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Federal authorities on Tuesday announced charges against 18 people in an alleged international credit card scam that officials say stole at least $200 million

(Photo by AFP/Getty Images)

NEWARK — Seven thousand fake identities created. Eighteen hundred phony mailing addresses used.

Twenty-five thousand credit cards fraudulently secured.

Two hundred million dollars in losses … and counting.

What could be one of the largest credit card-fraud cases ever brought by the U.S. Department of Justice was unveiled today as 18 defendants were charged with bank fraud conspiracy in a federal complaint unsealed in Newark, officials said.

"Today’s (criminal) complaint highlights the activity of an extensive, sophisticated, organized scheme, executed against U.S. financial institutions, which, in turn, affects every citizen of the United States," said David Velazquez, the acting head of the Newark-based arm of the FBI. "This elaborate network utilized thousands of false identities, fraudulent bank accounts, fake companies, and collusive merchants to defraud financial institutions of hundreds of millions of dollars in order to facilitate extravagant lifestyles they could otherwise not afford."

Defendants allegedly wired millions of dollars to Pakistan, India, the United Arab Emirates, China, Romania, Japan and Canada after the scam began in 2003. At the same time, some defendants stockpiled mounds of cash and gold, the complaint said, including one person who allegedly hoarded $68,000 in cash in his Jersey City stove.

According to the complaint and officials, most of the 18 defendants have ethnic ties to Pakistan. Six of them live in New Jersey (including four in Iselin); one in Philadelphia, and the rest in New York. Some of the defendants may be related, officials also said, while adding that the entire scheme had strong ties to Jersey City — including to three jewelry stores on Newark Avenue named Ashu Jewels, Tanishq Jewels and Raja Jewels.

Three of four defendants charged in earlier complaints connected to the fraud have pleaded guilty, authorities said. And those charged today were said to be "the top members of the Fraud Enterprise." Officials also said that others involved in the scheme could still be charged.

Meanwhile, the names of the credit card companies were not disclosed.

Babar Quereshi, 59, of Iselin, and Muhammad Shafiq, 38, of Bellerose, N.Y, are alleged in the 14-page criminal complaint to be the leaders of the fraud that officials say spanned at least 28 states and eight countries.

Many of the defendants, according to the complaint, were not employed during the last five years, yet some still managed to buy luxury automobiles, electronics, spa treatments, expensive clothing and millions of dollars in gold in recent years.

Quereshi alone made a wire transfer of $500,000 last September — and more than $1 million has flowed through one of many personal bank accounts since 2005, the complaint alleges.

At a late-morning news conference led by U.S. Attorney Paul Fishman, Velazquez and other officials, Fishman detailed a complex scheme that featured a combination of identity theft and credit card fraud that was pulled off with great precision.

Fishman and the complaint detailed a scheme in which the defendants used sophisticated methods — including coming up with fake driver’s licenses and creating phony utility bills — to fabricate identities that allowed them to get credits cards in the names of people who sometimes did not exist.

Members of the ring would later doctor credit reports to pump up the spending and borrowing power associated with the credit cards, authorities said.

READ THE FULL COMPLAINT

In a further step, members of the group would borrow or spend as much as they could based on their fraudulently obtained credit history and not repay the debts, thereby looting businesses and financial institutions of more than $200 million, authorities said.

The U.S. attorney explained that in the identity theft part of the scheme, conspirators sometimes used the names and information of real people who had left the United States and were willing to sell their identities. Several of the conspirators were accomplished fake ID makers, and made hundreds of driver’s licenses and Social Security cards, he added.

Fishman also explained that in "pumping up" the credit card limits, conspirators would sometimes make small charges on cards, then pay those charges on time — raising the limit by acting as responsible customers. In other instances, he said, the conspirators boosted credit worthiness for their false identities. In this new, sophisticated method of fraud, accomplices would report phony debts on the credit reports that went with the fake identities; and soon, they would then remove the debts from those same credit reports, Fishman said.

It was a clever scheme, he added — the conspirators make it look like the false identities have incurred, and then paid back, significant debts, and so their credit scores increase.

During the afternoon today, many of the defendants, all of whom face a maximum of 30 years in prison if convicted, and a $1 million fine — sat in handcuffs with glum and tired expressions on their faces. Many had been awoken before dawn in their homes, and their upset-looking relatives and friends filled up nearly half of U.S. Magistrate Judge Madeline Cox Arleo’s courtroom.

Angelo Servidio, a defense attorney to 74-year-old Tarsem Lal, said outside the courtroom: "Even though the case itself is purported to be the biggest fraud case ever by the U.S. Attorney’s Office, it really doesn’t mean that my client is responsible; and at the same time, some of the other (defendants) ... their involvement may be limited," if such involvement is proven.

Star-Ledger staff writer James Queally contributed to this report.

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