Wednesday, July 18, 2012

Conspirator Sentenced in Scheme to Fraudulently Obtain Over $1.399 Million from Baltimore Housing Authority Account

U.S. District Judge William D. Quarles, Jr. sentenced Keith Eugene Daughtry, age 50, of Washington, D.C., today to 41 months in prison followed by five years of supervised release for conspiring to commit bank fraud in connection with a scheme to steal over $1.399 million from a Baltimore Housing Authority (BHA) bank account in just a few months. Judge Quarles also entered an order requiring Daughtry to forfeit and pay restitution of $1,399,700.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.

According to his guilty plea, Daughtry agreed to provide his identity in a scheme to steal money from the BHA. In May 2010, co-defendant William Darden used Daughtry’s identity to obtain a fraudulent driver’s license in Daughtry’s name but bearing the co-conspirator’s photograph. The fraudulent driver’s license was made so that if law enforcement were to locate Daughtry through the fraudulent license’s use, Daughtry could claim that his identity had been stolen.

On May 25, 2010, Darden used the fraudulent driver’s license to open a bank account for an entity called Keith Daughtry Contracting LLC. Shortly thereafter, substantial amounts of funds illegally diverted by Daughtry’s conspirators from a BHA bank account were electronically transferred into the Daughtry LLC bank account, even though Daughtry LLC had never provided any services to the BHA requiring compensation. Investigators have determined that the conspirators were responsible for transferring at least $1,399,700 stolen from BHA’s account into Daughtry LLC’s account between July and September 2010.

The conspirators then drained the stolen funds from Daughtry LLC’s account by electronic transfers of funds onto debit cards in other individuals’ names, at least one of whose identity had been stolen; electronic transfers into accounts at other banks; and through in-person cash withdrawals from Daughtry LLC bank accounts and from ATMs in the Washington, D.C. area. Daughtry himself withdrew $38,550 from the fraudulent Daughtry LLC account from August 17 to September 9, 2010.

Daughtry admits that he is responsible for over $1 million in losses as a result of his participation in the conspiracy.

William Darden pleaded guilty to his role in the scheme and is awaiting sentencing.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein thanked the FBI for its work in the investigation and praised Assistant U.S. Attorneys Sujit Raman and Gregory R. Bockin, who prosecuted the case.

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