Acting Attorney General John J. Hoffman announced that the ringleader in a counterfeit check scheme pleaded guilty today to conspiring with two co-defendants and others to steal $620,000 from various banks by creating counterfeit checks.
The two co-defendants pleaded guilty previously.
The ringleader, Harold Stephens, 32, of Elizabeth, pleaded guilty today to second-degree charges of theft by deception and money laundering before Superior Court Judge Michael Toto in Middlesex County.
The state will recommend that Stephens be sentenced to 11 years in state prison, six years on the theft charge and a consecutive term of five years for money laundering. Under the plea agreement, he also is jointly and severally liable with his two co-defendants for paying full restitution of $620,000.
Michael Caldwell, 40, of Irvington, and Janilyn Roman, 32, of Orlando, Fla., each pleaded guilty before Judge Toto on Aug. 3, 2015 to second-degree theft by deception for their roles in the counterfeit check scheme. Under their plea agreements, the state will recommend that Caldwell be sentenced to seven years in state prison and Roman be sentenced to six years in state prison. Judge Toto scheduled sentencing for Stephens, Caldwell and Roman for March 14.
The defendants were indicted on Feb. 25, 2015 in an investigation by detectives and inspectors of the New Jersey State Police Official Corruption North Unit, the Division of Criminal Justice Financial & Computer Crimes Bureau, and the Newark Division of the U.S. Postal Inspection Service.
Between January 2012 and September 2014, Stephens, Caldwell, Roman and other participants in the scheme deposited roughly 300 counterfeit checks in amounts totaling over $1.6 million into numerous third-party bank accounts at branch offices of five major banks in New Jersey, Pennsylvania, Delaware and Florida. Stephens, Caldwell and Roman then stole approximately $620,000 by withdrawing funds from the deposit of the counterfeit checks before the banks discovered the fraud.
Stephens purchased legitimate checks from people for a small price, often targeting customers entering check cashing businesses. He then used a computer graphics program to print counterfeit checks which matched the legitimate checks but which were written for large sums payable to other persons. Stephens used Caldwell, as a “recruiter” to obtain bank account information, debit cards and pin numbers from people willing to be named as payees on the counterfeit checks.
The defendants would then use the payees’ bank accounts to deposit the checks and withdraw the proceeds, a process Stephens referred to as “washing” the checks. The recruiters and payees were paid by the defendants for their roles in the scheme. Roman was involved in depositing counterfeit checks in Florida.
The defendants targeted banks that allow funds from deposited checks to be withdrawn by their customers the next day. In some instances, the payees would open a new account that would be used to “wash” counterfeit checks. To further launder the stolen funds, Stephens would use them to purchase money orders and gift cards for various stores.
Stephens and Caldwell were arrested at their homes on Aug. 6, 2014, by members of the investigating agencies. Roman was arrested the following day, Aug. 7, 2014, by the Orlando Police Department. She was extradited to New Jersey with the assistance of the U.S. Marshals Service.