Several Southern California residents are among 14 defendants charged in a federal racketeering scheme to steal millions of dollars from consumers’ bank accounts, officials announced Wednesday.
A total of 14 people were charged in the seven-count indictment alleging conspiracy to violate the RICO Act, according to the U.S. Attorney’s Office for the Central District of California.
Members of the criminal enterprise allegedly created shell companies that claimed to offer products or services such as cloud storage, according to the indictment. After obtaining identifying and banking information of the victims, the defendants allegedly “executed unauthorized debits against victims’ bank accounts, which it falsely represented to banks were authorized by the victims,” officials said.
Because some of the unauthorized debits ended in returned transactions, the enterprise’s shell companies also generated “micro debits” against other bank accounts, officials said.
The micro debits then allegedly lowered the shell companies’ return rates to levels that the conspirators believed would reduce bank scrutiny and lesson potential negative impact, according to the indictment.
Five people involved in the scheme were arrested Tuesday:
- Edward Courdy, 73, of Hawaiian Gardens
- Eric Bauer, 65, of Huntington Beach
- Veronica Crosswell, 35, of Long Beach
- Jenny Sullivan, 46, of Denver
- John Beebe, 52, of Honolulu
One defendant, Linden Fellerman, 67, of Las Vegas, agreed to surrender himself to authorities in Los Angeles on Friday.
Three others have been summoned to appear in U.S. District Court in Los Angeles on May 24:
- Michael Young, 41, of Hollywood, Florida
- Randy Grabeel, 71, of Pittsburg, California
- Debra Vogel, 68, of Las Vegas
Additionally, five other defendants have not been arrested and are being sought by authorities:
- Guy Benoit, 68, a resident of Canada and Cyprus
- Steven Kennedy, 54, of Canada
- Sayyid Quadri of Canada
- Ahmad Shoaib, 63, of Canada
- Lance Johnson, 52, of Laveen, Arizona
All of the defendants, except Grabeel and Vogel, are also charged with at least once count of wire fraud.
“This sophisticated scheme allegedly generated millions of dollars in revenue by using consumers’ personal information to fraudulently reach straight into the bank accounts of thousands of Americans,” U.S. Attorney Martin Estrada said. “The indictment alleges that an international network of fraudsters engaged in a wide-ranging scheme which sought to victimize consumers while concealing their activities from banks and law enforcement authorities.”