Suffolk County District Attorney Timothy D. Sini, Suffolk County Police Commissioner Geraldine Hart, the U.S. Social Security Administration’s Office of Inspector General and the U.S. Secret Service today announced a 108-count indictment charging 13 individuals and three corporations in connection with an alleged nation-wide operation to create and use synthetic identities to commit fraud, which resulted in the theft of more than $1 million from financial institutions. This prosecution represents one of the first of its kind to target a new type of criminal scheme in which perpetrators create synthetic identities and use them to defraud financial institutions out of millions of dollars, harming individual victims in the process.
“This is an extremely complex crime and it can be very difficult to identify the perpetrators, but the team who is investigating and prosecuting this case meticulously followed the evidence and unraveled this scheme, which has far-reaching impacts on everyday citizens,” District Attorney Sini said. “We will seek justice for all of the victims – both the financial institutions that have been defrauded and the individual victims whose identities were stolen by these criminals. I thank all of the agencies who have assisted and are continuing to assist our office with this investigation and prosecution..”
In August 2018, the Suffolk County District Attorney’s Office’s Financial Investigations & Money Laundering Bureau and the Suffolk County Police Department’s Financial Crimes Unit began an investigation into suspected identity fraud at several banks and credit unions on Long Island. The investigation revealed evidence that the defendants allegedly created and used more than 20 synthetic identities in Suffolk County to fraudulently obtain loans and credit card accounts from 19 different financial institutions.
The investigation was also conducted with assistance from Equifax, Experian and TransUnion credit bureaus; the U.S. Postal Inspection Service; and the Riverside District Attorney’s Office and Riverside Sheriff’s Office in California.
The investigation is ongoing. District Attorney Sini and Commissioner Hart urge representatives of any financial institutions or any individuals who believe they are a victim of this scheme to call the Suffolk County Police Department’s Financial Crimes Unit at 631-852-6821.
“Some of the people involved in this scheme had strong financial backgrounds and recruited individuals who were down on their luck, offering them cash, for assistance in this operation,” Suffolk County Police Commissioner Geraldine Hart said. “Together, they stole more than a million dollars but fortunately, our dedicated team unraveled their plot and are holding the perpetrators accountable. Through collaboration with the DA’s office, Social Security Administration, United States Secret Service, the United States Postal Inspection Service, and law enforcement in California, we halted this scam and are hoping to shed light on the existence of synthetic identity fraud to enable people to take necessary precautions.”
“The U.S. Secret Service is dedicated to investigating those who commit financial fraud and whose actions jeopardize the financial security of individuals and businesses alike,” said Patrick Freaney, Deputy Special Agent in Charge of the U.S. Secret Service’s New York Field Office. “The success of this case is due to the diligent work and collaborative effort of the Secret Service, the Suffolk County District Attorney’s Office, the Suffolk County Police Department, and the U.S. Social Security Administration. The Secret Service looks forward to our continued partnership with the aforementioned agencies in combatting the evolving threat posed by those who seek to commit financial crimes.”
“We are committed to protecting the integrity of the Social Security number, as we recognize how critical this personal identifier has become to the American financial system. Today’s indictments are a warning to those who would steal and misuse Social Security numbers to defraud financial institutions for personal gain,” said John Grasso, Special Agent in Charge of the Social Security Administration’s Office of the Inspector General, New York Field Division. “I look forward to seeing justice done in this case, and I want to thank the Suffolk County District Attorney’s Office, the Suffolk County Police Department, and our other law enforcement partners for their efforts in getting us to this point.”
SUMMARY OF ALLEGED SCHEME:
Participants in the scheme would allegedly create synthetic identities by associating a stolen Social Security number with a different name, address and date of birth. The stolen Social Security numbers belonged to individuals with no existing credit history or those who were unlikely to be monitoring their credit history, such as children, recent immigrants, deceased individuals, elderly individuals, and incarcerated individuals.
The defendants allegedly took steps to then make the synthetic identities appear legitimate, including applying for phone accounts, e-mail accounts, rewards card accounts, library cards, and other accounts with minimal verification requirements. One of the perpetrators of this scheme would also allegedly insert the synthetic identities into public databases that are used by financial institutions to verify identity information in order to further legitimize the synthetic identities.
The co-conspirators then allegedly took numerous steps to fraudulently build credit for the synthetic identities, including adding the synthetic identities as authorized users on an existing individual’s credit card.
In furtherance of the scheme, Adam D. Arena, 43, of California, is alleged to have created shell corporations that then falsely reported the synthetic identities to the credit reporting agencies as though they were customers of the corporations, thus providing the synthetic identities with corporate tradelines that further boosted their credit ratings. Arena is alleged to have fraudulently backdated the information to make it appear as though the synthetic identities had good credit histories over the course of several years.
Once the synthetic identities accumulated positive credit reports, participants in the scheme are alleged to have fraudulently obtained loans and credit card accounts from financial institutions using those synthetic identities.
