Two Year Federal/State Investigation into Complex Fraudulent and Counterfeit Check Cashing Scheme Costing Banks in Excess of $800,000
Attorney General Peter F. Kilmartin joined United States Attorney Peter F. Neronha and Rhode Island State Police Colonel Steven G. O'Donnell to announce that several individuals were arrested over the past week as a result of "Operation Check-Mate," a nearly two-year investigation into illegal and fraudulent check cashing schemes that allegedly cost banks in excess of $800,000.
Cooperating law enforcement agencies include the Warwick Police Department, the United States Secret Service, the Rhode Island State Police Gaming Enforcement Unit, Providence Police Department, Rhode Island Office of Attorney General Office and United States Attorney's Office.
Arrest warrants were executed last Thursday for several individuals involved in the scheme. Five individuals were arrested and arraigned on Thursday in Providence County District Court. Four individuals were charged in federal criminal complaints, which were unsealed on Monday.
According to court documents, the fraudulent checks were allegedly negotiated in two aspects of a scheme - the "deposit/withdrawal" scheme and the "payroll check" scheme.
The "deposit/withdrawal" aspect of the scheme involved fraudulent checks, which were allegedly produced using non-existent business accounts (typically law firms, insurance companies, etc.). The fraudulent checks were then deposited into a legitimate bank account. After the fraudulent checks were deposited into the legitimate bank accounts, the monies were withdrawn from the bank accounts by the account holders, prior to the fraudulent check clearing or being identified as fraudulent.
The account holders allegedly participated in this because they were paid a part of the monies or given a "cut." Often times, the account holders were unaware that illegal activity was occurring, as they were given a back-story for the activity. After the account holders received their cut, the remainder of the monies was allegedly divided throughout the participants in the scheme.
The "payroll check" aspect of the scheme involved fraudulent or counterfeit checks that were allegedly produced using actual businesses payroll accounts. At some point, payroll and business accounts were compromised and fraudulent checks were produced using the bank routing numbers and account numbers, drawing funds from these accounts. The fraudulent checks were produced to appear almost identical to the actual business checks, including the businesses markings/logos and authorized signature, and were produced with the name of the individual cashed the check.
The people who allegedly cashed the checks were recruited to participate in the scheme and were not employed by the business whose name was on the fraudulent check. The person who cashed the fraudulent check was given a cut with the reminder of the monies divided throughout the participants in the scheme.
The matter remains an open and ongoing investigation.
The following defendants were arrested and arraigned in Providence County District Court last Thursday:
Denzel Colton, DOB: 11/1/90 42 Edgemere Avenue, Providence Bail set at $100,000 with surety • Forgery & Counterfeiting (one count) • Passing a Counterfeit Note (one count) • Obtaining Money Under False Pretenses in Excess ("OMUFP") of $1,500 (11 counts) • Conspiracy (14 counts) • Conspiracy to Commit an Offense Out of State (four counts) • Criminal Solicitation (three counts) • Attempted Larceny (one count
James Davies (DOB: 11/21/79) 428 Prairie Street, Providence Bail set at $100 with surety, held as a probation violator • Forgery & Counterfeiting (11) counts) • Passing a Counterfeit Note (11 counts) • OMUFP in Excess of $1,500 (one count) • Criminal Solicitation (one count) • Conspiracy (23 counts)
Mervin Leslie, DOB: 6/3/86 687 Broad Street, Providence Bail set at $20,000 with surety • ATM Fraud (two counts) • OMUFP in Excess of $1,500 (three counts) • Conspiracy (11 counts) • Criminal Solicitation (one count) • Forgery & Counterfeiting (five counts) • Passing a Counterfeit Note (five counts)
Saheed Stanfield, DOB: 12/30/90 39 Hazel Street, Providence Bail set at $20,000 with surety • OMUFP in Excess of $1,500 (five counts) • Criminal Solicitation (two counts) • Conspiracy (seven counts) • Conspiracy to Commit and Offense Out of State (four counts)
Marvin Medina, DOB: 7/23/89 1029 Atwells Avenue, Providence Bail set at $25,000 with surety • Criminal Solicitation (three counts) • OMUFP in Excess of $1,500 (three counts) • Forgery & Counterfeiting (one count) • ATM Fraud (one count) • Passing a Counterfeit Note (one count) • Conspiracy (six counts)
A state indictment, information, or complaint is merely an allegation. The U.S. Constitution guarantees that a defendant is presumed innocent unless and until proven guilty in a court of law.
In addition, four individuals have been charged by way of a federal criminal complaint in U.S. District Court with one count of conspiracy to commit bank fraud and one count of bank fraud.
• Jerry Zeah, 24, of Providence, made an initial appearance in U.S. District Court on January 22, 2014. He was ordered detained in federal custody.
• John Sumo, 27, of Providence made an initial appearance in federal court on Monday. He was ordered detained and then returned to state custody where he is being held as a bail violator.
• Federal arrest warrants have been issued for two others individuals, Garty Togbasi, 26, and Ernest Kar, 33, both of Providence.
A federal criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.>/i>