(update) Fl. man and driver convicted in $30 million ID theft and bank fraud ring

A jury has convicted a Miami Beach, Fla., man and his driver for their roles in a telemarketing fraud and identity theft scheme that attempted to defraud financial institutions and their account holders throughout the United States of millions of dollars through the unauthorized debit of customer bank accounts, U.S. Attorney Paul J. Fishman announced yesterday.

Robert Sacks, 51, and his driver, Diego Hernandez, 32, a Venezuelan citizen residing in Miami, were convicted of all counts in which they are named in the 42-count Superseding Indictment. Sacks was convicted of one count of conspiracy to commit mail and wire fraud; one count of conspiracy to commit bank fraud; 18 counts of substantive wire fraud; four counts of mail fraud; and 18 counts of aggravated identity theft. Hernandez was convicted of three counts each of aggravated identify theft and wire fraud, in addition to the conspiracy counts.

Sacks and Hernandez are the final two remaining defendants out of 17 charged in connection with an international bank fraud ring busted for attempting to debit well over 100,000 customer accounts for more than $30 million. The other 15 co-conspirators from Canada, New Jersey, Florida, Colorado and Michigan already have pled guilty for their participation in the conspiracy.

The Superseding Indictment, which was returned by a federal grand jury on Oct. 8, 2009, describes a scheme in which the two defendants and other co-conspirators pretended to operate a telemarketing business, but instead simply withdrew or attempted to withdraw funds from over 100,000 bank accounts throughout the United States without the authorization or knowledge of account holders. Thousands of these victims, many of whom are elderly and infirm, reside in New Jersey.

In convicting Sacks and Hernandez, the jury found that they participated in an elaborate trans-border fraud scheme in which their co-conspirators obtained lists of individuals’ names and bank account information. Then, under the pretense that these individuals had purchased items through a telemarketing business, drew money out of the victims’ bank accounts, or attempted to do so.

During the trial, the jury heard testimony and viewed evidence about how co-conspirators Siamak Saleki, 43, and Jan Ludvik, 26, a.k.a. “Thomas Palmer,” both of Montreal, were responsible for collecting and providing the names and personal banking account information of unsuspecting consumers to their co-conspirators in the United States. Sacks and Hernandez, and other co-conspirators, then charged the accounts of these unwitting victims using false and fraudulent demand drafts (checks not actually written by the customers, but
instead generated by the co-conspirators), or Account Clearinghouse (“ACH”) debits (electronic withdrawals). The majority of these fraudulent transactions subsequently were reversed through the banking system because they were drawn upon accounts that were nonexistent, closed, contained insufficient funds, or because customers alerted their bank in time to reverse the transaction. A smaller yet still significant percentage of the debits and withdrawals were not returned to the bank because the victim did not alert the bank in time to reverse the transaction.

Sacks and Hernandez, along with seven of the co-defendants, were arrested on Dec. 10, 2008, by Inspectors with the U.S. Postal Inspection Service and Special Agents with the U.S. Secret Service.

The jury deliberated for approximately 6 hours before returning a verdict. U.S. District Chief Judge Garrett E. Brown, Jr., who presided over the 5-week trial, scheduled both defendants’ sentencing for June 8.

Source: U.S. Attorney’s Office

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