TRENTON, N.J. – A Passaic County, New Jersey, man today admitted opening bank accounts and recruiting others to open bank accounts as a conduit for stolen funds in connection with a wide-ranging business email compromise scheme, U.S. Attorney for the District of New Jersey Craig Carpenito announced.
According to a statement released by Federal authorities, Mr. Lawrence Espaillat, 41, of Clifton, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of conspiracy to commit wire fraud.
According to documents filed in this and other cases and statements made in court:
From March 2017 to June 2018, Espaillat, conspirators Corry Pringley and Amanda Suazo, and others participated in the scheme to steal more than $1 million from individual and corporate victims. The scheme involved recruiting “mules” – including Espaillat, before he rose to the level of recruiter – Suazo and Pringley, to provide their personal identifying information.
Officials say this information was used to incorporate sham businesses with the N.J. Department of the Treasury under the mules’ names. The mules eventually opened bank accounts in the names of the sham corporations.
A related cyberattack aspect of the scheme involved creating email addresses mimicking – but differing slightly from – legitimate email addresses of supervisory employees at various companies, vendors that did business with those victim companies, mortgage lenders that dealt with individuals in connection with real estate purchases, and brokerage firms and accountants who provided financial services. The conspirators used these false email addresses to send emails that appeared to be requests for payment of legitimate invoices or debts owed by the victims.
The victims were deceived into transferring funds by wire into the bogus bank accounts opened by the money mules and controlled by the conspirators. After the victims complied with the fraudulent wiring instructions, Espaillat, Suazo and Pringley, under the direction of other conspirators, quickly debited thousands of dollars from the accounts through in-person and ATM withdrawals and debit card purchases.
They also transferred the funds to foreign bank accounts they controlled. Espaillat, Suazo and Pringley kept a fraction of the proceeds as payment.
For example, over a three-day period in April 2018, a corporate victim in Texas deposited $3.8 million in a bank account opened by Pringley and controlled by Espaillat, Pringley and Suazo, who withdrew or transferred more than $1 million from the account.
The conspiracy charge to which Espaillat pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross pecuniary gain/loss. Sentencing is scheduled for July 30, 2019.
Suazo and Pringley pleaded guilty on Jan. 17, 2019, and Feb. 14, 2019, respectively, to separate pieces of information charging each with one count of conspiracy to commit wire fraud. They are awaiting sentencing.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, 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 guilty plea.