BY KATHY CHANG
Staff Writer
TRENTON — The two owners of a Jersey City jewelry store were sentenced to jail time and home confinement in their respective roles in what Acting United States Attorney William E. Fitzpatrick called one of the largest credit card fraud schemes — $200 million — charged by the U.S. Department of Justice.
Vijay Verma, 49, and Tarsem Lal, 78, both of Iselin, were sentenced to 14 months in prison and 12 months of home confinement, respectively on March 27 in federal court.
Both men previously pleaded guilty before U.S. District Judge Anne E. Thompson in federal court in Trenton to one count of access device fraud.
Verma and Lal were indicted in October 2013 as part of a scheme to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards, according to documents filed in this case and statements made in court.
Participants in the scheme doctored credit reports to pump up the spending and borrowing power associated with the cards.
They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts causing more than $200 million in confirmed losses to businesses and financial institutions.
These debts were incurred at Verma’s jewelry store, among many other locations, where Verma would allow fraudulently obtained credit cards to be swiped in phony transactions.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; then run up large charges.
The scope of the criminal fraud enterprise required other scheme participants to construct an elaborate network of false identities.
Across the country, they maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.
Verma and Lal each admitted allowing others who came to their Jersey City store to swipe cards they knew did not legitimately belong to them. Verma and Lal would then split the proceeds of the phony transactions with these other conspirators.
In addition to the prison terms, Thompson sentenced Verma to three years of supervised release and Lal to three years of probation. Each defendant was fined $5,000 and ordered to pay forfeiture of $451,259.
In January, Babar Quershi, 63, of Iselin, was sentenced to over three years in prison for his role in the credit card scheme.
Fitzpatrick credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher; postal inspectors from the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge James V. Buthorn; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to the sentencings. He also thanked the U.S. Social Security Administration Office of Inspector General, Office of Investigations in New Jersey for assisting in the investigation.
The government was represented by Assistant U.S. Attorneys Zach Intrater and Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward of the office’s Asset Forfeiture Unit in Newark.
This case is part of efforts underway by the Financial Fraud Enforcement Task Force, which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.
Verma was represented by Attorney Gerald Krovatin and Lal was represented by Attorney Paul Condon.
