A sophisticated ring of fraudsters rang up more than $1 million in crooked charges at major retailers including Home Depot, Sears and Kmart, authorities charged today.
The long-running scam allegedly involved using the stolen identities of more than 180 New Yorkers with charge accounts at the stores to purchase pricey goods and gift cards.
The merchandise was then returned for store credit, some of which was sold — along with the gift cards — for about 60 percent of face value.
A complaint filed in Manhattan federal court identifies Phillip Smith, 54, of The Bronx, as the ringleader and mastermind of the scheme.
After obtaining the stolen identities, Smith allegedly verified the victims’ accounts and credit limits by contacting customer service reps at the stores.
He then got phony drivers licenses in the victims’ names from three brothers — Mahmoud Abdul, Ali Abdul and Fadal Abdul Hussein — who manufactured the fake IDs inside a pair of smoke shops they operate in Greenwich Village, according to the feds.
Alleged accomplice Melissa Morton, 24, is accused of using one of the bogus licenses to make purchases at stores throughout New York, New Jersey, Connecticut and Pennsylvania, with Smith serving as her driver.
After claiming she had forgotten her store credit card, Morton allegedly got cashiers to ring up her purchases after she gave them the fake license and the victim’s Social Security number.
Smith then drove Morton to other branches of the stores, where she returned the goods for credit, court papers charge.
Some of the credits were allegedly bought by Francis Hidalgo and Randy White, who are accused of using them to finance a home-improvement businesss.
Hidaldo and White also allegedly re-sold some of the credits at a mark-up.
The case is the result of a probe by state authorities in New York and New Jersey, as well as the U.S. Department of Immigration and Customs Enforcement and the NYPD.
“Identity theft results in hundreds of millions of dollars in losses to unsuspecting victims and businesses, and victims may have to spend countless hours just to get their lives back in order,” Manhattan U.S. Attorney Preet Bharara said.
“As today’s arrests demonstrate, we hold no quarter for the alleged perpetrators of these crimes and will work with our state and federal law enforcement partners to bring them to justice.”
All seven defendants are expected to appear in Manhattan federal court later today.