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Jersey City Jewelry Store Owners Sentenced for Roles in $200M Credit Card Fraud Scheme

By kcora on
Jersey City

The two owners of a New Jersey jewelry store who used the business to further one of the largest credit card fraud schemes ever charged by the Justice Department were both sentenced today for their respective roles in the scheme, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Vijay Verma, 49, and Tarsem Lal, 78, both of Iselin, were sentenced to 14 months in prison and 12 months of home confinement, respectively. Both previously pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to informations charging them with one count of access device fraud. Judge

Thompson imposed the sentence today in Trenton federal court.

 

According to documents filed in this case and statements made in court:

 

Verma and Lal were indicted in October 2013 as part of a scheme to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards.

Participants in the scheme 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 – causing more than $200 million in confirmed losses to businesses and financial institutions. These debts were incurred at Verma’s jewelry store, among many other locations, where Verma 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 a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; then run up large charges.

 

The scope of the criminal fraud enterprise required other scheme participants to construct an elaborate network of false identities. Across the country, they 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.

 

Verma and Lal each admitted allowing others who came to their Jersey City store, store to swipe cards they knew did not legitimately belong to them. Verma and Lal would then split the proceeds of the phony transactions with these other conspirators.

 

In addition to the prison terms, Judge Thompson sentenced Verma to three years of supervised release and Lal to three years of probation. Each defendant was fined $5,000 and ordered to pay forfeiture of $451,259.