New York Enforcers: $10K-a-Day Fraud Ring Had International Link

October 9, 2009

A crime ring raked in about $10,000 a day by manufacturing credit cards with numbers purchased illegally from overseas Web sites, committing mortgage fraud and staging car accidents and auto thefts to collect insurance payouts, prosecutors said Wednesday.

Thirteen people were indicted on 263 counts including enterprise corruption, identity theft, real estate fraud, credit card fraud and conspiracy to commit automobile insurance fraud, prosecutors said.

The defendants were being arraigned in county court Wednesday afternoon in three separate indictments after surrendering to authorities earlier in the day. Enterprise corruption alone carries a maximum sentence of 25 years in prison.

The U.S. Secret Service, which investigates financial crimes, collaborated with Brooklyn prosecutors on the 18-month investigation, which also resulted in the seizure of a Bentley, Mercedes-Benz and Land Rover.

Authorities said that the investigation was continuing, and that more arrested were expected.

Between 2006 and 2008, the ring bought credit card numbers from Russian and Ukrainian Web sites, manufactured fake credit cards at sites throughout Brooklyn, and then gave the cards to hired “shoppers” to purchase goods, which were later sold online or used to furnish homes that had been purchased illegally, prosecutors said. Some of the goods included power saws, flat screen TVs and vaccuum cleaners.

Merchandise from stores such as Lowe’s and Home Depot was installed in homes in New York City and Philadelphia, which would be reappraised at higher values and the mortgages refinanced, prosecutors said. Another facet of the scheme involved faking sales of the homes.

In a separate scheme, the group is accused of filing false claims on luxury cars by staging wrecks and accidents, and by replacing undamaged interior parts with damaged ones, and then reporting to police that the cars had been vandalized, prosecutors said. The group would file claims with insurance companies to have the parts replaced.

“There are victims of all their crimes,” said Jerry Schmetterer, of the Kings County district attorney’s office, adding that the number of victims is likely in the thousands.

Though Schmetterer said that some of the group’s schemes were not unusual, he said that its members distinguished themselves through their work ethic.

“They worked hard,” he said. “They worked hard at beating the law.”

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