TRENTON –Attorney General Gurbir S. Grewal announced that a fourth leader was sentenced to state prison today in connection with an elaborate fraud scheme in which the participants used fictitious identities to obtain credit cards and open bank accounts that they used to steal approximately $3 million from various banks. A total of 14 defendants were charged in the joint state and federal investigation.
Aqeel Sheikh, 58, of Newark, N.J., was sentenced today to seven years in state prison by Superior Court Judge Candido Rodriguez Jr. in Union County. He pleaded guilty previously to charges of conspiracy and money laundering. Another ringleader was sentenced last month. Naim Tahir, 51, of Clark, N.J., was sentenced on Nov. 15 to seven years in prison by Superior Court Judge Robert Kirsch. He also pleaded guilty to charges of conspiracy and money laundering.
Two additional leaders of the scheme were sentenced to prison earlier this year by Judge Rodriguez as a result of the investigation. Shaikh Dawood, 61, of Cranford, N.J., pleaded guilty to second-degree theft by deception and was sentenced to eight years in prison on March 8, 2019. Mohammad Zaman, 46, of Staten Island, N.Y., pleaded guilty to second-degree theft by deception and was sentenced to five years in prison on Feb. 1, 2019. A fifth defendant, Hassan Shahbaz, 46, of Jersey City, N.J., pleaded guilty to first-degree charges of conspiracy and money laundering. He faced a recommended sentence of eight years in prison, with three years of parole ineligibility, but he was deported prior to sentencing.
Deputy Attorney General Thomas Huynh and former Deputy Attorney General Brian Faulk took the guilty pleas, and DAG Huynh handled the sentencing hearings for the Division of Criminal Justice Financial & Cyber Crimes Bureau. The defendants were charged in an investigation by the Division of Criminal Justice, U.S. Postal Inspection Service, U.S. Homeland Security Investigations, New Jersey Office of Homeland Security & Preparedness, U.S. Social Security Administration Office of Inspector General, and New Jersey Department of the Treasury’s Office of Criminal Investigation. Those agencies were assisted by the Hudson County Prosecutor’s Office, Union County Sheriff’s Department, Clark Police Department, Secaucus Police Department, and Jersey City Police Department.
“This type of credit card fraud involving stolen and false identities imposes huge costs on the financial services industry and ultimately on consumers,” said Attorney General Grewal. “We are committed to working with the industry and our state and federal partners to investigate and aggressively prosecute these crimes.”
“This was a complex case involving hundreds of fraudulent credit cards and millions of dollars in transactions,” said Director Veronica Allende of the Division of Criminal Justice. “I commend the attorneys and detectives in our Financial & Cyber Crimes Bureau and all of the agencies that partnered with us to skillfully investigate this criminal ring and secure prison sentences for its leaders.”
“This complex sort of scheme of credit card fraud harms both commerce and consumers and nationwide results in billions of dollars in financial losses yearly,” said Brian Michael, Special Agent in Charge, Homeland Security Investigations (HSI), Newark. “In this case, all of the underhanded maneuvering of the defendants was no match for the cooperative efforts of law enforcement that exposed the scheme and delivered justice.”
“This investigation is an excellent example of a partnership between state and federal law enforcement agencies, working together to bring down a sophisticated bank fraud network,” said USPIS Inspector In Charge James V. Buthorn. “I fully commend the hard work put forth by all of the agencies involved, which resulted in bringing this group of fraudsters to justice. Postal Inspectors will continue to tirelessly investigate these types of financial crimes that utilize the U.S. Postal Service to facilitate illicit activities.”
“This elaborate scheme harmed not only the financial services industry, but also the integrity of the Social Security number as an identifier,” said John Grasso, Special Agent-in-Charge of the Social Security Administration Office of the Inspector General, New York Field Division. “I want to thank the Attorney General’s Office and our Federal and State law enforcement partners for pursuing this investigation and dismantling the scheme. We will continue to work with other agencies to prevent the misuse of Social Security numbers for personal gain.”
“A criminal enterprise of this scale and sophistication speaks to the modern challenges of protecting consumers and financial institutions from fraud,” said N.J. State Treasurer Elizabeth Maher Muoio. “Treasury is proud to have contributed to this successful effort and we stand ready to continue working with our state and federal partners to ensure that perpetrators of similar financial schemes are brought to justice.”
Three other defendants – Rilvan Junaid, Mohammad Shakeel and Mohammad Khan – pleaded guilty to third-degree charges and were sentenced to probation. Five defendants – Aqeel Ahmed, Shama Musir, Faisal Mushtq, Shakeela Ahmed, and Huda Ahmed – were admitted into the Pre-Trial Intervention Program and had their charges dismissed. One defendant, Muhammad Bhatti, 68, remains a fugitive.
The defendants created “synthetic” identities by pairing stolen Social Security numbers with fictitious names and birth dates, using them to open numerous checking and credit card accounts. They opened the accounts online to avoid face-to-face interaction with the financial institutions. Tahir was primarily responsible for creating the synthetic identities and applying for the bank accounts and credit cards, using personal identifying information supplied by Zaman.
Bad checks were deposited into the bank accounts so they could be used to make payments on the credit cards, which temporarily inflated the lines of credit on the cards. In addition, funds were withdrawn from the bank accounts via ATM and U.S. Postal Money Order Purchases before the bad checks were discovered. The defendants ultimately “busted out” the credit cards by running up the unpaid balances until they reached or exceeded the credit limits.
The scheme included a group of “merchants,” led by Shahbaz and Sheikh, who in many cases ran shell businesses set up solely to participate in the fraud. Under the direction of Dawood and other defendants, the merchants swiped the fraudulent credit cards using point of sale terminals and received reimbursement from credit card processing companies via wire transfer, while never actually providing any merchandise or services. The defendants split the proceeds. The bank accounts of the shell companies also were used to launder the proceeds of the scheme, with checks being written from one company to another as if they were conducting business.
Shahbaz, Sheikh, and Dawood set up USA United Trading, a business owned by Shahbaz that was opened for the sole purpose of defrauding financial institutions. USA United Trading held itself out as a carpet retailer, with a store front in Jersey City. USA United Trading conducted approximately $1.2 million in fraudulent credit card transactions.
The investigation began when the U.S. Postal Inspection Service (USPIS) received a referral from Wells Fargo Bank about a bad check case the bank was investigating. USPIS enlisted agents of the Social Security Administration and U.S. Homeland Security Investigations in Newark, who in turn enlisted the state agencies.