Michigan and New Jersey Men Admit Participating in $10 Million Multi-State Bank Fraud Conspiracy

From the U.S. Attorney’s Office, District of New Jersey:

TRENTON, N.J. – A Michigan man today admitted his role in a large-scale conspiracy to commit bank fraud in several states, including New Jersey, New York, Pennsylvania, Maryland, Virginia, and Michigan, over the course of two years, U.S. Attorney Craig Carpenito announced today.

Rana Sharif, 36, of Dearborn Heights, Michigan, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to commit bank fraud.

On Nov. 10, 2020, co-defendant Ali Abbas, 38, of Middlesex County, New Jersey, pleaded guilty by videoconference before Judge Wolfson to a separate information that also charged him with conspiracy to commit bank fraud.

Sharif, Abbas and five co-defendants – Awaise Dar, Shamsher Farooq, Naveed Arif, Habib Majid and Erm Ayaz – were charged by complaint in July 2020 in connection with the scheme.

According to documents filed in this case and statements made in court:

From 2018 through April 2020, Sharif, Abbas, and others conspired to defraud several major banks and electronic merchant processors. They established bank accounts associated with sham entities that had no legitimate purpose, and issued checks payable to other shell companies associated with the criminal organization, knowing that the payor accounts had insufficient funds. The conspirators would also conduct fraudulent credit card and debit card transactions between shell companies to credit payee accounts and overdraw payor accounts. The defendants also used these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization, where no prior legitimate transaction had occurred. 

Members of the criminal organization withdrew the “existing” funds (through ATMs or bank tellers) that banks and merchant processors had credited to the payee bank accounts at the time of the fraudulent transaction. Because the conspirators withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks and merchant processors were left with substantial losses.

During its investigation, law enforcement identified approximately 200 bank accounts and 75 merchant credit card processing accounts used to facilitate the conspiracy’s fraudulent schemes. Sharif, Ali, and other conspirators’ unlawful activities attempted to cause a $10 million loss on financial institutions and did in fact caused a loss of approximately $3.5 million.

The conspiracy charges to which Sharif and Abbas pleaded guilty carry a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross pecuniary gain to the defendants or twice the gross pecuniary loss to others, whichever is greater. Sharif’s sentencing is scheduled for March 15, 2021. Abbas’ sentencing is scheduled for March 18, 2021.

 U.S. Attorney Craig Carpenito credited special agents of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero in Newark; the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark: Social Security Administration, under the direction of John F. Grasso; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the guilty pleas.

The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney’s Office Criminal Division in Trenton.

The charges and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.

TRENTON, N.J. – A Michigan man today admitted his role in a large-scale conspiracy to commit bank fraud in several states, including New Jersey, New York, Pennsylvania, Maryland, Virginia, and Michigan, over the course of two years, U.S. Attorney Craig Carpenito announced today.

Rana Sharif, 36, of Dearborn Heights, Michigan, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to commit bank fraud.

On Nov. 10, 2020, co-defendant Ali Abbas, 38, of Middlesex County, New Jersey, pleaded guilty by videoconference before Judge Wolfson to a separate information that also charged him with conspiracy to commit bank fraud.

Sharif, Abbas and five co-defendants – Awaise Dar, Shamsher Farooq, Naveed Arif, Habib Majid and Erm Ayaz – were charged by complaint in July 2020 in connection with the scheme.

According to documents filed in this case and statements made in court:

From 2018 through April 2020, Sharif, Abbas, and others conspired to defraud several major banks and electronic merchant processors. They established bank accounts associated with sham entities that had no legitimate purpose, and issued checks payable to other shell companies associated with the criminal organization, knowing that the payor accounts had insufficient funds. The conspirators would also conduct fraudulent credit card and debit card transactions between shell companies to credit payee accounts and overdraw payor accounts. The defendants also used these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization, where no prior legitimate transaction had occurred. 

Members of the criminal organization withdrew the “existing” funds (through ATMs or bank tellers) that banks and merchant processors had credited to the payee bank accounts at the time of the fraudulent transaction. Because the conspirators withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks and merchant processors were left with substantial losses.

During its investigation, law enforcement identified approximately 200 bank accounts and 75 merchant credit card processing accounts used to facilitate the conspiracy’s fraudulent schemes. Sharif, Ali, and other conspirators’ unlawful activities attempted to cause a $10 million loss on financial institutions and did in fact caused a loss of approximately $3.5 million.

The conspiracy charges to which Sharif and Abbas pleaded guilty carry a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross pecuniary gain to the defendants or twice the gross pecuniary loss to others, whichever is greater. Sharif’s sentencing is scheduled for March 15, 2021. Abbas’ sentencing is scheduled for March 18, 2021.

 U.S. Attorney Craig Carpenito credited special agents of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero in Newark; the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark: Social Security Administration, under the direction of John F. Grasso; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the guilty pleas.

The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney’s Office Criminal Division in Trenton.

The charges and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.