An Indian businessman, involved in USD 200 million credit card fraud schemes, has pleaded guilty to his role in the conspiracy and now faces a penalty of 15 years in prison.
The banking fraud is one of the largest ever prosecuted by US federal authorities businesses and financial institutions. The guilty, Vijay Verma (46) of New Jersey, is scheduled for sentencing in September.
Vijay Verma, who owns a store, pleaded guilty before US District Judge Anne Thompson in Trenton federal court to an information charging him with one count of access device fraud.
Verma was indicted in October 2013 as part of a scheme to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards.
Participants in the scheme doctored credit reports to pump up the spending and borrowing power associated with the cards.
They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts—causing more than 200 million dollars in confirmed losses to businesses and financial institutions.
These debts were incurred at Verma's jewelry store, where he would allow fraudulently obtained credit cards to be swiped in phony transactions.
Verma became the 18th conspirator to admit his role in the scheme, US Attorney Paul Fishman said. He may have to pay a 250,000 dollar fine.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and credit profile with the major credit bureaus.
They would pump up the credit of the false identity by providing incorrect information about that identity's creditworthiness to those credit bureaus and then run up large charges.
Verma admitted that he allowed others who came to his Jersey City store to swipe cards which he knew did not legitimately belong to them. Verma would then split the proceeds of the phony transactions with these along with other conspirators.