A New York man has admitted his role in one of the largest credit card fraud schemes ever charged by the Justice Department. Muhammad Shafiq, 39, of Bellrose, N.Y., pleaded guilty to an information charging him with one count of conspiracy to commit bank fraud.
Shafiq is the fourth conspirator to plead guilty in a two-week period. Vernina Adams, 31, of Philadelphia, and Raghbir Singh, 57, of Hicksville, N.Y., pleaded guilty on July 31, 2013, to separate informations charging the same offense. Mohammad Khan, 49, of Staten Island, N.Y., pleaded guilty on July 24, 2013, to an information charging conspiracy to defraud the United States.
According to documents filed in this case and statements made in court, Shafiq, Adams, Singh, and Khan 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. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; then run up large loans.
The scope of the criminal fraud enterprise required Shafiq, Adams, Singh, Khan, and their 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 of the false identities.
During their guilty plea proceedings, Shafiq, Singh, and Khan admitted they 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. They also admitted they knew the cards would be used fraudulently at businesses, with Khan admitting to personally using the cards.
Adams and her conspirators also used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud. Adams admitted advertising on Craigslist for individuals willing to add someone onto their credit cards. She also admitted selling other members of the conspiracy fraudulent “tradelines,” including by working with Acapulco Jewelry, a complicit business in California.
Each defendant is scheduled for sentencing by U.S. District Judge Anne E. Thompson in Trenton, N.J.: Shafiq on Nov. 14, 2013; Adams and Singh on Nov. 7, 2013; and Khan on Oct. 30, 2013. The count to which Shafiq, Adams, and Singh pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gain or loss caused by the offense. The count to which Khan pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense.
Related Federal Cases
- Hamilton Eromosele, Credit Card Fraud, New Jersey 2020 · Colorado
- Yang-Shi Lin, Credit Card Fraud, Connecticut 2018 · Florida
- Habib Chaudhry, Conspiracy to Commit Bank Fraud, New Jersey 2017 · Florida
- Jose Salazar, Bank Fraud Conspiracy, New Jersey 2021 · North Carolina
- James Franklin Hill, Wire Fraud, New Jersey 2017 · Florida
Key Facts
- State: New Jersey
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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