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Financial Crimes

Pennsylvania man sentenced to 3 years in prison for bank fraud scheme

Maryland healthcare employee used stolen client information to open fraudulent bank accounts

BALTIMORE — A 35-year-old Philadelphia man was sentenced Wednesday to three years in prison, followed by three years of supervised release, for bank fraud and aggravated identity theft in connection with a scheme to use stolen personal identities to open bank accounts and fraudulently obtain cash, merchandise and services.

Derrick Elrod, who was an advisor at Resources for Human Development, Inc. (RHD), a residential program that supports individuals with mental health needs, was sentenced by U.S. District Judge Catherine C. Blake. RHD is a nonprofit social services organization headquartered in Philadelphia.

The sentence follows an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI); the Wicomico County Sheriff's Office; the Internal Revenue Service (IRS), Criminal Investigation (CI), Washington, D.C. Field Office; and the Social Security Administration, Office of Inspector General, Philadelphia Field Division.

"The investigation of financial crimes is an HSI priority," said HSI Special Agent in Charge in Baltimore William Winter. "Derrick Elrod abused his position of trust by stealing identity information that was entrusted to him to facilitate a fraud scheme for his own personal benefit. HSI will continue using all its resources to bring to justice individuals like Elrod who think that their illegal actions can go undetected."

"Today's sentencing is another example that crime really does not pay," said Thomas J. Kelly, special agent in charge of IRS CI. "IRS Criminal Investigation welcomes opportunities to assist the Department of Justice and their law enforcement partners with dismantling criminal conspiracies profiting from bank fraud and identity theft."

According to Elrod's plea agreement, beginning in or before April 2010, Elrod became part of a bank fraud conspiracy led by Christopher Andre Devine when he opened a checking account into which Devine and his co-conspirators deposited fraudulent checks totaling $4,800. Devine and others at his direction then made approximately $2,028.83 in cash advances and retail purchases before the bank returned the checks for insufficient funds.

After that, Elrod used his position at RHD to steal the personal identifying information of past or present residents of RHD. Elrod sold the personal information of at least 40 residents of RHD programs to Devine during Devine's many trips to Philadelphia.

Over the course of the scheme, Devine and his conspirators used the stolen information of at least four RHD residents to open checking accounts at banks and deposited at least $11,598 in fraudulent checks into those accounts. Approximately $9,858 in cash advances and retail purchases were made from those accounts before the banks returned the checks for insufficient funds. Devine even paid a friend to create a fraudulent driver's license using the stolen information of one of the victims, but with Devine's photo.

In addition, Devine used the stolen personal information of RHD program residents to file at least 13 false tax returns for the 2010 tax year claiming $51,987 in fraudulent refunds. Many of the false refunds were direct deposited into bank accounts controlled by Devine through the bank fraud scheme. The fraudulent refunds received through the tax scheme totaled $36,552.

The stolen personal information of 15 RHD program residents was used in the bank fraud and tax schemes.

Christopher Devine, 33, Quanishia Williamson-Ross, 31, Quashonna Williamson, 26, and Lenee E. Williamson, 22, all of Salisbury, Md., Frederica, Del., and Philadelphia and John Waters, 38, of Philadelphia, previously pleaded guilty to their participation in the conspiracy. Devine was sentenced to 121 months in prison, Williamson-Ross was sentenced to 42 months in prison, Lenee and Quashonna Williamson were each sentenced to three years in prison and Waters was sentenced to 27 months in prison.

This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.

The case was prosecuted by U.S. attorneys Paul E. Budlow and Kristi N. O'Malley.