NEWARK, N.J. – Federal authorities on Tuesday announced charges against 18 people in an alleged international credit card scam that officials say stole at least $200 million, which would make it one of the biggest ever broken up by the U.S. Justice Department.
Officials say the losses are still being calculated and could grow much higher.
Charges were filed in U.S. District Court Newark against 18 people. By Tuesday morning, 13 of them were in custody.
The scam operated in at least 28 states and millions of dollars were wired to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan, according to court papers.
The basic charge is that, starting in 2003, perpetrators used 1,800 different addresses to create thousands of false identities, and used those identities to get 25,000 credit cards.
But there’s a sophisticated wrinkle, authorities said: The scammers sent credit rating agencies fictitious reports to persuade them to give the fake cardholders excellent credit scores. The better the credit scores, the more could be charged — and never repaid.
Further, the court documents say the conspirators set up at least 80 sham companies that did little or no legitimate business. The companies, including jewelry stores in Jersey City, had two functions, authorities said: They accepted credit card payments, which their creators kept, and they provided further fake credit reports to help pump up the fake cardholders’ credit ratings.
Authorities say the suspects created up to 18 false identities apiece, and obtained up to 298 credit cards.
Two brothers, Muhammad Shafiq and Mohammad Naveed, of Bellrose, N.Y., are accused of together getting 464 cards. Prosecutors said Shafiq and Babar Qureshi, of Iselin, N.J., were the ringleaders.
It was unclear if the three were among those in custody.