Fake-CU Scammer Gets 18-Months
It was swift justice for the man believed responsible for bilking hundreds, if not thousands, of Americans through phony credit unions over the past year.
Leslie Card, a 35-year-old Jamaican national accused of running a boiler-room operation that used names of legitimate and fictitious American credit unions to induce people to wire him funds, pleaded guilty in Ontario Provincial court to two counts of financial fraud and was sentenced to 18 months in prison.
His brother Kevin Card, 33, also suspected of participating in the credit union scam, is scheduled for trial on drug and weapons charges for June 30.
But authorities don't expect the phony credit union scam to stop. "No, this won't end it," said Detective Jim White of the Toronto Police. "They're just part of a bigger picture. It's too lucrative of an operation. These guys are part of a larger ring. We've pretty much arrested all of them, except for the two top people."
White added that authorities expect to make more arrests related to the case.
But authorities believe the Cards were the main perpetrators in an ongoing scheme that used stolen credit card information to buy ads in U.S. newspapers purporting to sell debt consolidation, credit insurance and mortgage loan originations through phony credit unions, often with "shadow" websites similar to legitimate credit unions of the same name, like Heartland CU, Century CU, Credit Union One and America's Choice CU. Other credit union names used in the scheme were Zurich CU and Continental CU. The ads ran in as many as 23 states over the past year.
The Heartland CU scheme was apparently the most lucrative, according to White, as authorities have been able to trace about $295,000 (U.S.) in funds raised from it. And that's with an estimated 5% reporting rate, as as much as 95% of these crimes go unreported, he explained.
Funds Found, May Be Untouchable
Canadian authorities have located about $350,000 of the funds in an account held by Card in Jamaica but are not expected to be able to retrieve the money because of a lack of a treaty with the island country, said White. As a result, they expect there to be an insignificant amount to be available for restitution to victims. "We've seized some money. The court will determine whether it will be paid back to victims or not," he said.
The suspects were able to carry out the scheme for so long for several reasons, according to White. First, the victims were in the U.S., making it a lower priority for Canadian authorities. "They strictly targeted Americans," he said. Second, most of incidents were of smaller amounts, less than $1,000, also lowering the case on the list of priorities for law enforcement. And third, legal jurisdictions included two countries and 23 states.
The investigation into the scam involved a joint international task force that included representatives from the Toronto Police, Royal Canadian Mounted Police, Ontario Ministry of Consumer and Business Services, York Regional Police Service Fraud Squad, Ontario Police Anti-Rackets Squad, the U.S. Federal Trade Commission, U.S. Postal Inspection Service, U.S. Justice Department, and NCUA, and several others.
White expects the scheme to resurface in one form or another again in the future. He said the Cards are part of a larger organization adept at financial fraud and identity theft that has also used the names of banks, insurance companies. "They pretty much used every form of financial institution in North America," said White. "They've been operating for 10 years. They've done a lot of damage."