The financial institutions listed in the indictment as being defrauded by perpetrators of the scheme include Sheffield Financial, Bethpage Federal Credit Union, State Farm Bank, USAA Bank, Key Bank, Navy Federal Credit Union, Pentagon Federal Credit Union, Nassau Financial Federal Credit Union, Synchrony Bank, Peoples Alliance Federal Credit Union, Members 1st Federal Credit Union, AmeriCU Credit Union, Webster Bank, Santander Bank, First National Bank of Omaha, Suffolk Federal Credit Union, Roadrunner Financial Inc., Teachers Federal Credit Union and Nassau Educators Federal Credit Union.
The accounts were allegedly used by several of the defendants to the maximum amount allowed and then the balances on the accounts were never paid, a scheme commonly known as a credit “bust out.”
District Attorney Sini and Commissioner Hart urge residents to periodically check their children’s credit reports in addition to their own for any suspected fraudulent activity by visiting www.AnnualCreditReport.com. Any residents who find that their personal identification information is being used without their knowledge or permission should freeze their credit files immediately by contacting the three major credit bureaus (Equifax, Experian and TransUnion) and call the Suffolk County Police Department’s Financial Crimes Unit at 631-852-6821.
DEFENDANTS:
- Adam D. Arena, 43, of Corona, California is charged with seven counts of Grand Larceny in the Second Degree, a C felony; eight counts of Grand Larceny in the Third Degree, a D felony; Criminal Possession of a Forged Instrument in the Second Degree, a D felony; four counts of Money Laundering in the Fourth Degree, an E felony; Scheme to Defraud in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor. Arena is alleged to have opened shell corporations and sold corporate tradelines to improve the credit profile score of the synthetic identities in this scheme.
According to the indictment, the following corporations, which are owned by Arena, are charged as acting in concert with Arena to allegedly commit money laundering:
- GFS Auto Sales LLC is charged with two counts of Money Laundering in the Fourth Degree, an E felony.
- SBC Software LLC is charged with Money Laundering in the Fourth Degree, an E felony.
- ADA Auto Group is charged with Money Laundering in the Fourth Degree, an E felony.
The following defendants are alleged to have furthered the scheme by obtaining loans and/or opening credit card accounts at numerous financial institutions using synthetic identities and by presenting forged identification documents and falsifying account applications:
- Charissa Baerga, 30, of Elmont, is charged with Grand Larceny in the Third Degree, a D felony; Falsifying Business Records in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor.
- David Bouey, 60, of Shirley, is charged with Grand Larceny in the Third Degree, a D felony; Criminal Possession of a Forged Instrument in the Second Degree, a D felony; two counts of Falsifying Business Records in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor.
- Daniel Delmoral, 55, of North Babylon, is charged with six counts of Grand Larceny in the Third Degree, a D felony; 10 counts of Criminal Possession of a Forged Instrument in the Second Degree, a D felony; 10 counts of Falsifying Business Records in the First Degree, an E felony; Scheme to Defraud in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor.
- Bruce Evans, 44, of Bay Shore, is charged with three counts of Grand Larceny in the Third Degree, a D felony; Criminal Possession of a Forged Instrument in the Second Degree, a D felony; three counts of Falsifying Business Records in the First Degree, an E felony; Scheme to Defraud in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor.
- Charnell Morris a/k/a Charnell Solomon, 43, of Mastic Beach, is charged with Grand Larceny in the Second Degree, a C felony; Grand Larceny in the Third Degree, a D felony; Criminal Possession of a Forged Instrument in the Second Degree, a D felony; five counts of Falsifying Business Records in the First Degree, an E felony; Scheme to Defraud in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor.
- Viki Osredkar, 35, of East Northport, is charged with two counts of Grand Larceny in the Third Degree, a D felony; two counts of Falsifying Business Records in the First Degree, an E felony; Scheme to Defraud in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor.
- Elias Pagan, 45, of Central Islip, is charged with two counts of Grand Larceny in the Third Degree, a D felony; Criminal Possession of a Forged Instrument in the Second Degree, a D felony; two counts of Falsifying Business Records in the First Degree, an E felony; Scheme to Defraud in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor.
- Leonidas Rivera, 40, of Levittown, is charged with Grand Larceny in the Third Degree, a D felony; Falsifying Business Records in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor.
- Patricia Schellas a/k/a Patricia Gallagher, 57, of Shirley, is charged with Grand Larceny in the Third Degree, a D felony; Falsifying Business Records in the First Degree, an E felony; and Conspiracy in the Fifth Degree, an A misdemeanor.
- Tremayne Smith, 44, of Mastic, is charged with two counts of Grand Larceny in the Third Degree and one count of Criminal Possession of a Forged Instrument in the Second Degree, D felonies, three counts of Falsifying Business Records in the First Degree and one count of Scheme to Defraud in the First Degree, E felonies, and one count of Conspiracy in the Fifth Degree, an A misdemeanor.
Two remaining co-defendants are currently out of custody and are being actively pursued by law enforcement.
If convicted of the top count, Arena and Morris each face a maximum sentence of five to 15 years in prison. If convicted of the top count, Baerga, Bouey, Delmoral, Evans, Osredkar, Pagan, Rivera, Smith, and Schellas each face a maximum sentence of two and one-third to seven years in prison.
This case is being prosecuted by Assistant District Attorney Jessica Lightstone, of the Financial Investigations & Money Laundering Bureau.
A criminal charge is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
