TRENTON – Acting Attorney General Robert Lougy announced that the ringleader in a counterfeit check scheme was sentenced to state prison today for stealing $590,000 from various banks by depositing counterfeit checks and withdrawing the check amounts before the fraud was discovered.
Harold Stephens, 32, of Elizabeth, was sentenced to 11 years in state prison by Superior Court Judge Michael Toto in Middlesex County. Stephens pleaded guilty on Jan. 15 to second-degree charges of theft by deception and money laundering. He was sentenced to six years on the theft charge and a consecutive term of five years for money laundering. Stephens is jointly and severally liable with his two co-defendants for paying full restitution of $590,354.
On March 14, Judge Toto sentenced Michael Caldwell, 40, of Irvington, to seven years in state prison and sentenced Janilyn Roman, 33, of Orlando, Fla., to six years in state prison. Each of those co-defendants pleaded guilty on Aug. 3, 2015 to second-degree theft by deception for their roles in the counterfeit check scheme.
Deputy Attorney General Jeffrey Manis, Deputy Chief of the Division of Criminal Justice Corruption Bureau, and Deputy Attorney General Mallory Shanahan prosecuted the defendants and handled the sentencing hearing. Deputy Attorney General Cambridge Ryan also worked on the prosecutions.
The defendants were indicted on Feb. 25, 2015 in an investigation by detectives and inspectors of the New Jersey State Police Official Corruption North Unit, the Division of Criminal Justice Financial & Computer Crimes Bureau, and the Newark Division of the U.S. Postal Inspection Service. Between January 2012 and September 2014, Stephens, Caldwell, Roman and other participants in the scheme deposited roughly 300 counterfeit checks in amounts totaling over $1.6 million into numerous third-party bank accounts at branch offices of five major banks in New Jersey, Pennsylvania, Delaware and Florida. Stephens, Caldwell and Roman then stole approximately $590,354 by withdrawing funds from the deposit of the counterfeit checks before the banks discovered the fraud.
“These defendants relied on computer graphics and banks with customer-friendly policies on availability of funds to essentially print money in the form of counterfeit checks,” said Acting Attorney General Lougy. “We put a stop payment on their check scheme through our joint investigation, and we’ve sent a strong message with these prison sentences that we’ll aggressively prosecute white collar crime.”
“We followed the financial tracks of these defendants across jurisdictional lines to gather the evidence needed to bring them to justice,” said Director Elie Honig of the Division of Criminal Justice. “This was a major fraud case in which we made excellent use of the reach of our federal partners and the financial expertise of both state and federal investigators.”
“This criminal group has clearly overdrawn their freedom account by ripping off others and they can now pay back that debt in jail,” said Colonel Rick Fuentes, Superintendent of the New Jersey State Police. “The investigation went well beyond state lines and without the hard work of our allied agencies, these conspirators may not have been brought to justice.”
“Postal Inspectors, along with other law enforcement agents, unraveled a sophisticated counterfeit check scheme that resulted in thousands of dollars in losses,” said Inspector in Charge Maria Kelokates, Newark Division of the U.S. Postal Inspection Service. “Postal Inspectors will continue to aggressively pursue investigations in which Postal Service products and the U.S. Mail are used to facilitate a crime.”
Stephens purchased legitimate checks from people for a small price, often targeting customers entering check cashing businesses. He then used a computer graphics program to print counterfeit checks which matched the legitimate checks but which were written for large sums payable to other persons. Stephens used Caldwell, as a “recruiter” to obtain bank account information, debit cards and pin numbers from people willing to be named as payees on the counterfeit checks. The defendants would then use the payees’ bank accounts to deposit the checks and withdraw the proceeds, a process Stephens referred to as “washing” the checks. The recruiters and payees were paid by the defendants for their roles in the scheme. Roman was involved in depositing counterfeit checks in Florida.
The defendants targeted banks that allow funds from deposited checks to be withdrawn by their customers the next day. In some instances, the payees would open a new account that would be used to “wash” counterfeit checks. To further launder the stolen funds, Stephens would use them to purchase money orders and gift cards for various stores.
Stephens and Caldwell were arrested at their homes on Aug. 6, 2014, by members of the investigating agencies. Roman was arrested the following day, Aug. 7, 2014, by the Orlando Police Department. She was extradited to New Jersey with the assistance of the U.S. Marshals Service.
Acting Attorney General Lougy commended the work of the Division of Criminal Justice Corruption Bureau, the New Jersey State Police Official Corruption North Unit, the Division of Criminal Justice Financial & Computer Crimes Bureau, and the Newark Division of the U.S. Postal Service Inspection Service. Acting Attorney General Lougy also thanked the Piscataway Police Department for providing valuable assistance in the investigation.
