White Collar Crime News

Reputed Bloods members go hi-tech in alleged white collar fraud scheme July 7, 2009

This is a rather amazing story.  Anyone following NJ crime news over the past few years already knows that gang crime is exploding.  Most of these crimes involve drugs and violence.  However, a set of indictments revealed today allege that various alleged members of the Bloods street gang have enganged in a two year fraud scheme involving banks across New Jersey.

From a news perspective, it is interesting to see the development of gangs much like the mafia switched from breaking legs to trading stocks and other financial schemes.  However, from a defense perspective, it is interesting to see how these cases will be handled by the court and the State.

Normally, white collar defendants have it easy compared with your average criminal defendant.  It is often fairly easy to drum up several mitigating factors to avoid a harsh sentence or to get a jury to think that the case belongs in civil case instead of criminal court.

However, in these cases, the State will likely argue that the scheme was used not for personal financial gain, but for the profit of the enterprise which primarily engages in violent offenses.  Thus, this is more akin to a mafia prosecution than anything else.

Two issues jump out to me right away.  The first is that most of the “smaller fish” will flip on the “bigger fish”.  It is one thing to deal with one or two people that made a deal, but a half-dozen or more could be difficult, especially where there is other evidence of guilt.  The client should know who may or may not flip right away especially if they are all locked up together.  

Second, 404(b) or other  crimes evidence will be a big issue here.  Normally, the State cannot allege that each defendant is in a gang but with the racketeering charge, the jury will hear that all of the defendants are engaged in a criminal enterprise.  Thus, the issue will be how much they hear.  That’ll be a big battle in and of itself.

This could be a fun case for a defense attorney if the case breaks the right way. 

Press release:

TRENTON – Attorney General Anne Milgram announced that 31 defendants have been indicted in connection with bank fraud schemes orchestrated by members and associates of the Bloods street gang involving more than $654,000 in counterfeit checks, which resulted in the theft of more than $341,000 from eight banks.

The charges stem from “Operation Bloodbank,” an investigation by the New Jersey State Police, the Division of Criminal Justice and the Monmouth County Prosecutor’s Office. Milgram made the announcement with Division of Criminal Justice Director Deborah L. Gramiccioni, State Police Deputy Superintendent of Investigations Lt. Col. Christopher Andreychak and Monmouth County Prosecutor Luis A. Valentin.

The investigation stemmed from a prior investigation by the State Police and Division of Criminal Justice that led to the indictment in June 2007 of 46 members of the Nine Trey Gangsters set of the Bloods street gang, including its top leaders, on various charges including first-degree racketeering, murder, leading a narcotics trafficking network and money laundering.

In the latest investigation, the eight leaders of the criminal enterprise – six charged in today’s indictment and two who pleaded guilty last year – are alleged to be members or associates of the Nine Trey Gangsters set of the Bloods. They recruited people who were not associated with the gang to participate in the bank frauds.

“The Bloods are a plague on our communities, trafficking in drugs and guns and inflicting horrific violence,” said Attorney General Milgram. “This investigation reveals the Bloods on new turf, defrauding banks of hundreds of thousands of dollars using counterfeit checks. Just as we have targeted the financial crimes of traditional organized crime through the years, we will crush any inroads by street gangs into these activities, which could bankroll more drug dealing and death.”

“Through painstaking investigation, we have brought down an elaborate racketeering enterprise built on forgeries and counterfeiting, and we have dried up another source of funding for criminal street gangs,” Director Gramiccioni said.

“The Nine Trey Bloods wouldn’t survive long if they were only about weapons and violence,” said Lt. Col. Andreychak. “We have learned not to underestimate the sophistication of street gangs and their criminal enterprises.”

Monmouth County Prosecutor Valentin said, “The investigation revealed that members of the Bloods are participating in criminal activities beyond those schemes typically associated with criminal street gangs. Law enforcement must be vigilant in adapting our tactics to the ever changing methods used by members of street gangs to victimize our communities and reap illicit benefits from criminal behavior.”

A state grand jury indictment charging the 12 leaders of the conspiracy with racketeering and other charges was obtained on June 30 by the Division of Criminal Justice Gangs & Organized Crime Bureau. It was sealed until today, when a second indictment was obtained charging 19 more participants in the conspiracy.

According to Director Gramiccioni, the multi-agency investigation revealed a conspiracy organized and led by members and associates of the Nine Trey Gangsters set of the Bloods street gang, whose purpose was to defraud banking institutions of large amounts of money through several schemes. The alleged conduct occurred between 2005 and 2007.

Members of the conspiracy would recruit employees of legitimate businesses throughout New Jersey to allow them to copy or scan payroll checks from their employers or personal checks for old personal checking accounts, which they would use in the scheme.

Copying these checks gave them the format of the check, the names on the account, and the corresponding check routing numbers for the accounts. These employees or account holders would be paid money for the information. The information was then used by members of the scheme to forge payroll checks or to issue bad checks drawn on the personal accounts.

The managers of this criminal enterprise utilized laptop computers and portable electronic equipment, such as digital cameras, to create and print counterfeit payroll checks and personal checks payable to other members of the conspiracy.

Members of the scheme would then recruit other participants to assist them in obtaining cash using the counterfeited checks. Two basic schemes were used to obtain money utilizing the forged payroll checks or personal checks:

1. In the first method, the recruiter would recruit an accomplice to cash a check. The recruiter would get a forged check payable to the accomplice. The check would then be taken to a branch of the bank on which the check was drawn. The check would be cashed, and the cash would be split between the recruiter and the co-conspirator.

