Damian Williams, the United States Attorney for the Southern District of New York, Daniel B. Brubaker, Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), J. Russell George, the Treasury Inspector General for Tax Administration (“TIGTA”), Francis J. Russo, the Director of the New York Field Office of U.S. Customs and Border Protection (“CBP”), and Ivan J. Arvelo, Special Agent in Charge for Homeland Security Investigations ("HSI") New York, announced the unsealing of a seven-count Complaint charging seven participants in an identity theft and fraud scheme, through which they are alleged to have stolen at least $1 million from victims’ bank accounts. Six of the seven defendants were arrested in Georgia, Florida, and Illinois. GILBERT HUERTAS, a/k/a “Bully,” and ANAYDA HUERTAS were presented in federal court in the Middle District of Florida. CHRISTOPHER PEEPLES, a/k/a “Jerry Chen,” a/k/a “Reginald Griffin,” a/k/a “Charles Richardson,” a/k/a “Robert Wolff,” and MALCOLM REASONOVER, a/k/a “Uncle,” were presented in federal court in the Northern District of Illinois, and DEMETRIUS TORRY, a/k/a “Meechie,” will be presented in the Northern District of Illinois. KHALIL BEY-MUHAMMAD will be presented in federal court in the Northern District of Georgia. GERALD LEE, a/k/a “Pimp,” remains at large.
U.S. Attorney Damian Williams said: “These defendants allegedly developed a sophisticated scheme to steal money from innocent victims’ bank accounts. The defendants allegedly stole victims’ identities, hijacked their bank accounts and cellphones, brazenly impersonated them at bank branches throughout the country, and drained their accounts. Thanks to our partners at USPIS, TIGTA, CBP, and HSI, the defendants’ alleged crimes have been brought to a halt.”
USPIS Inspector in Charge Daniel B. Brubaker said: “Peeples allegedly led a crew that perpetrated a complex, multi-state fraudulent scheme that involved identity theft and bank account takeovers. But today, Peeples and the alleged actions of his co-conspirators are leading them all straight to federal court. These alleged criminals are charged with draining their victims’ accounts of a fortune. In some cases, allegedly stealing tens of thousands of dollars at a time. As part of the charged scheme, Peeples and his crew allegedly stole the identities of unknowing third parties, to hide their crimes behind the good names of their victims. In total, they allegedly caused at least a $1 million loss, to first the individual victims, and then the banking industry. We hope all the fraudsters out there are listening: if you plan to commit identity theft and bank fraud, Postal Inspectors and our law enforcement partners will use every resource at our disposal to investigate you and bring you to justice – and we are very good at it.”
TIGTA Treasury Inspector General J. Russell George said: “The Treasury Inspector General for Tax Administration is committed to aggressively pursuing those individuals who use Internal Revenue Service systems to facilitate their fraudulent activity. Fraudulent schemes such as this undermine the integrity of tax administration. We would like to thank the United States Postal Inspection Service, Customs and Border Protection, Homeland Security Investigations, and the United States Attorney’s Office for their continued partnership in the pursuit of justice.”
CBP Director Francis J. Russo said: “U.S. Customs and Border Protection is proud to have contributed to this ongoing investigation that resulted in the takedown of an elaborate conspiracy to defraud innocent victims. CBP will continue to collaborate with our law enforcement partners to uncover and dismantle nefarious criminal networks that seek to defraud innocent victims for illicit gain.”
HSI Special Agent in Charge Ivan J. Arvelo said: "As technology has advanced and become part of our everyday lives, fraudsters too have evolved with the times. Instances of internet based identity theft are on the rise and criminal organizations falsely operate under the impression that they are immune from prosecution. These arrests should send a clear message that HSI and our partners will continue to work tirelessly to identify these fraud crews no matter where they may be located and aggressively pursue justice for innocent victims.”
According to the allegations in the Complaint:[1]
Since in or about 2020, law enforcement has been investigating a fraud crew (the “Crew”) led by CHRISTOPHER PEEPLES and whose members also include KHALIL BEY-MUHAMMAD, GERALD LEE, MALCOLM REASONOVER, DEMETRIUS TORRY, GILBERT HUERTAS, and ANAYDA HUERTAS.
