20th guilty plea in $200M credit card scam in NJ

TRENTON — With the guilty plea of a New York man for conspiracy to commit bank fraud, nearly two dozen people have admitted to various roles in a scam that netted the conspirators more than $200 million in bogus expenses and purchases.

Habib Chaudhry, 49, of Valley Stream, New York, pleaded guilty on Tuesday. New Jersey's Acting U.S. Attorney William E. Fitzpatrick said Chaudhry had initially been charged in February 2013 but had been a fugitive until he was arrested in January of this year.

Fitzpatrick said the scam Chaudhry was involved in was a three-step process that included making fake identities, building up credit ratings for the identities and then borrowing or spending on the credit earned without repayment. He said before they were caught, the conspirators had caused more than $200 million in confirmed losses to businesses and other institutions.

Fitzpatrick said the conspirators created more than 1,800 "drop addresses" which he said included homes and post office boxes. On Tuesday, Chaudhry admitted to obtaining the fraudulent credit cards and having them sent to various addresses. He would then use the cards to make purchases "with no intention of paying back the debts."

Chaudhry faces a maximum penalty of 30 years in prison and a fine of either $1 million or twice the gross gain or loss from the offense. He is scheduled to be sentenced on Sept. 20.

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Contact reporter Adam Hochron at 609-359-5326 or Adam.Hochron@townsquaremedia.com