A Hicksville, New York, man of South Asian origin, was sentenced Nov. 2, to 5 years and 3 months in prison for his role in one of the largest credit card fraud schemes ever charged by the U.S. Justice Department which cost financial institutions approximately $200 million in losses.
Ijaz Butt, 57, who pleaded guilty in December last year before U.S. District Judge in New Jersey Anne E. Thompson to Count One of an indictment charging him with conspiracy to commit bank fraud, was sentenced by the same judge.
In addition to the prison term, Judge Thompson sentenced Butt to three years of supervised release and fined him $3,000, a relatively light sentence considering that Butt faced a maximum potential penalty of 30 years in prison and a $1 million fine.
Butt was among nearly 20 individuals, most of them of Indian or Pakistani origin, originally charged in February 2013 as part of an international conspiracy to fabricate more than 7,000 false identities to obtain some 25,000 credit cards. Since then, 19 people, including Butt, have pleaded guilty in connection with the scheme, according to court documents cited in a press release from the U.S. Attorney for the District of New Jersey Paul Fishman.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a phony credit profile with the major credit bureaus; pump up the credit of the false identity by providing bogus information about that identity’s creditworthiness; then borrowed or spent as much as they could without repaying the debts – causing more than $200 million in confirmed losses to businesses and financial institutions, the press release said.
The elaborate network of false identities was developed across the country. The accused 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.
Butt admitted that he 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. He also admitted they knew the cards would be used fraudulently at businesses.
According to the February 5, 2013 Justice Department press release containing the original charges against 18 people, the conspiracy generated enormous profits for the defendants – even though they spent millions of dollars sustaining the elaborate network. Records of the New York and New Jersey Departments of Labor reveal that many of the defendants had no reported legitimate employment in the five years before they were nabbed in 2013. Nonetheless, the accused bought luxury automobiles, electronics, spa treatments, expensive clothing and millions of dollars in gold. They also stockpiled large sums of cash. Law enforcement discovered approximately $70,000 in cash in the oven of one defendant.
Investigators also found in 2013, that the defendants moved millions of dollars through accounts under their control, and wired millions of dollars to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan.
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