Straw Buyers not limited to Mortgage Fraud

Federal authorizes in Denver Colorado have uncovered a extremely elaborate organized crime ring that has cost banks around the United State approximately eighty million dollars.

Documents filed in the United States District court of Denver state that the ring recruited about seven hundred immigrants from the former Soviet Union to knowingly defraud banks and creditors. The ring hired immigrants to be Straw buyers or pawns in what is called on the streets as a “bust out” scheme. The straw buyers or pawns use the identity and credit lines of business to obtain loans by an otherwise creditworthy borrower but have no intention of repaying the loans or credit obtained.

Federal authorizes have taken two such straw buyers into custody in the past week and have identified sixteen other individuals but are aware and working on charges for over seven hundred.

The most common scheme for this ring involved the completion of fraudulent loan applications. Nadezda Nikitina, 23, formerly of the Soviet Union after legally entering the United States in April 2007 on a K-1 visa applied for a credit card application that she completed on line. She stated on the application that she had been employed by her employer for over five years and had an income of one hundred eighty thousand dollars a year. Citibank issued her the credit card with a limit of twenty five hundred dollars.

Nikitina then took five cash advances on the credit card for five thousand each.  Nikitina then waiting a few weeks and sent a payment for twenty five thousand to Citibank and Citibank raised the limit on credit card. However, the payment for twenty five thousand came back as insufficient funds and in the mean time Nikitina had already pulled more cash advances off the credit card. The total loss to Citibank was calculated to over sixty nine thousand dollars.

Nikitina and Natallia Vishnevskaya, 26, formerly of the Soviet Union, are both in custody and are schedule to appear in court on August 19th. They are both charged with one count of bank fraud and one count of submitting fraudulent applications. Two other were also taken into custody but where later taken to a medical facility.

The ring as had schemes that involved “shell companies” that served the purpose of becoming an authorized credit card processor. The shell companies allowed the ring to directly charge credit cards held by the straw buyers. The ring in addition to this scheme also had straw buyers refinancing vehicles loans. The owner would apply for several loans on one vehicle from different banks.

The Federal Bureau of Investigation has served warrants for dozen of locations including personal residences, auto dealerships and other business across the country.