2. The second method consisted of recruiting individuals with bank accounts in various banking institutions. The account holders provided ATM or debit cards to the recruiters who deposited fraudulent checks into the accounts. The account holder or recruiter would then withdraw money from the accounts when the bank made the funds available, but before the check was determined to be counterfeit. The money obtained from the bank was divided among the account holder, the recruiter and the individual providing the counterfeit check. Account holders were instructed to report to their banks or to the police that they were victims of identity theft.

The investigation has established that this criminal enterprise operated throughout New Jersey, including the counties of Monmouth, Bergen, Burlington, Camden, Essex, Hudson, Hunterdon, Middlesex, Ocean, Passaic, Somerset, Union and Morris.

In all, members of the criminal enterprise were involved in passing approximately $654,000 worth of counterfeit checks between June 2005 and March 2007, and stealing approximately $341,000 from eight banks: Bank of America, PNC Bank, Valley National Bank, JP Morgan Chase Bank, Commerce Bank, Wachovia Bank, Bank of New York, and Sovereign Bank.

Checks ranged in value from $400 to $9,000. The difference in the total value of the checks counterfeited and the money stolen is due to the fact that in a number of instances, the banks discovered the checks were bad and stopped payment or froze accounts.

The case was presented to the state grand jury by Supervising Deputy Attorney General Andrew M. Butchko, deputy chief of the Division of Criminal Justice Gangs & Organized Crime Bureau, and Assistant Prosecutor James Jones of the Monmouth County Prosecutor’s Office, who was deputized as a special deputy attorney general to prosecute the case with Butchko.

The investigation was led by Detective Sgt. Ronald Hampton and Detectives Christopher Stafyleras, Daniel Bergin and Matthew Broderick of the New Jersey State Police Street Gang North Unit; Supervising Deputy Attorney General Butchko of the Division of Criminal Justice Gangs & Organized Crime Bureau; and Assistant Prosecutor Jones of the Monmouth County Prosecutor’s Office.

The first indictment returned on June 30 charges the following six defendants as managers of the bank fraud schemes. Each of these managers has been identified as an alleged member or associate of the Nine Trey Gangsters set of the Bloods street gang.

• Ernst Francois, 36, of Irvington;
• Albens Victor, 27, of Irvington;
• Kenneth Tione Roberts, 34, of East Orange;
• Woody Armand, 33, of East Orange;
• Roosevelt Thelusma, 24, of Newark; and
• Jeffery Dieurilus, 25, of Newark.

Victor is in state prison in New Jersey serving a prior sentence in connection with an unrelated check fraud scheme, and Armand is in federal prison in connection with a US Postal Service case involving postal money orders. Thelusma was arrested after the indictment was returned and is in jail with bail set at $150,000. Arrest warrants were issued for Francois, Roberts and Dieurilus, who remain fugitives.

As a result of the investigation, two other defendants who were members of the Nine Trey Gangsters set of the Bloods pleaded guilty to second-degree racketeering in 2008 for their leadership roles in the bank frauds. Andre Armand, 38, of Irvington, who is Woody Armand’s brother, and Jean Leneus, 26, of East Orange, were each sentenced to six years in state prison.

The first indictment also charges the following six people. It is alleged that they assisted in cashing counterfeit checks, allowed their bank accounts and ATM cards to be used in the scheme, and acted as recruiters, recruiting other account holders to participate in the scheme.

• Bertha B. Cajuste, 32, of Newark;
• Quanise R. Freeman, 25, of Paterson;
• Shamira Janay Champagne, 22, of Clifton;
• Ashley Chante Brown, 25, of Irvington;
• Vanessa L. Brown, 21, of Newark; and
• Ritha Saluste, 31, of Irvington.

All 12 defendants in the first indictment are charged with second-degree racketeering and one or more counts of second- or third-degree theft by deception. All 12 are also charged with one or more counts of third-degree uttering a forged instrument. Nine of the defendants in the first indictment are charged with one or more counts of third-degree attempted theft by deception.

The second indictment, which was returned today, charges the following 19 additional defendants, who allegedly participated in the scheme by cashing counterfeit checks and allowing their bank accounts and ATM cards to be utilized in the scheme:

• Jacinth Alese Buchanan, 23, of Paterson;
• Marcus Dwayne Harris, 46, of Newark;
• Al-Khabir Kwaan Diggs, 29, of Newark;
• Keith F. Chipepo, 26, of Montclair;
• Charles Palmer, 31, of Irvington;
• Matthew Handel Richards, 25, of Plainfield;
• Sakinah Ann Eure, 33, of Perth Amboy;
• Sharelle Patrice Belton, 22, of Paterson;
• Michelle Lynn Horton, 27, of Paterson;
• Linda Jules, 21, of Irvington;
• Gregory S. Salters, 31, of Newark;
• Janina M. Bolden-McCall, 30, of Irvington;
• Linda Robinson, 30, of Bridgeton;
• Dianna D. Huggins, 27, of Jersey City;
• Kelly A. Montes, 27, of Morris Plains;
• Javaira Naimaha Jihad, 22, of Newark;
• Tamika Snowden, 22, of East Orange;
• Jamie J. Tate, 33, of Irvington; and
• Carlton Eugene Brown, 22, of West Orange.

All 19 of the defendants named in the second indictment were charged with second-degree racketeering. Each of the 19 defendants was also charged with one or more counts of third-degree theft by deception or attempted theft by deception, as well as third-degree uttering a forged instrument.

Second-degree crimes carry a maximum sentence of 10 years in state prison and a $150,000 fine, while third-degree crimes carry a maximum sentence of five years in prison and a $15,000 fine. Fourth-degree crimes carry a maximum sentence of 18 months in prison and a $10,000 fine.

The indictments are merely accusations and the defendants are presumed innocent until proven guilty.

The indictments were handed up to Superior Court Judge Linda Feinberg in Mercer County, who assigned them to Monmouth County.