From at least 2020 up to and including at least 2022, CHRISTOPHER PEEPLES, and/or KHALIL BEY-MUHAMMAD, purchased or otherwise obtained, through the Internet, personally identifiable and financial information belonging to victims of their scheme. Such information would generally include victims’ names, dates of birth, home addresses, social security numbers, driver’s license numbers, bank account information (sometimes including passwords), and phone numbers (the “Stolen Information”).
Once PEEPLES and/or BEY-MUHAMMAD obtained Stolen Information for a victim, they would provide that information to co-conspirators responsible for forging identification documents (the “ID Forgers”). Using the Stolen Information, the ID Forgers would manufacture a counterfeit driver’s license and sometimes a secondary form of false identification (each a “Fake ID”) in the victim’s identity. If the Fake ID was a form of photo identification, it would bear the photograph of one of the Crew’s members, typically LEE, REASONOVER, or ANAYDA HUERTAS.
In some cases, the Crew would take over the victim’s phone number through a “SIM swap” fraud — that is, by tricking the victim’s cellphone service provider to switch service for the victim’s cellphone number to a SIM card or cellphone controlled by the Crew. Members of the Crew would either impersonate the victim and claim that the victim’s existing cellphone had been lost or would enlist the assistance of corrupt cellphone store employees who would agree to process the SIM swap in exchange for payment. The purpose of the SIM swap was to take control of the victim’s cellphone number in order to gain access to the victim’s bank accounts — for example, to receive two-factor authentication or security text messages intended for the victim.
In some cases, the Crew would use the Stolen Information to log into victims’ online banking profiles, create new accounts in a victim’s name at the banks, and transfer funds from a victim’s existing accounts to the newly created accounts. The purpose of doing so was to divide the victims’ funds among as many bank accounts as possible and steal those funds through smaller withdrawals, which would be less likely to attract scrutiny from individual bank tellers processing single withdrawals in a single account.
Following the preparatory steps described above, the Crew would fly to a city in the United States to fraudulently withdraw funds from victims’ accounts over a period of days. During these trips, a Crew member (the “Runner”) would enter different bank locations impersonating a particular victim. The Runner would bring Fake IDs in the victim’s identity (and bearing a photograph of the Runner). At the teller window, the Runner would request a withdrawal, typically for less than $5,000 at a time to avoid triggering heightened bank scrutiny. In cases in which the Crew also obtained a “SIM-swapped” cellphone, that cellphone could also be used to intercept and impersonate the victim in response to the bank’s identification verification procedures. After a successful withdrawal, the Runner — and any Crew members participating in that trip — would drive to another bank branch location nearby to repeat the process until the victim’s bank accounts were substantially drained of funds. On a given trip, the Crew typically targeted multiple different victims’ accounts and typically stole tens of thousands of dollars or more.
The Crew has stolen at least approximately $1 million from bank accounts belonging to victims.
PEEPLES, 33, of Chicago, Illinois, BEY-MUHAMMAD, 25, of Oswego, Illinois, LEE, 64, of New York, New York, REASONOVER, 56, of Chicago, Illinois, TORRY, 33, of Chicago, Illinois, GILBERT HUERTAS, 28, of Tampa, Florida, and ANAYDA HUERTAS, 51, of Tampa, Florida, are each charged with one count of conspiracy to commit wire and bank fraud, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit access device fraud, which carries a maximum sentence of five years in prison; and one or more counts of aggravated identity theft, which carries a mandatory sentence of two years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by a judge.
Mr. Williams praised the outstanding investigative work of the USPIS, TIGTA, CBP, and Special Agents and Analysts of the United States Attorney’s Office for the Southern District of New York. Mr. Williams also thanked the HSI New York Darkweb and Cryptocurrency Task Force for their assistance in this matter.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Jun Xiang, Matthew R. Shahabian, and Justin Horton are in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
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