A.G. Schneiderman Announces 10-Year Prison Sentence For Leader Of Identity Theft Ring Who Targeted Hundreds Of New York Consumers
Phillip Smith Led Ring That Charged Over $1 Million Dollars In Fraudulent Purchases
Schneiderman: Businesses And Consumers In New York Are Hurt By Rampant Identity Theft; We Will Seek Out And Punish Perpetrators
NEW YORK - Attorney General Eric T. Schneiderman, United States Attorney for the Southern District of New York Preet Bharara and Special Agent-in-Charge of the New York Office of Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”) James T. Hayes, Jr.,today announced the sentencing of Phillip Smith for orchestrating a scheme that swiped over $1 million from the credit cards of hundreds of New York consumers. Smith, who previously pled guilty to felony charges, was sentenced to 10 years in prison by United States District Judge John F. Keenan in Manhattan federal court.
“This defendant victimized businesses and hundreds of New York consumers in a systematic and elaborate scheme to line his own pockets,” Attorney General Schneiderman said. “My office will aggressively crack down on identity theft – and Phillip Smith will spend a decade behind bars for his crimes.”
Manhattan U.S. Attorney Preet Bhararastated: “Phillip Smith and his co-conspirators engaged in a ‘soup-to-nuts’ identity theft scheme that ripped off retailers for more than $1 million and had the potential to compromise his victims’ credit ratings. We take identity theft crimes very seriously and will continue to prosecute them to the full extent of the law.”
HSI Special Agent-in-Charge James T. Hayes Jr. said, “The defendantserved as the organizer and ringleader of a band of thieves who defrauded hundreds of New Yorkers and dozens of retail businesses. HSI will continue to target those who seek to profit through the use of fraudulent documents and at the expense of law abiding citizens.”
Smith, 55, of the Bronx, pled guilty in November to Conspiracy to Commit Access Device Fraud, Conspiracy to Produce False Identification Documents and Aggravated Identity Theft, all three counts of the indictment filed against him in February 2012.
Smith admitted that, in a scheme that ran from 2008 to 2012, he obtained the personal identification information of thousands of innocent people, including their names and social security numbers. Smith exploited this information to identify victims with existing credit accounts and used them to access their accounts at Home Depot, Sears, Kmart, Kohl’s and other retail chains.
Smith passed the personal identifying information of his victims to co-conspirators Mahmoud Abdul Hussein, Ali Abdul Hussein and Fadal Abdul Hussein, brothers who operated out of two storefronts in Greenwich Village and who produced fake drivers’ licenses with that information. The licenses used the names of the victims but photos of three other co-conspirators, Eugene Smith, Winston Harris and Melissa Morton, who impersonated the victims to steal goods and services.
Ring members travelled to stores in at least twelve states, including New York, New Jersey and Pennsylvania, where they charged expensive merchandise and gift cards to victims’ accounts. These fraudulently obtained goods were then sold to other members of the ring, including Francis Hidalgo and Randy White, for approximately 60 percent of their face value.
In addition to his participation in this identity theft ring, Francis Hidalgo converted two warehouses in the Bronx into hydroponic marijuana growing facilities as part of yet another criminal enterprise.In June 2012, investigators seized over 400 marijuana plants from one of these warehouses. This investigation has resulted in narcotics charges being filed against three additional individuals.
Besides 10 years in prison, Smith was ordered to pay $1,153,000 in restitution to victims and forfeiture to the government in the amount of $404,000.
Francis Hidalgo, Winston Harris and Randy White, were previously sentenced by Judge Keenan. Hidalgo, 45, of Pomona, NY, was sentenced to 6 and ½ years in prison for Conspiracy to Commit Access Device Fraud, Theft of Public Funds in connection with the submission of 99 weeks of false claims to the New Jersey Unemployment Insurance Fund and Conspiracy to Distribute or Possess with Intent to Distribute Marijuana Plants. He was ordered to pay restitution in the amount of $557,816 and forfeiture in the amount of $111,000.
Harris, 58, of Brooklyn, was sentenced to four years in prison for Conspiracy to Commit Access Device Fraud, Conspiracy to Produce False Identification Documents and Aggravated Identity Theft. He was ordered to pay restitution in the amount of $70,000 and forfeiture in the amount of $24,000.
White, 57, of the Bronx, was sentenced to time served for Conspiracy to Commit Access Device Fraud. He was ordered to pay restitution in the amount of $46,000 and forfeiture in the amount of $30,000.
Defendants who are awaiting sentencing are:
Eugene Smith, 59, of the Bronx, pled guilty to Conspiracy to Commit Access Device Fraud, Conspiracy to Produce False Identification Documents and Aggravated Identity Theft.
Mahmoud Abdul Hussein, 28, Ali Abdul Hussein, 34, and Fadal Abdul Hussein, 23, all of Seaford, NY, who each pled guilty to Conspiracy to Produce False Identification Documents.
Charges remain pending against Melissa Morton, 25, of the Bronx. Morton is presumed innocent unless and until proven guilty.
Attorney General Schneiderman thanked the U.S. Attorney’s Office for the Southern District of New York, the New York State Department of Financial Services, ICE HSI and the New Jersey Department of Human Services Police for their assistance in the investigation of this matter.
Attorney General Schneiderman also thanked the NYPD, the New Jersey Department of Labor and Workforce Development, MAGLOCLEN (a multi-state law enforcement support organization), Home Depot, Citibank and Kohl’s for their valuable cooperation and support in this investigation.
The case is being handled by Assistant United States Attorney Joseph P. Facciponti, Assistant Attorney General Meryl Lutsky, who has been designated a Special Assistant U.S. Attorney, and Assistant Attorney General Tyler Reynolds. AAGs Lutsky and Reynolds work under the supervision of Bureau Chief Gail Heatherly of the Criminal Prosecutions Bureau and Executive Deputy Attorney General for Criminal Justice Kelly Donovan.
The Attorney General recognizes the diligent work of the OAG’s Criminal Division staff, including Legal Support Analyst Christina Lee and former Legal Support Analyst Minji Reem; Investigators Vincent Gisonti, Steve Pratt, and David Negron; Senior Investigator Dennis Maddalone; Supervising Investigator John Sullivan; and Deputy Chief Investigators John McManus and Greg Stasiuk.