Acting Attorney General Robert Lougy announced that the ringleader in a counterfeit check scheme was sentenced to state prison today for stealing $590,000 from various banks by depositing counterfeit checks and withdrawing the check amounts before the fraud was discovered.
Harold Stephens, 32, of Elizabeth, was sentenced to 11 years in state prison by Superior Court Judge Michael Toto in Middlesex County. Stephens pleaded guilty on Jan. 15 to second-degree charges of theft by deception and money laundering.
He was sentenced to six years on the theft charge and a consecutive term of five years for money laundering. Stephens is jointly and severally liable with his two co-defendants for paying full restitution of $590,354.
On March 14, Judge Toto sentenced Michael Caldwell, 40, of Irvington, to seven years in state prison and sentenced Janilyn Roman, 33, of Orlando, Fla., to six years in state prison. Each of those co-defendants pleaded guilty on Aug. 3, 2015 to second-degree theft by deception for their roles in the counterfeit check scheme.
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 $590,354 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The defendants targeted banks that allow funds from deposited checks to be withdrawn by their customers the next day.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.