Gadsden Brothers Bankroll Fraud Scheme, Face Decades in Prison

MONTGOMERY, AL – A brazen check fraud operation run out of a supposed auto garage and tire shop in Montgomery, Alabama, has landed two brothers in federal prison. Derrick Gadsden, 34, and his brother, David Gadsden, 45, both of Montgomery, were sentenced on November 6, 2014, for their roles in a conspiracy to commit wire fraud that spanned nearly a decade.

Derrick Gadsden received a crushing 240 months – 20 years – imprisonment, followed by three years of supervised release. David Gadsden, the elder brother, was sentenced to 120 months imprisonment, also followed by three years of supervised release. U.S. District Court ordered both men to pay $1,000,000.00 in restitution to the victims of their elaborate scheme, a sum that barely scratches the surface of the damage inflicted.

From approximately 2006 to 2013, the Gadsden brothers transformed their legitimate businesses – David’s auto garage and Derrick’s tire shop – into the central hub for a calculated fraud. They didn’t grease gears or balance tires; they orchestrated a network of “runners” recruited from vulnerable individuals desperate for cash. These runners were lured with the promise of easy money, tasked with opening numerous bank accounts with minimal initial deposits across at least seven different financial institutions.

The Gadsdens then flooded these accounts with fraudulently obtained checks, overnighting them directly to their Montgomery storefronts. They catered to a clientele of “buyers” eager to acquire large-ticket items – trailers, building materials, appliances – at deeply discounted prices. The runners, armed with the bogus checks, would make purchases from unsuspecting merchants, leaving the Gadsdens with the goods and a trail of bounced payments. The stolen merchandise was then resold or traded for profit, completing the cycle of deception.

The scope of the operation was staggering, involving approximately two-hundred bank accounts and impacting over one hundred victims. The fraud wasn’t confined to Alabama, stretching across state lines into Florida, Mississippi, Georgia, and Louisiana. The investigation, led by the United States Secret Service, along with local law enforcement from the Montgomery and Opelika Police Departments, and the Alabama Alcoholic Beverage Control Board, exposed a sophisticated and far-reaching criminal enterprise.

Assistant United States Attorney Denise O. Simpson successfully prosecuted the case, securing the substantial sentences and restitution order. The Gadsden brothers now face a long reckoning for exploiting vulnerable individuals and defrauding businesses across the Southeast. The case serves as a stark reminder that even seemingly legitimate businesses can be used as fronts for elaborate criminal activity.

PRESS CONTACT: Clark Morris
Email: usaalm.press@usdoj.gov
Telephone: (334) 551-1755
Fax: (334) 223-7617