Jewelry Store Owner, Vijay Verma, Admits Role in International, $200 Million Credit Card Fraud Scheme

A New Jersey jewelry store owner who used his business to further one of the largest credit card fraud schemes ever charged by the Justice Department, became the 18th conspirator to admit his role in the scheme, U.S. Attorney Paul J. Fishman announced.

Vijay Verma, 46, of Iselin, N.J., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of access device fraud. According to documents filed in this case and statements made in court:

Verma was 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. 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 admitted he allowed others who came to his Jersey City, N.J., store to swipe cards he knew did not legitimately belong to them. Verma would then split the proceeds of the phony transactions with these other conspirators. The count to which Verma pleaded guilty carries a maximum potential penalty of 15 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Sept. 25, 2014.