A New York man and a Middlesex County man were sentenced to today to federal prison terms for their respective roles in one of the largest credit card fraud schemes ever charged by the Justice, U.S. Attorney Craig Carpenito announced.
According to authorities, Qaiser Khan, 53, of Valley Stream, New York, previously pleaded guilty to an information charging him with one count of conspiracy to commit bank fraud and today was sentenced to six months in prison.
While Sat Verma, 65, of Iselin, previously pleaded guilty to an information charging him with one count of access device fraud, today he was sentenced to one year in prison.
U.S. District Judge Anne E. Thompson imposed both sentences today in Trenton federal court.
According to documents filed in this case and statements made in court: Khan and Verma were originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. They are the last of 22 defendants to be sentenced in this scheme.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a phony credit profile with the major credit bureaus; pump up the credit of the false identity by providing bogus information about that identity’s creditworthiness; then borrow or spend as much as they could without repaying the debts. The scheme caused more than $200 million in confirmed losses to businesses and financial institutions.
The scope of the criminal fraud enterprise required the conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.
Authorities said Khan admitted he helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. He also admitted they knew the cards would be used fraudulently at businesses. Verma admitted he effected transactions with access devices issued to another person.
In addition to the prison terms, Judge Thompson sentenced Qaiser to five years of supervised release and fined him $10,000. Verma was sentenced to three years of supervised release, ordered to forfeit $270,000 and fined $1,000.