Participant In Multi-Million Dollar Fraudulent Credit Repair Scheme Sentenced In Manhattan Federal Court To 51 Months In Prison
Preet Bharara, the United States Attorney for the Southern District of New York, announced that EDWIN MANSOUR, JR. was sentenced today in Manhattan federal court to 51 months in prison for his role in what is believed to be the largest known credit repair fraud scheme ever charged. His co-defendant, Denise Hudson was sentenced earlier this month to 30 months in prison. MANSOUR and Hudson were ordered to pay more than $9.3 million in restitution for the losses caused by the scheme. In October 2012, MANSOUR and Hudson each pled guilty to one count of conspiracy to commit bank fraud and Hudson also pled guilty to one count of conspiracy to cause damage to a protected computer. Their sentences were imposed by U.S. District Judge Naomi Reice Buchwald. Edwin Jacquet (“Jacquet”), the leader of the scheme, was sentenced by Judge Buchwald to 63 months in prison in December 2012.
Manhattan U.S. Attorney Preet Bharara said: “A credit score is a critical data point relied upon by banks and other lenders in deciding whether to extend loans, and a good one takes years to develop and must be carefully maintained. As a result, the integrity of credit reporting is crucial for the proper functioning of the financial system. Mansour will now pay a steep price for attempting to corrupt that system for his own benefit.”
According to the Indictment to which MANSOUR and Hudson pled guilty, statements made during their guilty pleas and sentencing proceedings, and other court documents:
Consumer reporting agencies, commonly known as “credit bureaus,” are businesses that provide reports to third parties about the credit-worthiness of consumers. Credit bureaus gather information used to generate credit reports from many sources, including “furnishers.” Furnishers include entities that provide consumers with credit, such as credit card companies, mortgage lenders, automobile lenders, and department stores.
In September and October 2007, Highway Furniture, Inc. (“Highway Furniture”), a Brooklyn-based business that Jacquet managed, became a furnisher. In July 2008, New York Funding Group Inc. (“New York Funding”), a Long Island-based business which Jacquet created, also became a furnisher. These businesses became furnishers by entering into various agreements with at least two credit bureaus that allowed Highway Furniture and New York Funding to furnish their customers’ data to the credit bureaus with which they had agreements.
From 2007 through 2009, through Highway Furniture and after that through New York Funding, MANSOUR, Hudson, and others including Jacquet, engaged in a scheme to fraudulently improve the credit histories and credit scores of thousands of individuals who were purported customers of the two entities (the “Purported Customers”). New York Funding and Highway Furniture obtained these customers principally by working through a network of brokers who promised the customers that the brokers could have their credit “repaired.” In exchange for thousands of dollars in fees, MANSOUR, Hudson, and their co-conspirators provided credit bureaus with fictitious information showing that Highway Furniture and New York Funding had extended credit to the Purported Customers and that the loans had been, or were being, repaid. In fact, the individuals had never been extended credit by Highway Furniture or New York Funding. The purpose of providing the fraudulent information to the credit bureaus was to generate fake positive credit history and, in so doing, improve the credit scores of the Purported Customers.
Over the course of the scheme, MANSOUR, Hudson, and their co-conspirators added nearly 3,000 fake lines of credit to the credit history of hundreds of Purported Customers of New York Funding and Highway Furniture. After having their credit fraudulently improved, the Purported Customers obtained more than $47.8 million in loans, including mortgages, car loans, student loans, and credit card loans. The losses sustained by the lenders who extended credit to the purported customers and who could not repay the loans, totaled more than $9.3 million.
MANSOUR, Hudson, and their co-conspirators also fraudulently improved the credit histories and credit scores of some of the Purported Customers by deleting accurate, but negative, credit information maintained by one or more credit bureaus. They did so by exploiting loopholes in a software tool called e-OSCAR that the credit bureaus made available to Highway Furniture, the purpose of which was to help resolve disputes about individuals’ credit histories. Instead, MANSOUR, Hudson, and their co-conspirators used their access to e-OSCAR as part of the fraudulent credit repair scheme. Over the course of the scheme, MANSOUR, Hudson, and their co-conspirators fraudulently deleted or modified over 4,400 legitimate debts from the credit files of hundreds of people.
In addition to the prison terms and restitution, Judge Buchwald sentenced MANSOUR, 45, of Staten Island, New York, and Hudson, 49, of Brooklyn, New York, to two years of supervised release.
Mr. Bharara praised the outstanding efforts of United States Secret Service in the investigation. He also thanked Experian Information Solutions, Inc., and TransUnion LLC for their assistance in the investigation.
In sentencing MANSOUR, Judge Buchwald commented on MANSOUR’s submission of a fraudulent claim for disaster assistance after Hurricane Sandy, and said: “What is ultimately so staggering is that he has been absolutely disrespectful of the legal system since his arrest.”
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Daniel W. Levy and Zachary A. Feingold are in charge of the prosecution.