WATERBURY, CT – Janzayb Khan, 29, of Waterbury, has confessed to his role in a brazen credit card “bust-out” scheme that bilked more than a dozen financial institutions out of tens of thousands of dollars. Khan pleaded guilty before U.S. District Judge Jeffrey Alker Meyer in New Haven, admitting to conspiracy to commit bank fraud and perjury in a bankruptcy proceeding. The scheme, executed in early 2013, involved racking up massive debt on fraudulently obtained credit cards and then attempting to erase it all through a false bankruptcy claim.
According to court documents, Khan willingly provided his personal information to a co-conspirator who then flooded financial institutions with applications for credit cards in Khan’s name. A staggering 31 credit cards were approved, despite applications riddled with lies regarding Khan’s income, assets, address, and employment history. Once the cards arrived, the co-conspirator went on a spending spree, rapidly maxing out the credit lines – a practice known as a “bust-out.” The total damage exceeded $59,000, with funds diverted to cash advances, gift cards, and even precious metals.
The fraud didn’t stop there. Another $70,000 was charged through sham transactions at three separate merchants. The merchants then issued checks from these fraudulent charges, which were promptly deposited into accounts controlled by the co-conspirator and their relatives. Khan wasn’t working for free. He received approximately $10,000 in cash for his participation in the elaborate scheme, a paltry sum compared to the financial devastation left in its wake. The total debt accumulated on the 31 cards ballooned to over $165,954.
Attempting to shield himself from the consequences, Khan filed for Chapter 7 bankruptcy in June 2013. But the charade continued. In his bankruptcy filings, Khan falsely claimed the majority of his debt stemmed from gambling losses at casinos, a deliberate attempt to mislead the court. He further compounded his lies during an examination conducted by the U.S. Trustee, committing perjury under oath. The U.S. Bankruptcy Court wasn’t fooled, and ultimately denied the discharge of Khan’s debts, setting the stage for federal prosecution.
Khan was initially arrested on a federal criminal complaint back in April 2017. Now, having waived his right to indictment, he faces a potentially lengthy prison sentence. Judge Meyer has scheduled sentencing for March 5, 2018, where Khan could receive a maximum term of 35 years behind bars. This investigation was conducted by the U.S. Secret Service, highlighting the agency’s continued focus on complex financial crimes. Assistant U.S. Attorney Neeraj N. Patel is prosecuting the case.
This bust-out scheme serves as a stark reminder of the lengths to which criminals will go to exploit the financial system. The U.S. Attorney’s Office for the District of Connecticut is committed to pursuing those who engage in such fraudulent activities and holding them accountable for their actions. The co-conspirator’s identity has not yet been publicly released, and the investigation remains ongoing, potentially leading to further charges and arrests.
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Key Facts
- Agency: U.S. Secret Service
- Category: Fraud & Financial Crimes
- Source: Official Press Release
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