Operation Pepsi Student Loans
This investigation was initiated in 1999 by agents of the Newark Field Office of the FBI, the Immigration and Naturalization Service, the United States Postal Inspection Service, as well as state and local law enforcement agencies. The investigation revealed that fraudulent student loan checks were being obtained by and mailed to individuals located in the Newark metropolitan area. Some of the stolen identities utilized in this scheme were taken from stolen payroll records of Pepsi employees, which were processed by an outside vendor.
A Criminal Enterprise, composed of both Nigerian and Ghanian subjects was linked to 33 fraudulent student loans. This enterprise had applied for fraudulent loans totaling nearly $700,000. All 33 loans were requested from Norwest Bank of South Dakota and managed for Norwest Bank by Servus Financial Corporation. Subjects of this criminal enterprise requested loan applications over the phone and then would mail the completed loan application and supporting documents back to Servus Financial Corporation.
Twenty-three of the applications using stolen identities were successful in obtaining loans. Of these 23 loans issued, ten used the identities of Pepsi employees. The investigation found that the group had acquired microfilm of Pepsi employees' records. The subjects were using the microfilm to obtain the employees' identifying information needed to complete the loan applications.
Over 70 different identities were used during this fraudulent operation. Once a loan application was requested, a member of the organization would produce supporting documents to be mailed back with the application. The documents included false W2 forms, pay stubs, driver's licenses, and class schedules. Many of the false documents were produced on a personal computer located at the residence of one of the members of the enterprise.
Once the loans were approved, the checks would be mailed to addresses prearranged by members of the group. Twenty-nine different addresses were used. The addresses used by the subjects included individual houses, mail boxes, vacant apartments, and businesses. Once the checks were received, the group leaders recruited additional members to cash the checks. The checks were deposited into personal checking accounts, some of which were opened with stolen identities and some using the actual name of the recruited individuals. The checks were cashed in ten different banks located in New Jersey, New York, Virginia, Florida, and Massachusetts.
Six of the leaders of this criminal enterprise were indicted and four have been convicted. One of the subjects is believed to be hiding in West Africa.
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