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$900,000 Credit Card Bust-Out Scheme $900,000 Credit Card Bust-Out Scheme 63 Months in Federal Prison

LawFuel.com – American Law Newswire –
Los Angeles – The perpetrator of a credit card bust-out scheme has been sentenced to 63 months in federal prison for his conviction on conspiracy, mail fraud, bank fraud, and money laundering charges.

Mahmoud Khalid Azzam, of Redondo Beach, was sentenced yesterday in United States District Court in Los Angeles. In his plea agreement Azzam admitted that he, in conjunction with his co-conspirators, obtained point of sale terminals to swipe credit cards to fraudulently obtain money from victim banks.

Azzam admitted that he worked with co-conspirators Charles Nix and Shelly Poling, who have both pleaded guilty to participating in the scheme.

According to his plea agreement, Azzam and Nix provided Poling with credit card applications that Poling completed using the names of non-existent individuals, as well as people who knew that their names would be used as a part of this scheme. Poling completed the credit card applications, using false information including names, places of employment, social security numbers, and/or annual salaries.

After fraudulently obtaining the credit cards, Azzam and Nix swiped the cards through their point of sale terminals, creating the appearance that goods or services had been paid for with the credit card. Once the point of sale transaction was approved, the credit card company transferred money into bank accounts controlled by Azzam and his co-conspirators.

Azzam admitted that he and his co-conspirators used fraudulently obtained funds in an effort to promote and conceal the scheme. To do this, Azzam and his co-conspirators would pay for initial purchases of merchandise with checks, in the names of fictitious businesses and individuals, in order to create a good line of credit, enticing the victim companies to increase the line of credit on an account.

Azzam and his co-conspirators eventually abandoned the credit cards they established during the course of the scheme and failed to pay the victim companies for all of the transactions conducted. Azzam admitted that, as a result of the fraudulent transactions, the members of the conspiracy obtained approximately $900,000.

In addition to prison, Azzam was also sentenced by United States District Judge George H. King to pay restitution of $956,718.91 to victim banks defrauded by his scheme and to spend 5 years on supervised release after serving his prison sentence.

Nix previously pleaded guilty to conspiracy, mail fraud, bank fraud, and wire fraud charges in connection to this scheme. He faces a statutory maximum 75 years in federal prison and fines totaling $1,750,000. Poling also pleaded guilty to conspiracy, mail fraud, wire fraud, and money laundering charges in connection to her conduct in this case. Poling faces a statutory maximum 85 years in prison and fines totaling $1,750,000 when sentenced by Judge King. Both Nix and Poling are scheduled to be sentenced by Judge King later this year.

Judge King ordered Azzam to begin serving his prison sentence on April 8, 2010.

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