Opinion ID: 729705
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 The Appellants defrauded various banks and credit card companies by processing hundreds of fraudulent charges on stolen credit cards to obtain cash. They posed as legitimate business owners, which allowed them to obtain the electronic machinery by which they processed false charges to the stolen credit cards. 3 Before describing the details of the Appellants' scheme, a review of the mechanics of a typical credit card transaction is helpful. The primary victims of the conspiracy are known as issuing banks. Issuing banks are members of VISA and MasterCard, not-for-profit associations of member banks that operate a worldwide communication system for financial transfers using credit cards. Issuing banks issue credit cards to consumers, enabling those consumers to make credit-card purchases at participating businesses. To accept credit cards, businesses must open an account with a merchant bank. Merchant banks, like issuing banks, are members of VISA and MasterCard, but merchant banks have accounts with businesses, not consumers. Once a business is electronically connected with a merchant bank, it can accept a consumer's credit card by processing the credit card through a point-of-sale terminal provided to it by the merchant bank. If the merchant bank approves the sale, it immediately credits the business for the amount of the consumer's purchase. The merchant bank then transmits the information regarding the sale to VISA or MasterCard, who in turn forward the information to the bank that issued the card to the consumer who made the purchase. If the issuing bank approves the sale, it notifies VISA or MasterCard and then pays the merchant bank at the end of the business day. The issuing bank carries the debt until the cardholder pays the bill. 4 The Appellants opened approximately ten sham businesses and applied for merchant accounts for those businesses with Comdata Corporation, Western Union, Discover Card, and First Interstate Bank of South Dakota. The Appellants used these businesses to defraud the banks and credit card companies in two different ways. 5 In one method, the Appellants applied for merchant credit card accounts for their sham businesses. At these businesses, the Appellants processed stolen credit cards in sham transactions in exchange for nonexistent merchandise. After these charges were relayed to the merchant banks, those banks then deposited the amount of each charge directly into the Appellants' bank accounts, and the Appellants withdrew the funds. 2 6 The Appellants also set up sham check-cashing businesses for which they obtained accounts with Comdata and Western Union. At these businesses, the Appellants used the stolen credit cards to purchase Comcheks issued by Comdata Corporation or Flash Cash checks issued by Western Union. The Appellants then deposited the Comcheks into their business bank accounts or had Western Union deposit the amount of the Flash Cash checks into these accounts, and later withdrew the funds. 7 The issuing companies became aware of the fraudulent transactions when the holders of the stolen cards complained that they had not made the charges listed on their respective bills. The scheme involved approximately 270 cardholders and 44 different issuing banks. Charges of $539,135 were made on these credit cards at the Appellants' businesses, all but $16,350 of which were confirmed to be fraudulent. 8 The Government presented the testimony of five credit cardholders, and representatives from Comdata, Western Union, First Interstate, Discover, MasterCard, and four issuing banks. In addition, the prosecution introduced records of 44 issuing banks that reflected account information of 270 cardholders. There was also testimony from the employees of the banks into which the Appellants deposited the proceeds from their conspiracy and the owners of property on which the fraudulent businesses were located. In addition, Special Agent Judy Sly testified as to the details of her investigation, and the Government introduced evidence seized during the execution of a search warrant at one of the businesses. Finally, the Government produced the testimony of Taiwo Oyewuwo, a.k.a. Adetoye Falusi, a member of the conspiracy who pled guilty and agreed to testify for the Government.