LOS ANGELES
A federal grand jury indicted six defendants for engaging in a years-long scheme to steal millions of dollars from American consumers’ bank accounts, the Justice Department announced Friday.
According to court documents, Henry LoConti, 63, of Chardon, Ohio; John Flynn, 43, of Canada; Shoaib Ahmad, 64, of Canada; Timothy Munoz, 57, of Wilmington, California; Eric Crespin, 61, of Canada; and Lezli St. Hill, 53, of Canada, unlawfully debited money from the bank accounts of unknowing U.S. consumer-victims.
“The scheme alleged in the indictment involved an elaborate plot to steal consumers’ hard-earned savings directly from their bank accounts,” said Deputy Assistant Attorney Gen. Brian M. Boynton, head of the Justice Department’s Civil Division.
Through its members and associates, the enterprise obtained victims’ identifying and banking information and created shell entities claiming to offer services like cloud storage.
The enterprise then made unauthorized debits from the victims’ bank accounts, falsely representing to banks that these transactions were authorized. Some of these debits were returned, resulting in high return rates.
To hide and continue the unauthorized debits, the shell entities also made “micro debits” to other accounts controlled by the enterprise. These microdebits artificially lowered the return rates of the shell entities, aiming to reduce bank scrutiny and minimize any negative impact on the enterprise’s banking relationships.
So far, 19 conspirators are currently charged in the Central District of California for their participation in the scheme. Three other defendants have been convicted and/or sentenced in federal courts in Nevada, California, and Maryland.
“The U.S. Postal Inspection Service (USPIS), along with our partners, remain committed to shutting down these types of scammers,” said Inspector in Charge Eric Shen of USPIS’ Criminal Investigations Group. “Dismantling this syndicate, and the arrests and prosecutions of those involved should send a clear message that fraudulent schemes that exploit innocent victims, many of whom have suffered not only financial losses but also emotional distress and a breach of trust, will not be tolerated.”
All six defendants are charged with racketeering conspiracy and wire fraud. Some defendants made their initial court appearances on Thursday.
If convicted, each defendant faces a maximum penalty of 20 years in prison for racketeering conspiracy and 30 years in prison for each count of wire fraud.
Ahmad was separately charged in a second indictment with conspiracy to commit bank and wire fraud related to his participation in a similarly structured conspiracy that also stole money from U.S. consumer victims.
All defendants are presumed innocent unless proven guilty.
USPIS is investigating the case.
Assistant U.S. Attorney Monica Tait of the Major Frauds Section and Justice Department Trial Attorneys Wei Xiang, Meredith Healy and Amy Kaplan of the Civil Division’s Consumer Protection Branch are prosecuting the case.
For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch.