Mohammad Shahid Zaman, 42, of Staten Island, N.Y., was picked up this morning in New York by detectives of the New Jersey Division of Criminal Justice (DCJ) and agents of the ICE Homeland Security Investigations, the U.S. Postal Inspection Service and the U.S. Social Security Administration Office of Inspector General, assisted by the New York City Police Department. He consented to return with the DCJ detectives to New Jersey, where he was placed under arrest on charges of first-degree money laundering, second-degree theft by unlawful taking and third-degree fraudulent use of credit cards. He was lodged in the Union County Jail with bail set at $1 million, no 10 percent option.
Zaman and the other 12 defendants were charged in an ongoing joint investigation by the New Jersey Attorney General’s Office, U.S. Postal Inspection Service, ICE Homeland Security Investigations, New Jersey Office of Homeland Security & Preparedness, U.S. Social Security Administration Office of Inspector General and New Jersey Department of the Treasury’s Office of Criminal Investigation. They were assisted by the Hudson County Prosecutor’s Office, Union County Sheriff’s Department, Clark Police Department, Secaucus Police Department and Jersey City Police Department.
The defendants, many of whom live in Secaucus and Jersey City, allegedly created “synthetic” identities by pairing real Social Security numbers with fictitious names and birth dates, using them to open numerous checking and credit card accounts. Zaman allegedly provided one of the defendants arrested in December, Naim Tahir, 47, of Clark, N.J., with stolen Social Security numbers and other personal identifying information used to open accounts. The participants allegedly opened the accounts online so as to avoid face-to-face interaction with the financial institutions. Bad checks were deposited into the bank accounts so that the accounts could be used to make payments on the credit cards, which temporarily inflated the lines of credit on the cards. In addition, funds were withdrawn from the bank accounts via ATM and U.S. Postal Money Order Purchases before the bad checks were discovered. It is alleged that the defendants ultimately “busted out” the credit cards by running up the unpaid balances until they reached or exceeded the credit limits.
The scheme included a group of “merchants” who in many cases allegedly ran shell businesses set up solely for the purpose of participating in this fraud. The merchants allegedly swiped the fraudulent credit cards using point of sale terminals and received reimbursement from credit card processing companies via wire transfer, while never actually providing any merchandise or services. The ring members allegedly split the proceeds. The bank accounts of the shell companies set up by the merchants also allegedly were used to launder the proceeds of the scheme, with checks being written from one company to another as if they were conducting business.
The following 12 defendants were charged by complaint in December with first-degree money laundering, second-degree theft by unlawful taking, and third-degree fraudulent use of credit cards:
All of those defendants, except for Khan, were arrested on Dec. 8 and 9 and were lodged in the Union County Jail with bail for each initially set at $1 million, no 10 percent option. All were granted bail reductions and posted bail, with the exception of Shahbazz and Bhatti. Sheikh posted bail but was taken into custody by ICE on a federal detainer. Khan was arrested on Jan. 14 and was released after posting $450,000 bail. Authorities executed search warrants in December and seized cash and bank accounts totaling approximately $1.9 million.
It is alleged that Tahir was primarily responsible for creating the synthetic identities and applying for the bank accounts and credit cards, using personal identifying information supplied by Zaman. Shahbaz is the owner of USA United Trading, a business in Jersey City that he allegedly opened for the sole purpose of defrauding financial institutions. It is alleged that USA United Trading conducted approximately $1.6 million in fraudulent credit card transactions. USA United Trading held itself out as a carpet retailer, with a store front at 150 Monticello Avenue in Jersey City.
The investigation began when the U.S. Postal Inspection Service (USPIS) received a referral from Wells Fargo Bank about a bad check case the bank was investigating. USPIS enlisted agents of the Social Security Administration and ICE Homeland Security Investigations in Newark, who in turn enlisted the state agencies. Deputy Attorney General Anthony Torntore is prosecuting the case for the Division of Criminal Justice Financial & Computer Crimes Bureau, under the supervision of Bureau Chief Michael Monahan. The lead investigators are Special Agent Bradley E. Greenberg of ICE Homeland Security Investigations; Postal Inspector Brian Macdonald; Lt. Harry Maronpot and Detectives Katelyn Prata and James Gallo of the New Jersey Division of Criminal Justice; Special Agent Kristie Morgan of the Social Security Administration Office of Inspector General; and Special Agent Matthew Henderson of the New Jersey Department of the Treasury’s Office of Criminal Investigation.
The charge of first-degree money laundering carries a sentence of 10 to 20 years in state prison, including a mandatory minimum term of parole ineligibility of one-third to one-half of the sentence imposed. It also carries a fine of up to $500,000 and an additional anti-money laundering profiteering penalty of up to $500,000 or three times the value of any property involved. Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000, while third-degree charges carry a sentence of three to five years in state prison and a fine of up to $15,000.
The charges are merely accusations and the defendants are presumed innocent until proven guilty. Because they are indictable offenses, the charges will be presented to a grand jury for potential indictment.