Four Army National Guardsmen Indicted

   5/28/2016 - Greenbelt, Maryland – Three guardsmen from the District of Columbia Army National Guard have been indicted on charges arising from a scheme to use Bitcoin to buy stolen credit and debit card numbers from foreign websites, re-encode cards issued in their names with those stolen numbers, and then fraudulently purchase items at Army and Air Force Exchange Service (AAFES) stores on military bases and elsewhere for use and resale (Shelton Stewart Indictment). Those indicted included Derrick K. Shelton, II, 28, of Washington, D.C.; James C. Stewart, III, (J. Stewart) 25, of District Heights, Maryland; and Quentin T. Stewart, 28, of Parkville, Maryland.
   A fourth national guardsman, Vincent Anthony Grant, 27, of Laurel, Maryland was also indicted in a separate case involving a similar fraud scheme (Grant Indictment). The indictments were returned on May 9 and unsealed on May 20 following the arrests of the defendants.
   The indictments were announced by United States Attorney for the District of Maryland Rod J. Rosenstein, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office (DCIS); and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
   Shelton, J. Stewart and Grant were specialists, and Q. Stewart was a former sergeant, all in the District of Columbia Army National Guard.
   “Bitcoin” is a digital currency that operates through an online, decentralized ledger system. Bitcoin is not issued by any government, bank, or company, but rather is generated and controlled through computer software operating through a decentralized network. Bitcoin can be exchanged for other currencies, products, or services.
   The Shelton Stewart Indictment alleges that from July 2014 to May 2015, Shelton, J. Stewart and Q. Stewart, along with co-conspirator Jamal Moody and others, used Bitcoin to purchase stolen credit and debit card numbers of individuals and businesses from foreign internet websites. They selected and purchased stolen credit and debit card numbers of individuals and businesses holding federal credit union accounts, and those with billing addresses in or near Maryland. They bought magnetic strip card-encoding devices and software to re-encode credit, debit and other cards with the stolen credit and debit card numbers.
   According to the Shelton Stewart Indictment, the defendants used the cards they fraudulently re-encoded to buy merchandise, including gift cards, electronic items, and luxury goods, from AAFES stores on U.S. military bases, and other locations in Maryland and elsewhere. They used the merchandise themselves or resold the merchandise.
   The Grant Indictment alleges that from July 2014 to April 2015, Grant, along with co-conspirator Moody and others, engaged in a scheme similar to the one described above.
   Shelton, J. Stewart and Q. Stewart face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and wire fraud. Grant faces a maximum sentence of seven and half in prison for conspiring to commit access device fraud. All four defendants also face a mandatory minimum of two years in prison for aggravated identity theft, consecutive to any other sentence imposed. The defendants had their initial appearances last week and were released under pretrial supervision, except for Quentin Stewart who is scheduled to have a detention hearing tomorrow, May 24, 2016, at noon before U.S. Magistrate Judge Charles B. Day in U.S. District Court in Greenbelt.
   An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
   In a separate proceeding, Jamal Alexander Moody, age 28, of Oxon Hill, Maryland, and Waynesboro, Pennsylvania, who was also a specialist in the District of Columbia Army National Guard, pleaded guilty to conspiring to commit access device fraud and aggravated identity theft. Moody admitted that from July 2014 to April 2015, he purchased a magnetic-strip card-encoding device which he used to re-encode credit and debit cards issued in his name with more than 100 stolen credit and debit card numbers of other individuals that he purchased through Bitcoin transactions. Moody used the fraudulently re-encoded cards to purchase – often from AAFES stores - gift cards or electronic and luxury goods for resale. Moody is awaiting sentencing.
   The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
   Source: Financial Fraud Enforcement Task Force

Photo by Steve Rensberry (c) 2014