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Crime ring broken in massive fraud bust

October 7, 2009 3:48:07 PM PDT
Authorities say they've taken down a New York-based criminal ring that specialized in credit card, real estate and auto insurance scams. The tentacles allegedly reached all the way to Russia and the Ukraine. The Secret Service also investigated the case, which resulted in 13 indictments and the seizure of luxury cars, including a Bentley, Mercedes and Land Rover.

Among other things, prosecutors say the criminals bought credit card numbers from Web sites based in other countries. Then they made fake cards used for purchases at U.S. stores.

"Criminals like the bunch charged here today poison our economy," Brooklyn District Attorney Charles Hynes said. "The victims are not faceless corporations, but honest, hard-working people, who see their insurance premiums and credit card fees rise because of fraud like this."

The defendants are charged in three separate indictments.

The first indictment charges Ryan Foster, Nathaniel Mahone, Jacques Sylvestre and Yanira Santiago with operating a credit-card fraud and identity theft ring, which at times netted as much as $10,000 per day, between 2006 and 2008.

They are charged with purchasing credit card numbers from private Internet sites in Russia and the Ukraine and using the information to manufacture fake credit cards in various Brooklyn sites. The defendants then sent hired shoppers to stores, such as Game Stop, Best Buy, Home Depot, Lowe's, Zales, Louis Vuitton and Ford's Jewelers, where they would purchase items the ringleaders would later sell, according to the indictment.

The indictment also charges the defendants with purchasing properties through mortgage fraud and using the merchandise stolen from home improvement stores to increase the values of the homes. The properties could then be re-appraised at higher values, and the defendants could get the mortgages refinanced. Another aspect of the scheme involved orchestrating fraudulent purchases and sales of the properties, by employing straw buyers and using crooked real estate brokers and loan officers to help them file false paperwork.

In a second indictment, Foster, Mahone, Sylvestre and nine others are charged with conspiring to make false accident, vandalism and theft claims on late-model luxury cars, such as BMW, Land Rover, Lexus, Mercedes Benz and Cadillac. The indictment charges that the defendants would remove undamaged interior parts, such as air bags, dash boards, door panels and seats, and replace them with damaged parts. Then, they would report to police that the cars had been vandalized near their homes and file claims with their insurance companies to have the damaged car parts replaced. The investigation revealed that the same damaged car parts were recycled and used repeatedly in separate claims. The defendants are also charged with staging accidents and car thefts to collect insurance payments.

In the third indictment, Sylvestre is charged with criminal possession of a weapon relating to a handgun found in his home during the execution of a search warrant in October 2008.

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