North Brunswick man admits conspiring to commit bank fraud

A New York woman, an Ohio man and a New Jersey man admitted their roles in a large-scale conspiracy to commit bank fraud in states including New Jersey, New York, Pennsylvania, Maryland, Virginia and Michigan.

Erm Ayaz, 36, of Bayside, Brooklyn, pleaded guilty today by videoconference before Chief Judge Freda L. Wolfson to an information charging her with one count of conspiracy to commit bank fraud, according to information provided by Acting Attorney Rachael A. Honig on April 29.

Syed Abbas, 32, of Westerville, Ohio, and Habib Majid, 35, of North Brunswick, pleaded guilty before Wolfson on April 27, and April 21, respectively, to informations that charged them each with one count of conspiracy to commit bank fraud, according to the statement.

Ayaz, Abbas, and Majid are among seven individuals that have pleaded guilty as part of the scheme.

According to documents filed in this case and statements made in court, from 2018 through April 2020, Ayaz, Majid, Abbas and others conspired to defraud several major banks and electronic merchant processors. They established bank accounts associated with sham entities that had no legitimate purpose and issued checks payable to other shell companies associated with the criminal organization, knowing that the payor accounts had insufficient funds. The conspirators also conducted numerous fraudulent credit card and debit card transactions between shell companies to credit payee accounts and fraudulently overdraw payor accounts.

Members of the conspiracy also used these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization, where no prior legitimate transaction had occurred.

Members of the criminal organization withdrew the “existing” funds (through ATMs or bank tellers) that banks and/or merchant processors had credited to the payee bank accounts at the time of the fraudulent transaction. Because the conspirators withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks and merchant processors were left with substantial losses.

The investigation revealed that Ayaz, Majid, Abbas, and other conspirators attempted to defraud financial institutions and merchant processors of approximately $10 million dollars and did in fact cause a loss of approximately $3.5 million.

The conspiracy charges which Ayaz, Abbas, and Majid pleaded guilty carry a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross gain to the defendants or loss to others, whichever is greater.

Ayaz’s sentencing is scheduled for Sept. 14. Abbas’ and Majid’s sentencings are scheduled for Sept. 9.

Four co-defendants – Awaise Dar, Rana Sharif, Naveed Arif, Ali Abbas – have previously pleaded guilty to informations charging them with conspiracy to commit bank fraud in connection with the scheme.