Acting Brooklyn District Attorney Eric Gonzalez, together with United States Postal Inspector in Charge Philip R. Bartlett, today announced that seven Brooklyn residents have been indicted on charges of second-degree grand larceny, first-degree scheme to defraud and related charges for their role in an alleged scheme to fraudulently deposit the same United States Postal Service money orders into multiple bank accounts and cashing the physical money orders while failing to disclose the prior deposits.
Acting District Attorney Gonzalez said, “These defendants allegedly engaged in an intricate scheme to steal thousands of dollars from financial institutions and exploited a loophole in mobile electronic bank deposit applications. These loses turn into financial costs are ultimately passed onto bank customers. My Office will continue to work closely with the United States Postal Service to remain vigilant in the face crime which capitalizes on changing technology.”
Inspector in Charge Bartlett said, “Mobile check deposit schemes are one of many fraud schemes gaining popularity in recent years. These schemes present a real challenge for financial institutions and law enforcement. Customer convenience is easily exploited by fraudsters. Postal Inspectors and their law enforcement partners aggressively investigate crimes that steal money from financial institutions and damage the USPS brand.”
The Acting District Attorney identified the defendants as Jermel Belfast, 30, Kadeem Bryan, 23, and Juvaun Clarke, 25, each of Flatbush-Ditmas Park, Brooklyn; Chevelle Gordon, 20, and Brian McIntosh, 23, each of Flatbush, Brooklyn; Steven Leger, 23, of East Flatbush and Dakim Willis, 25, of Flatlands, Brooklyn. The defendants were variously charged with fourth-degree conspiracy, fifth-degree conspiracy, second-degree grand larceny, third-degree grand larceny and first-degree scheme to defraud. Defendants Belfast, Clarke, Leger and Gordon were arraigned Wednesday before Brooklyn Supreme Court Justice Alexander Jeong and defendants Bryan and McIntosh were arraigned yesterday and Willis was arraigned today.
The Acting District Attorney said that, according to the indictment, from approximately June 2014 to March 2016, the defendants purchased United States Postal Service money orders in amounts ranging from $700 up to $1,000 at post offices throughout Brooklyn. In one instance, $12,000 in money orders was purchased. It is also alleged that the defendants recruited a total of 47 bank account holders to relinquish control of their accounts—including their debit cards and Personal Identification Numbers—to the defendants for a promised sum of money. The account holders held accounts at TD Bank, Santander and Bancorp.
The Acting District Attorney said that, according to the indictment, the defendants would deposit the purchased money orders into the bank accounts through an electronic deposit mobile application offered by the financial institutions. Many times, the postal money orders were electronically deposited into more than one compromised bank account. The defendants, it is alleged, would write the respective account holder’s name as the money order payee and erase the information afterwards to facilitate another fraudulent deposit.
Electronic deposit mobile applications allow customers to deposit funds, such as a check or a money order, directly to their bank account using a smart phone or other electronic device. Many financial institutions immediately release a portion of the deposited funds making cash available for withdrawal. The account holder is not required to send their bank the physical deposited item.
The Acting District Attorney said that, according to the indictment, the defendants would withdraw money from the compromised accounts and then subsequently cash the money orders at United States Post Office locations throughout Brooklyn, without disclosing that the money orders had previously been deposited into a bank account. It is alleged that the names of the account holders previously written in pencil were erased and money orders were written out—in ink—to the individual cashing the item.
Based on the face value of the money orders, the defendants allegedly stole approximately $74,951; $36,369; and $7,300 from TD Bank, Santander Bank and Bancorp, respectively.
The case was investigated by United States Postal Inspection Service Inspector Gonzalo Gonzalez, New York City Detective Adrienne Jones, of the District Attorney’s Office Investigation’s Bureau, under the supervision of Sergeant Dominick Longo and Captain Dawit Fikru.
The case is being prosecuted by Senior Assistant District Attorney Vivian Joo, of the District Attorney’s Frauds Bureau, under the supervision of Dana Roth, Deputy Chief, and the overall supervision of Assistant District Attorney Patricia McNeill, Deputy Chief of the Investigations Division.
An indictment is an accusatory instrument and not proof of a defendant’s guilt.