UNION COUNTY, NJ — A fourth leader was sentenced to state prison on Dec. 6 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, according to a press release from Attorney Gen. Gurbir Grewal. A total of 14 defendants were charged in the joint state and federal investigation.
Aqeel Sheikh, 58, of Newark, was sentenced 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, 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 Rodriguez as a result of the investigation. Shaikh Dawood, 61, of Cranford, pleaded guilty to second-degree theft by deception and was sentenced to eight years in prison on March 8. 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. A fifth defendant, Hassan Shahbaz, 46, of Jersey City, 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.
“This type of credit card fraud involving stolen and false identities imposes huge costs on the financial services industry and ultimately on consumers,” Grewal said. “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 Veronica Allende, director 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.”
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 charges against Bhatti are accusations and he is considered innocent unless or until found guilty in a court of law.
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 storefront 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 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.
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