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September 1, 2022Los Angeles, CA, United StatesFinancial Crimes

HSI investigates synthetic identities scheme that defrauded banks nearly $2M

LOS ANGELES – A Georgia man was sentenced Sept. 1 to more than seven years in federal prison for participating in a nationwide fraud ring that used stolen social security numbers, including those belonging to children, to create synthetic identities used to open lines of credit, create shell companies, and steal nearly $2 million from financial institutions. The case was investigated by Homeland Security Investigations (HSI).

Corey Cato, 41, of Atlanta, Georgia, was sentenced by United States District Judge R. Gary Klausner, who also ordered him to pay $1,908,481 in restitution. Cato pleaded guilty on May 9 to one count of conspiracy to commit financial institution fraud and one count of aggravated identity theft.

No later than 2017, Cato joined conspiracies to defraud banks and illegally possess credit cards. Cato and his co-conspirators created “synthetic identities” by combining false personal information such as fake names and dates of birth with the information of real people, such as their social security numbers. Cato and others then used the synthetic identities and fake ID documents to open bank and credit card accounts at financial institutions. Cato and his co-conspirators used the unlawfully obtained credit cards to fund their lifestyles.

As part of the scheme, Cato maintained a commercial mail receiving agency space called “Pak Mail” in Georgia where he and his co-conspirators received correspondence related to the synthetic identities, including bank account and credit card statements, while insulating their personal addresses from detection.

Using a stolen social security number and fake California driver’s license, Cato rented an apartment in Atlanta under the name “Jason Brown,” where, in February 2019, he possessed credit cards and financial information in the names of synthetic identities like “Adam M. Lopez” and “Carlos Rivera.”

“[Cato] and his co-conspirators built their wealth off the backs of the people whose identities they stole, many of them children,” prosecutors argued in a sentencing memorandum. “Both the effects on these victims’ credit histories and their sense of violation are impossible to quantify, but they provide further reminder of the seriousness of [Cato’s] crime and the callousness of his conduct.”

This investigation is one of a series of cases that has resulted in criminal convictions for 12 defendants, including Turhan Lemont Armstrong, 52, of Northridge, who was convicted at trial in 2019 of 51 counts of fraud, money laundering, identity theft and other federal offenses.

Assistant United States Attorneys Alexander B. Schwab of the Major Frauds Section and Allison L. Westfahl Kong, Chief of Trials, Integrity, and Professionalism, prosecuted this case.

HSI is the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce of over 10,400 employees consists of more than 6,800 special agents assigned to 225 cities throughout the United States, and 86 overseas locations in 55 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.