HARTFORD, Conn. - A citizen of China, who last resided in Bayside, Queens, N.Y., was sentenced Tuesday in U.S. District Court to 18 months for operating a credit card "bust-out" scheme that defrauded financial institutions of more than $200,000. The case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) along with a number of other tribal, state and federal agencies.
Guang Ming Zhao, 35, a citizen of China last residing in Queens, N.Y., was sentenced by U.S. District Judge Robert N. Chatigny in Hartford. Zhao must also serve three years of supervised release. According to the evidence Zhao advertised in the "credit" section of the World Journal, a Chinese language newspaper based in New York, offering to help individuals obtain money from their bank or credit card accounts.
In July 2010, an individual working with law enforcement answered the ad, and Zhao confirmed that he would be able to assist the individual obtain a cash advance from a credit card account that already had charges up to its limit, and therefore had no funds available. Zhao and the individual then agreed to meet in Connecticut.
In the early morning hours of July 28, 2010, Zhao and the individual met in Connecticut and at a casino. At Zhao's request, the individual provided him with a credit card and other identifying information, including a driver's license. The credit card account provided to Zhao had current charges up to its maximum, and therefore had no additional funds available. Zhao then wired $15,706 to the individual's credit card account from an account at TD Bank that Zhao knew had insufficient funds to support the wire transfer.
The $15,706 that was credited to the credit card account made it appear that the account balance had been paid, and that there was money available in the account to support cash advances.
On July 30, 2010, Zhao and the individual again met at the casino and, over the next five hours, Zhao directed the individual to obtain three cash advances from the credit card account totaling $12,300. Zhao then directed the individual to pay him a percentage of each of the cash advances.
On Feb. 14, 2011, Zhao pleaded guilty to one count of access device fraud stemming from the scheme. In pleading guilty, Zhao admitted that he assisted at least 25 individuals obtain fraudulent cash advances using this scheme, and that he defrauded several financial institutions of at least $227,597. Zhao also admitted that he used the credit card account described above to make two payments, one to the World Journal in the amount of $1,255, and one to Countrywide Insurance in the amount of $1,000, causing an additional loss of $2,255.
Judge Chatigny ordered Zhao to pay restitution in the amount of $229,852.66. He has been detained since his arrest on July 30, 2010.
The U.S. Attorney's Office commended the substantial efforts and cooperation of several organizations assisting ICE HSI in the investigation, including the following agencies: the Mashantucket-Pequot Tribal Office of Inspector General and Surveillance Department; the Connecticut State Police Casino Unit; the U.S. Citizenship and Immigration Service's Office of Fraud Detection and National Security; and the loss prevention departments of J.P. Morgan Chase, Citibank, Capitol One, Bank of America, and Global Cash Access Inc.