LAWFUEL – Legal Newswire – MICHAEL J. GARCIA, the United States Attorney for the
Southern District of New York, announced that BERNARD ELLIS was
sentenced this afternoon to 60 months’ imprisonment for
participating in a sprawling bank fraud conspiracy, from
approximately 2005 to approximately April 2006, involving large
corporate checks that were stolen from a JP Morgan Chase & Co.
(“JP Morgan”) mailroom facility in Brooklyn. United States
District Judge VICTOR MARRERO imposed the sentence in Manhattan
federal court. According to documents publicly filed in the
case:
On April 21, 2006, ELLIS’s co-conspirator, GREGORY
HALLEY, was arrested at the JP Morgan mailroom facility in
Brooklyn, where JP Morgan operates a “lockbox” system on behalf
of various large, corporate account holders. Under the “lockbox”
system, an individual or entity seeking to pay one of the
participating account holders by check is provided a mailing
address that causes the check to be delivered directly to JP
Morgan, rather than to the account holder’s corporate address.
Upon receiving the check on behalf of the account holder, JP
Morgan processes the check and credits the amount of the check to
the account holder’s account.
From at least 2005 until his arrest, HALLEY used his
employment in the mailroom where JP Morgan processes lockbox
checks to steal more than $100 million worth of checks. HALLEY
then gave the checks to co-conspirators in exchange for cash
payments. BERNARD ELLIS was one such co-conspirator who was
arrested after receiving stolen checks from HALLEY. During a
search of ELLIS’s car the same night, United States Postal
Inspectors recovered approximately 100 stolen lockbox checks
totaling approximately $7 million. HALLEY, who pleaded guilty to
one count of conspiring to commit bank fraud, will be sentenced
by United States District Judge BARBARA S. JONES on a date yet to
be scheduled.
ELLIS’s sentencing followed another earlier this week
of KENNY OLA LABBE, who participated in a scheme to negotiate
stolen lockbox checks. LABBE was arrested on January 23, 2006,
after he was caught mailing altered, stolen lockbox checks from a
FedEx store near JFK International Airport. The payees’ names on
the stolen checks had been substituted with names of individuals
who were solicited over the internet to participate in a
supposedly legitimate financial transaction, whereby the
individuals agreed to deposit the checks into bank accounts and
wire a portion of the funds overseas. Over a 30-day period,
LABBE mailed an estimated $12 million of stolen lockbox checks
from the FedEx store to these various individuals. LABBE, who
pleaded guilty to transporting and conspiring to transport stolen
goods in interstate commerce, was sentenced on January 29, 2008,
to 87 months’ imprisonment by United States District Judge ROBERT
W. SWEET. The Court also imposed forfeiture in the amount of $12
million.
HILLARY AGUGBO, another individual arrested and
indicted for participating in a scheme to negotiate checks stolen
from the lockbox facility, was sentenced on April 20, 2007, to 46
months in prison, by United States District Judge P. KEVIN
CASTEL.
Mr. GARCIA praised the investigative work of the United
States Postal Inspection Service and the United States Secret
Service.
This case is being prosecuted by the Office’s Major
Crimes Unit. Assistant United States Attorneys SEETHA
RAMACHANDRAN and MICHAEL A. LEVY are in charge of this
prosecution.
08-26 ###
