January 13, 2012
At this stage in the proceedings, it's all merely allegations. Prosecutors have filed a criminal Complaint and the named defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. That's how it goes. So - keeping in mind that it's simply the prosecutors' say-so against the protestations of the defendants, who knows how this will all flush out in the end.
Given the above admonition, on January 12, 2012, Preet Bharara, the United States Attorney for the Southern District of New York; Eric T. Schneiderman, the New York State Attorney General; and James T. Hayes, Jr., the Special Agent-in-Charge of the New York Office of Immigration and Customs Enforcement's Homeland Security Investigations, announced charges against seven members of an identity theft ring. The Complaint alleges that no later than 2008, the defendants allegedly used the stolen identities of over 180 people with active store credit accounts at Home Depot, Sears, Kmart, Kohl's, and other retail stores. As to putting a name on the folks allegedly involved in this ring, on January 12, 2012, the following seven defendants were arrested:
- PHILLIP SMITH, 54, Bronx, NY, the ring's leader;
- MELISSA MORTON, 24, Bronx, NY, who allegedly impersonated female identity theft victims;
- MAHMOUD ABDUL HUSSEIN, 27, ALI ABDUL HUSSEIN,33, and FADAL ABDUL HUSSEIN , 22, all residents of Seaford, NY - three brothers who allegedly manufactured fake driver's licenses out of their storefront smoke shops in Greenwich Village; and
- FRANCIS HIDALGO, 44, Pomona, NY, and RANDY WHITE, 56, Bronx, NY, who are alleged to have resold the illegally obtained store credits or used them to buy materials for home improvement projects for their businesses.
According to the narrative in the Complaint, since the ring's inception, Smith allegedly obtained stolen identities including the names and social security numbers of legitimate account holders at large retail chains, including Home Depot, Sears, Kmart, and Kohl's. Smith then purportedly called the customer service numbers at the retail stores to confirm that the victims had credit accounts and to determine the available credit limit. That makes sense - if you're going to go to all the trouble of stealing someone's identity, you might as well make sure that they have some usable (or should I say "steal-able") credit still available. Not much point in trying to rip off the account of a dead-beat, right?
So, after confirming the financial good-to-go status of the marks, Smith allegedly got a hold of fake driver's licenses in the names of the account holders but with photos of the individuals who would then impersonate them at the retail outlets. That's a nice touch. Shows that they took the care to focus on the details. Nothing like customizing the bogus driver's license with the right photo of the person going to run the alleged con. And who do we allegedly have to thank for this pride of workmanship? According to the Complaint, the Hussein brothers, who operated out of two storefronts in Manhattan's Greenwich Village.
Armed with the stolen info and the hot licenses, Smith allegedly drove Morton to retail stores throughout New York, Connecticut, New Jersey, and Pennsylvania. Upon arrival at the stores, Morton allegedly charged expensive merchandise and gift cards to victims' accounts; but even this phase of the scam was carried off with a bit of elan. We have Morton, supposedly fumbling at the checkout line, telling the store clerks that, something along the lines of, gee, it should be in my bag but, damn, it's not, you know what, I must have forgotten my store credit card. Tell you what, honey, lemme give ya my driver's license instead, and, how about I also give you my social security number. I don't want ya to get in trouble or nuthin'. Here's my proof of my identity.
Of course, if the Complaint is correct, Morton had deceived the clerk into believing that she was the customer whose identity had been stolen and for whom a fake driver's license was fabricated. Armed with all the merchandise obtained through this purported identity theft, Smith then allegedly drive Morton to other outlets of the previously targeted retailers. Morton then entered these new locations and returnrf the same merchandise that she had previously purchased at the chain's other store. Now the defendant's allegedly realized the first goal of their ring: They got a store credit or gift card.
Once the credits or cards were obtained, according to the Complaint, defendants Hidalgo and White (among other members of the ring) bought the credits/cards for about 60% of their face value, and, thereafter, resold them for about 70% of the face value.
Prosecutors alleged that during their investigation, they used court-authorized wiretaps to intercept telephone calls among the defendants. Allegedly, Smith and Morton are heard on some of the tapes speaking in a code - referencing the faked driver's licenses and the targeted victims. In one call, it is alleged that Smith warned White that some Sears store credits had a limited shelf life - they needed to be used "right away" before "they go bad." In some other tapes, prosecutors alleged that Smith arranged to sell to Hidalgo Home Depotstore credits for 60% of face value. The ever resourceful Hidalgo allegedly managed to set up a quick flip by locating contractors with ready cash. Finally, some tapes allegedly contain conversations of the the Hussein brothers discussing their manufacture of fake driver's licenses.
The Complaint charges:
- Smith, Morton, Hidalgo, and White: conspiracy to commit access device fraud, which carries a maximum term of five years in prison.
- Smith, Morton, and the Hussein's: a separate conspiracy to produce fake driver's licenses, which carries a maximum term of 15 years in prison.
- Smith and Morton: additionally charged with aggravated identity theft, which carries a mandatory two-year sentence if convicted.