NORTH BERGEN -- North Bergen resident Khaddy Garcia was sentenced to 10 years in prison last week after he pleaded guilty in May to $3.5 million in fraud. According to a press release, U.S. Attorney Preet Bharara announced Garcia’s sentence on Tuesday, Oct. 9. In May, he pleaded guilty in Manhattan federal court to one count of bank fraud and one count of wire fraud.
According to a release, Garcia contacted customer service representatives from various banks by phone between February 2011 and January 2012. He would pose as the owner or agent of a business with an account that belonged to the bank, claiming that he forgot the information needed to access his bank account online. His goal was to obtain login information from the account he was calling about.
Garcia attempted to withdraw funds from various bank accounts with a second scheme to have a venture capital fund wire $2 million to an account that was Garcia’s. According to the press release, his sentence was made in Manhattan federal court by by U.S. District Judge Katherine Forrest.
“Khaddy Garcia employed a low-tech scheme of trickery and deceit in his attempts to commit a high-tech fraud,” said Manhattan U.S. Attorney Preet Bharara. “Fortunately, he was not able to do tremendous damage before he was caught, and he will now be punished.”
The press release indicates that once Garcia was able to obtain the information, he would withdraw funds from the compromised account using either checks or wire transfers to himself. He would also send funds to his co-conspirators. According to the press release, his use of fraud schemes led to him accessing more than 20 different bank accounts that he attempted to withdraw over $1.5 million and was successful in his withdrawal of over $200,000.
Garcia also had a separate scheme to defraud a venture capital firm located in New York of $2 million. He made numerous phone calls to the owner and agents of the firm falsely posing as a representative of the Clearing Firm which was the bank for the venture capital firm. He claimed that $2 million were deposited into the wrong account at the Clearing Firm and they needed to be re-wired to a different account which he controlled. Before any funds were transferred the fraud was discovered.
According to the press release, Judge Forrest also sentenced Garcia to five years of supervised release and ordered him to pay over $200,000 in restitution as well as forfeiture.
“This is theft no matter how sophisticated it may be,” said Judge Forrest during sentencing. “No matter the fact that it was over the telephone or in some instances using the Internet, it is theft. It is 21st century theft, but theft nonetheless.”