Indian man pleads guilty in $200 mn credit card fraud scheme

New York, June 20: An Indian businessman, involved in one of the largest credit card fraud schemes ever prosecuted by US federal authorities, has admitted to his role in the conspiracy and now faces a maximum penalty of 30 years in prison and a USD 1 million fine. The banking fraud amounted to USD 200 million in losses to businesses and financial institutions.

The guilty, Vinod Dadlani (51) of New Jersey, is scheduled for sentencing in September. Dadlani, who owns a jewelry store, pleaded guilty before US District Judge Anne Thompson in Trenton federal court to an information charging him with one count of conspiracy to commit bank fraud.

He used his business to further one of the largest credit card fraud schemes ever charged by the Justice Department, and is the 17th conspirator to plead guilty in the case, New Jersey US Attorney Paul Fishman said in a statement. Dadlani was indicted in October 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards.

His associates doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts.

These debts were incurred at Dadlani's jewelry store, among many other locations, where he would allow fraudulently obtained credit cards to be swiped in phony transactions.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and credit profile with the major credit bureaus.

They would pump up the credit of the false identity by providing incorrect information about that identity's creditworthiness to those credit bureaus and then run up large charges.

The scope of the criminal fraud enterprise required Dadlani's conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 "drop addresses," including houses, apartments, and post office boxes, which they used as the mailing addresses for the false identities.

Dadlani admitted he worked with other conspirators, who came to his store and allowed them to swipe cards he knew did not legitimately belong to them. Dadlani would then split the proceeds of the phony transactions with the conspirators.

PTI