Prison Sentence For Harvesting Millions Of Bank Customers’ Dollars And Wire-Fraud Ruse
SANTA ANA – The Justice Department announced yesterday that Neil Godfrey (79) was sentenced to serve 15 months in prison in Philadelphia, PA for processing unauthorized withdrawals of millions of dollars from consumer bank accounts.
Judge Eduardo Robreno in the Eastern District of Pennsylvania also ordered Godfrey to pay a $50,000 fine, serve one year of supervised release, and entered a $100,000 forfeiture money judgment.
The payment processing company president and part-owner pleaded guilty in 2015 to a one-count charging him with wire fraud for enabling fraudulent merchants to withdraw consumers’ money without their knowledge or consent.
This fraud scheme through Check Site Inc. of Santa Ana assisted at least two fraudulent merchants who devised website subscriptions, clubs, sweepstakes and payday loans to harvest consumers’ bank account information, then withdraw money without consumers’ knowledge. Godfrey’s ruse processed the fraudulent withdrawals and provided merchants access to the banking system.
Remotely-created checks (RCCs) with consumers’ names and bank account information were submitted without the signature of the account holder. Check Site kept a fee and transferred the remainder of the withdrawals to the fraudulent merchants.
Godfrey helped fraudulent merchants stay off the radar of regulators and bank employees, and advised merchants how to change names of their companies and create the facade of a legitimate company – all to defeat banks’ attempts at due diligence.
Godfrey used banks that were willing to facilitate these transactions and ignore red flags raised by these transactions so that the ruse could continue.
Evidence presented included Godfrey’s damaging email message, “The lesson we have learned is that we must trick the [bank] folk. It means you need to set up some type of website front. What we need to do is set up a legitimate website selling anything you can think of – that is what you get approved on. It is irrelevant if anything is ever sold there – just so it exists. . . . In the mean time we set up false credit card approval etcetera. It is this we use to run the transactions. Yes, there will be a lot of returns, but what we do is send through transactions over the next few weeks that don’t have high returns. They stop looking and then we can run the regular stuff. . . . After several months we junk that company and go to another company.”
Acting Assistant Attorney General Chad A. Readler of the Justice Departments’ Civil Division thanked the Federal Trade Commission for providing Attorney Michelle Chua to serve as a Special Assistant U.S. Attorney on the case, and commended the FBI and the Federal Deposit Insurance Corporation Office of Inspector General for their thorough investigation. The case is being prosecuted by Assistant U.S. Attorney Patrick J. Murray of the Eastern District of Pennsylvania and Trial Attorney Kathleen Konopka of the Civil Division’s Consumer Protection Branch.
“Payment processors who knowingly facilitate consumer fraud commit a federal offense,” asserted Readler. “We are committed to protecting consumers from unknown withdrawals from their bank accounts, and we will prosecute any individual who knowingly assists these fraud schemes.”