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Financial Crimes
10/31/2013

Grocery store owner sentenced to 4 years in $10 million money order fraud case

PHOENIX — A Chandler grocery store owner has been sentenced to more than four years in prison and fined more than $300,000 for his role in a bank fraud scheme involving more than $10 million in fake money orders.

The sentence follows a joint probe by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), Internal Revenue Service Criminal Investigation and the Chandler Police Department.

Gjergj Kol Mihilli, 61, of Gilbert, was sentenced Monday to 51 months in federal prison by U.S. District Judge G. Murray Snow, after previously pleading guilty to bank fraud and aggravated identity theft charges. In addition to the prison term, Snow ordered Mihilli to pay a fine of more than $302,000.

Mihilli, owner of Mama Mia Panaderia & Market in Chandler, and his sons were arrested by HSI in November 2012. The sons' cases are pending in federal court.

According to court documents, Mihilli contracted with Merchants Bank of California so the store could sell the bank's Unigram money orders. The store also maintained two business accounts with Wells Fargo Bank. Between May 2010 and June 2011, Mihilli operated a scheme in which the store issued thousands of false, worthless money orders, utilizing fictitious names. The false money orders were then deposited into the Wells Fargo business accounts, thus artificially inflating the account balances, so that funds were made available to pay Merchants Bank for issuing the money orders.

During the life of the scheme, Mihilli deposited more than 10,000 false money orders totaling approximately $10 million.