Florida Man Pleads Guilty in Fraud Scheme related to the Processing of Credit Card Payments
PITTSBURGH – A resident of Parkland, Florida, pleaded guilty in federal court to a charge of conspiracy to commit Bank Fraud, Mail Fraud and Wire Fraud, United States Attorney Scott W. Brady announced today.
Garri Shihman, 45, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Shihman participated a complex matter has two primary components. The first component is related to the illegal on-line sale of pharmaceutical drugs to U.S. consumers from a host of websites located primarily in India. The second component relates to the fraudulent processing of credit card payments for these pharmaceutical drugs and other products. Shihman is only directly associated with the second component.
The fraud involves use of a series of misrepresentations that cause credit card companies to process credit card transactions for various illegal activities. Credit card companies have policies that preclude the use of their products and services to pay for these type of activities, and they have various internal controls designed to prevent the use of their products and services for such activities.
For example, the credit card companies require merchants to apply to use their services, and in the applications, they ask for information about the products or services the company is selling and ask the merchants to provide the website through which the company will sell goods or services. The credit card companies will not open a merchant account if the applicant indicates that they are involved in illegal activities, and the credit card companies check the website to make sure that the applicant is not engaged in illegal activities.
Shihman was involved in a payment processing operation that defrauded the credit card companies through a series of misrepresentations designed to conceal the use of the credit card companies’ products and services to process payments for illegal activities. The complex fraud involved front companies, fraudulent applications, a phone bank, and various other aspects.
The agents, beginning with the undercover purchases of the pharmaceutical drugs, began to unravel this scheme through dozens of search warrants for e-mail accounts, subpoenas, and interviews. Those investigative efforts ultimately led to the execution of a search warrant at Shihman’s business located in Brooklyn, New York. The search warrant revealed of evidence implicating Shihman and others in the fraudulent scheme outlined above.
Judge Cercone scheduled sentencing for July 26, 2019. The law provides for a total sentence of thirty years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The conducted the investigation that led to the prosecution of Garri Shihman.