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Woman Gets 40 Months in Prison for Role in $2M Credit Card Fraud Conspiracy

By kcora on

A Philadelphia woman who participated in one of the largest credit card fraud schemes ever charged by the Justice Department was sentenced today to 40 months in prison, U.S. Attorney Paul J. Fishman announced.

Vernina Adams, 34, previously pleaded guilty before Judge Anne E. Thompson to an information charging her with one count of conspiracy to commit bank fraud. Judge Thompson imposed the sentence today in Trenton federal court.

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

Adams was originally charged in February 2013 as part of a conspiracy, led by Tahir Lodhi, Babar Qureshi, Ijaz Butt, and others, to fabricate more than 7,000 false identities and obtain tens of thousands of credit cards. Since then, 19 people, including Adams, have pleaded guilty in connection with the scheme.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a phony credit profile with the major credit bureaus; pump up the credit of the false identity by providing bogus information about that identity’s creditworthiness; then borrowed or spent as much as they could without repaying the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.

The scope of the criminal enterprise required Adams and others 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 of the false identities.

Adams and her conspirators also used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud. 

Tradelines come in two varieties: primary tradelines and authorized user tradelines. Primary tradelines are lines of credit in a credit history. If a credit card user has primary tradelines in good standing, it can have a significant impact on the user’s credit score, enabling the user to borrow more from credit card issuers. A second kind of tradeline is the “authorized user” tradeline, where a credit card holder adds another individual to a credit card account. This raises the credit score of the authorized user, who inherits some of the primary user’s credit history.

During her plea proceeding, Adams admitted advertising on Craigslist for individuals willing to add someone onto their credit cards. She also admitted selling other members of the conspiracy fraudulent tradelines, including by working with Acapulco Jewelry, a complicit business in California. Adams would extend a fictitious line of credit to a false identity, backdate the line of credit so it appeared to have existed for a longer period of time, then falsely report the line of credit had been paid. 

In addition to the prison term, Judge Thompson sentenced Adams to five years of supervised release.