and identity theft scheme. He impersonated victims, changed victims’ account information so victims would not receive fraud alerts, charged purchases to victims’ accounts, and deprived victims of cellphone service. Today’s sentence sends a clear message: Those who exploit victims’ identifying information for financial gain will pay a heavy price.”
According to the allegations in the Indictment, public court filings, and statements made in court:
From June 2017 through December 2019, PEREZ was the leader of a criminal fraud ring that committed cellphone account takeover fraud and identity theft across the United States, including in the Southern District of New York. The scheme’s primary objective was to obtain new, valuable electronic devices, including iPhones, and charge these purchases to victims’ accounts, without the knowledge or consent of the victim accountholders. Over the course of the conspiracy, participants in the scheme attempted to fraudulently obtain more than $1 million worth of devices and, in fact, fraudulently obtained more than $530,000 worth of such devices (e.g., iPhones, iPads, and AirPods), by charging purchases to victims’ accounts.
To perpetrate the scheme, members of the conspiracy, including PEREZ, used stolen identity information to impersonate victims who had cellphone accounts with a particular cellphone service provider (“Provider-1”). Members of the conspiracy then called customer service representatives of Provider-1 and used social engineering techniques to take over accounts by making various misrepresentations, including impersonating accountholders and expressing a purported need to regain access to their accounts. Through these misrepresentations, conspirators were able to gain unauthorized access to, and control of, accounts belonging to victim accountholders. Once they gained access, members of the conspiracy made various unauthorized changes to victim accounts, so that fraud alerts and emails relating to account changes were sent to a conspiracy member, rather than to the legitimate accountholders. Participants in the conspiracy then purchased new electronic devices, which they charged to victim accounts, without the knowledge or consent of the victims.
In many instances, conspirators arranged for the fraudulently ordered devices to be shipped to more than 50 different addresses. In other instances, members of the scheme, including PEREZ, personally entered stores operated by Provider-1 to pick up fraudulently obtained devices. In total, participants in the conspiracy conducted in-store pickups of fraudulently obtained devices in at least 10 different states.
Once they had successfully exploited a particular victim’s account, members of the conspiracy typically relinquished control of that account, and moved on to exploiting other victim accounts. During the period in which the conspiracy compromised, and retained control of, a particular victim’s cellphone number, that victim typically lost cellphone service. In total, the scheme caused more than 300 victims across the United States to lose cellphone service for a period of time. During the time that a victim lost cellphone service, their phone line remained in service—but it was controlled by PEREZ’s conspiracy, rather than the victim; thus, during that time, “inbound” text messages intended for that victim were instead received by PEREZ.
PEREZ was integrally involved in all aspects of the scheme, including using victims’ personal identifying information to dupe Provider-1; gaining unauthorized access to victim accounts; making unauthorized changes to victim accounts; receiving fraudulently obtained devices; and recruiting, directing, and paying a subordinate, including supplying that subordinate with victim information. In addition, PEREZ gained access to victims’ sensitive information, including their addresses, certain financial information, and in some cases, their relatives’ names.
In addition to his prison sentence of 88 months, PEREZ, 34, of Fort Lee, New Jersey, was sentenced to three years of supervised release. He was also ordered to pay restitution of $539,654.96 and forfeiture of $532,374.96.
* * *
Mr. Williams praised the New York Office of Homeland Security Investigations and its El Dorado Task Force for its outstanding work on this case.
This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Michael D. Neff is in charge of the prosecution.