HUDSON COUNTY – Acting Attorney General John J. Hoffman announced on Dec. 9 that 12 people have been charged with first-degree money laundering and other crimes in a joint federal and state investigation targeting an elaborate fraud scheme in which the defendants allegedly used fictitious identities to obtain credit cards and open bank accounts which they used to steal approximately $3 million from various banks.
Eleven defendants have been arrested and one remains a fugitive.
The Hudson County residents arrested include Hassan Shahbaz, 42, Mohammad Shakeel, 46, and Muhammad Farooq Bhatti, 64 of Jersey City; and Aqeel Ahmed, 60, Shama Munir, 49, Faisal Mushtaq, 37, Shakeela Ahmed, 56, Aqeel Sheikh, 54, and Huda Ahmed, 27, of Secaucus.
Naim Tahir, 47, of Clark, was also arrested, and Mohamed Khan, of Piscataway, is still being sought.
The defendants allegedly created “synthetic” identities by pairing real Social Security numbers with fictitious names and birth dates, and using them to open numerous checking and credit card accounts. They allegedly opened the accounts online so as to avoid face-to-face interaction with the financial institutions.
Bad checks were deposited into the bank accounts so that the accounts 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In addition, funds were withdrawn from the bank accounts via ATM and U.S. Postal Money Order Purchases before the bad checks were discovered.
It is alleged that 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” who in many cases allegedly ran shell businesses set up solely for the purpose of participating in this fraud. The merchants allegedly 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 ring members allegedly split the proceeds. The bank accounts of the shell companies set up by the merchants also allegedly were used to launder the proceeds of the scheme, with checks being written from one company to another as if they were conducting business.
“While the credit card holders, businesses and purchases in this scheme were fictitious, the losses suffered by the banks were very real and totaled an alarming $3 million,” said Hoffman. “We’ll remain extremely vigilant on this front, because financial fraud on this scale hurts commerce and can bankroll other crimes. Our investigation is ongoing, but we’re confident that with these arrests, we’ve dismantled this prolific theft ring in New Jersey.”
The defendants are being held in Union County Jail with bail for each set at $1 million.
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