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HSI Baltimore-led operation dismantles Maryland financial fraud scheme network

HSI Baltimore-led operation dismantles Maryland financial fraud scheme network

BALTIMORE — An investigation spearheaded by Homeland Security Investigations (HSI) Baltimore’s Mid-Atlantic El Dorado Task Force in conjunction with the Environmental Protection Agency’s Office of Inspector General and IRS Criminal Investigation resulted in a statewide operation to break up an alleged Maryland-based financial fraud network. During the operation, which took place throughout Maryland on Feb. 7, the task force executed three federal search warrants and arrested 10 people.

“Criminal organizations are growing more sophisticated when it comes to executing financial fraud schemes,” said HSI Baltimore Special Agent in Charge James C. Harris. “Our investigation revealed that this criminal organization was using confusingly similar email addresses and company names to steal money from individual people as well as private and public sector organizations. HSI Baltimore will continue to work with our law enforcement partners on the Mid-Atlantic El Dorado Task Force and across law enforcement to disrupt these networks and cripple their ability to operate in Maryland.”

The Mid-Atlantic El Dorado Task Force comprises special agents from HSI Baltimore, the Environmental Protection Agency, the U.S. Postal Inspection Service, the Maryland Department of Public Safety and Correctional Services, the Anne Arundel County Police Department, the Prince George’s Police Department, and the Montgomery County Police Department.

During the investigation, HSI Baltimore and its partners identified a sophisticated criminal network of individuals allegedly engaged in various forms of financial fraud. The network used more than 50 bank accounts to launder and disperse proceeds obtained through various fraud schemes, including romance scams, lottery scams and business email compromise.

“Rooting out sophisticated program fraud that threatens the integrity of the EPA is one of our investigative priorities,” said EPA Office of Inspector General Special Agent in Charge Nic Evans. “We worked with law enforcement partners to put a stop to multiple email schemes intended to steal millions of dollars from a court ordered trust fund under EPA’s oversight.”

The statewide operation was part of a multijurisdictional, multiagency, HSI-led investigation that to date has identified 17 alleged co-conspirators, seized assets worth more than $1 million – including luxury vehicles that were attempted to be exported from the Port of Baltimore, and prevented criminals from stealing millions of dollars from victims.

The alleged movement of fraudulent proceeds in this case was pervasive and expansive, with much of the fraudulently obtained proceeds moving through the U.S. banking system to foreign countries such as Nigeria and China. To date, this investigation uncovered tens of millions in fraudulent proceeds allegedly being laundered through the criminal organization and 29 victims, including individual citizens, government agencies, hospitals and other critical infrastructure entities.

The conspirators allegedly created and used limited liability companies and other shell businesses to open bank accounts for which the shell entities were listed as account holders. Members of the conspiracy had signature authority for the bank accounts, at times using aliases or stolen identities. The alleged conspirators used the bank accounts to receive money obtained from the fraud victims. Victims included an environmental trust, an urban redevelopment program, a medical center, a transportation and logistics company, a school district, a college, and a county government, among others. Some of the alleged co-conspirators obtained and used forged and counterfeit identification documents, including documents bearing the names of identity theft victims.

The investigation illustrated how the victims were deceived into sending money to the alleged conspirators’ bank accounts based on false pretenses, such as being provided with false bank account information for legitimate vendor payments and false wire transfer information for legitimate transactions. After the fraudulently obtained funds reached the bank accounts, the conspirators allegedly engaged in financial transactions to conceal and disguise the nature and source of the money through cash withdrawals, purchases of cashier’s checks and debit card transactions, and by transferring funds to other bank accounts controlled by the conspirators.

According to the investigation, the alleged offenders obtained and used a portion of the fraud proceeds for themselves. The conspirators allegedly used some of the fraud proceeds to purchase vehicles, some of which they shipped or attempted to ship outside the United States. They also allegedly engaged in international financial transactions and caused fraud proceeds to be sent outside the United States.

If convicted, the defendants each face a maximum sentence of 20 years in federal prison for the conspiracy and for each count of money laundering.

HSI Baltimore would like to thank the Environmental Protection Agency’s Office of Inspector General; IRS Criminal Investigation; the Maryland Department of Public Safety and Correctional Services; the Department of Defense’s Defense Criminal Investigative Service Cyber field office; the Anne Arundel County Police Department; the Prince George’s Police Department; and the Montgomery County Police Department their partnership and collaboration.

The case is being prosecuted by the U.S. Attorney’s Office for the District of Maryland.

HSI encourages members of the public to report instances of fraud, crimes or suspicious activity by calling the HSI Tip Line at 877-4-HSI-TIP. The tip line is staffed 24 hours a day.

HSI is the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel and finance move. HSI’s workforce of more than 8,700 employees and consists of more than 6,000 special agents assigned to 237 cities throughout the United States, and 93 overseas locations in 56 countries. HSI’s international presence represents DHS’ largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.

Learn more about HSI’s mission to increase public safety in your community on X, formerly known as Twitter, @HSIBaltimore.

Originally published at https://www.ice.gov/news/releases/hsi-baltimore-led-operation-dismantles-maryland-financial-fraud-scheme-network

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