14 December 2004 – LAWFUEL – First for law news – A Rancho Palos Verdes man who financed his law school education with proceeds from a credit card fraud scheme was convicted today on various federal fraud charges related to the $1.2 million scheme.
Christian Ehlers, 29, was found guilty late today of conspiracy, eight counts of use of false names in a scheme to defraud, 11 counts of unauthorized use of access devices (credit cards) and one count of wire fraud. The federal jury that convicted Ehlers heard two weeks of testimony and deliberated for approximately 2½ hours.
Two other defendants in this case have previously pleaded guilty. Mark Sandoro, 44, pleaded guilty on March 3 to 22 felony counts. Alex Mascola, 30, who was scheduled to go to trial with Ehlers, pleaded guilty on the eve of trial to two counts of misuse of a Social Security Number.
Sandoro, Ehlers and Mascola, using their true names and in some instances assumed names, rented Post Office boxes in Lomita, Rancho Palos Verdes, San Pedro and Torrance. The men listed various assumed names as persons authorized to receive mail at the Postal facilities, and then they used various names to apply for and obtain credit cards.
The men applied for the credit cards using false SSNs, and they used the rented Post Office boxes as their mailing addresses. After receiving the fraudulently obtained credit cards, Sandoro, Ehlers and Mascola charged hundreds of thousands of dollars worth of goods and services. The men also used the fraudulently obtained credit cards to obtain cash, which they used for a variety of purposes, including making minimum payments to the card-issuing companies so that they could continue to charge to the credit cards.
To further their scheme, Sandoro, Ehlers and Mascola applied for and obtained “point of purchase” terminals from financial institutions. These terminals are used by merchants to obtain approval of charges to credit cards at the time customers purchase items or services, and to obtain payment for such charges from card issuing companies. The men purported to obtain the terminals on behalf of companies with which they maintained a relationship or which they had created for purposes of executing the fraud. The men used the terminals to process charges made to credit cards they had fraudulently obtained, and to cause the card issuing companies to make payments to them for fraudulently incurred charges. This type of fraud is called a “bust-out” scheme.
Sandoro, Ehlers and Mascola used the cash they fraudulently obtained to purchase and improve a home in Rancho Palos Verdes, to operate various businesses, and to purchase automobiles, motorcycles, and other personal items. The evidence presented at trial showed that Ehlers used some of the money to pay tuition at the Loyola Law School, to pay for liposuction and to purchase luxury automobiles.
The total loss suffered by six financial institutions is approximately $1.2 million.
All three defendants are scheduled to be sentenced by United States District Judge J. Spencer Letts on February 5, 2005. Ehlers faces a maximum possible penalty of 175 years. Mascola faces a maximum possible penalty of 10 years. Sandoro could be sentenced to as much 180 years in prison.
This case was investigated by the United States Secret Service and the Office of the Inspector General for the Social Security Administration.
