The ringleader of an identity theft scheme targeting New York-based retail accounts pled guilty to identity theft and fraud charges in Manhattan federal court Friday.
According to the U.S. Attorney, Phillip Smith, 55, the head of the four-year-old ring, used fake driver’s licenses, as well as the stolen identities of over 180 people, to buy more than $1 million in merchandise and gift cards at Home Depot, Sears, Kmart, Kohl’s, Best Buy, and other retail stores.
After obtaining the stolen IDs, Smith called customer service at the retailers to verify if the victims had credit accounts. Then he acquired driver’s licenses that incorporated the victims’ personal information. Using those licenses, he charged expensive merchandise and gift cards from retailers based in New York, Connecticut, New Jersey and Pennsylvania. The fraud was complete once he returned the merchandise for store credits, which were eventually sold to other members of the ring for about 60 percent of their face value. Those credits were again resold for 70 percent their value, in some instances.
Officials said that over the past few weeks, Smith’s seven cohorts were charged and pled guilty. They include Winston Harris and Eugene Smith, who used stolen identities to make purchases at the retail stores; Mahmoud Abdul Hussein, Ali Abdul Hussein, and Fadal Abdul Hussein, three brothers who manufactured fake driver’s licenses out of their storefront smoke shops in Greenwich Village, and Francis Hidalgo and Randy White, who resold the illegally obtained store credits. Hidalgo also used credits to purchase building materials to convert two warehouses into marijuana grow-houses.
“For more than three years, these defendants methodically victimized hundreds of New Yorkers in an elaborate scheme to line their own pockets,” said New York State attorney general Eric Schneiderman. “We will aggressively crack down on identity theft, and these guilty pleas send a message: Identity thieves will go to jail.”
Smith faces up to 22 years in prison with a mandatory minimum term of two years. His sentencing is scheduled for Feb. 20. The coconspirators generally face between two and 22 years, with Hidalgo facing a maximum of 55 years in jail and a minimum sentence of five years.