New Anti-Fraud Program Launched in Georgia

Aim is to Protect Consumers and Financial Institutions from Fake Check Scams
Today, the Georgia Governor’s Office of Consumer Affairs, Consumer Federation of America (CFA), the Georgia Bankers Association, and Georgia Credit Union Affiliates are announcing the start of a new and innovative program to protect consumers and financial institutions from fake check scams. Under the program, participating banks and credit unions will hand a brochure created by CFA, “Don’t Become a Target,” to every consumer who comes in to deposit checks or money orders of $1,000 or more or to withdraw $1,000 or more. Nearly 60 banks and credit unions in Georgia have signed up to participate. “The key is to prevent consumers from being victimized by educating them about these scams at the very point where they may be at risk,” said Susan Grant, CFA’s Director of Consumer Protection, who is coordinating the program. “We’re pleased to have such a great response from financial institutions in Georgia.”

In fake check scams, the consumer receives a genuine-looking check or money order for something and is asked to wire money somewhere in return. For instance, the check may be described as an “advance” on millions that the consumer has won in a sweepstakes or lottery. The consumer is instructed to send money to pay the taxes and claim the rest of the prize. In another popular scenario, the consumer is recruited to work at home as a “mystery shopper” or processing payments for a company and is instructed to send money somewhere as part of the job. No matter the story, the check or money order is phony, and when it bounces, the victim owes the money back to the financial institution where it was deposited or cashed. The average loss is $3,000 to $4,000. “It’s impossible to detect these counterfeits just by looking at them,” said Joseph B. Doyle, Administrator of the Governor’s Office of Consumer Affairs. “The message that we want to give consumers is that there is no legitimate reason why anyone who wants to give them money would ask them to send money anywhere in return. If that’s the deal, it’s a scam.”

Federal law gives consumers the right to access their funds quickly, usually within a day or two. But it is often difficult or impossible for the consumer’s financial institution to tell if there is a problem with a check or money order until it goes through the system to the person or company that supposedly issued it. That can take several days or weeks. “These crooks take advantage of the trust that the financial system is built on,” said Joe Brannen, president and CEO of the Georgia Bankers Association. “This campaign is a service to help consumers understand they are responsible for the checks and money orders they deposit or cash because they are in the best position to know if the people who gave them to them are trustworthy.”

“Fake check scams are a serious problem for consumers. Credit unions want to do all they can to educate their members. That’s why we’re excited to be a partner in this consumer education program,” said Cindy Connelly, senior vice president of association services for Georgia Credit Union Affiliates “Consumers and credit union personnel need to be able to recognize the warning signs of fraud in order to prevent it.”

CFA is providing the brochure to participating banks and credit unions at no cost (CFA is asking them to cover the shipping expense if they are able to do so). To help the financial institutions prepare for the project, CFA gave them training materials about fake check scams and advice about handing out the brochures. In addition to the hard-copy brochure, which is English on one half and Spanish on the other, there are two electronic versions, one in English and the other in Spanish, on CFA’s Web site at www.consumerfed.org/fakecheckscams. There visitors will also find a new PowerPoint presentation that CFA has created for consumers and other educational materials about fake check scams.

Quantities of the brochure will also be available to government agencies in Georgia such as the Governor’s Office of Consumer Affairs and nonprofit organizations that conduct consumer education in the state. CFA is not offering hard-copies of the brochure directly to consumers.

Georgia is one of several states in which CFA will be conducting this project to fight fake check scams over the next several months. Participating financial institutions in Georgia are listed below. Banks and credit unions in Georgia that have not yet signed up to participate are welcome to do so and should contact Susan Grant at CFA, 202-939-1003.

“Crown Royal Bandit” Sentenced to Over 100 Years in Jail

BRUCE ALLEN HUGHES, 48, of Blairsville, Georgia, was sentenced February 1 by United States District Judge Richard W. Story to serve 127 years in federal prison on charges of conspiracy to commit the armed robbery of 29 banks over 11 years, five counts of armed bank robbery, six counts of using a firearm during the commission of a violent felony, and one count of possession of a firearm by a convicted felon.

Acting United States Attorney Sally Quillian Yates said of today’s sentence, “This defendant victimized unsuspecting customers and employees of dozens of banks over the course of a decade. Today’s sentence effectively and justly ends the reign of terror of the Crown Royal Bandit, leaving him to spend the rest of his days behind bars.”

HUGHES was sentenced to 127 years in prison to be followed by five years of supervised release, and ordered to pay restitution in the amount of approximately $300,000. HUGHES pleaded guilty to the charges on August 21, 2009.

According to Acting United States Attorney Yates, the charges and other information presented in court: HUGHES pleaded guilty to charges related to armed bank robberies that occurred between May 7, 1997, and February 21, 2008, in the Northern and Middle Districts of Georgia. HUGHES, who was also known as “Brian Scott Hughes,” “Bruce Alan Hughes,” and “Bruce Allen Hughes,” participated in 29 armed bank robberies, many of which involved the use of a mask and the display of a gun, which was fired during two of the bank robberies.

The FBI and other agencies referred to the string of robberies as having been committed by the “Crown Royal Bandit” because in the first few bank robberies the robber used purple “Crown Royal” liquor bags to collect the cash. The charges also included one robbery and use of a firearm during the commission of a violent felony in the Middle District of Georgia (Athens). In total, HUGHES stole over $300,000 in the robberies.

HUGHES was charged in a second superseding indictment in the Northern District of Georgia in June 2009 on two counts of conspiracy to commit armed bank robberies, four counts of armed bank robbery, five counts of use of a firearm during the commission of a violent felony, and one count of possession of a firearm by a convicted felon. Today, he was sentenced for all of those charges after pleading guilty in August 2009.

This case was investigated by Special Agents of the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Significant assistance in this case was provided by the Athens-Clarke County Police Department, the Banks County Sheriff’s Department, the Fannin County Sheriff’s Department, and the Madison County Sheriff’s Department.

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“Crown Royal Bandit” Pleads Guilty

BRUCE ALLEN HUGHES, 48, of Blairsville, Georgia, pleaded guilty this morning in federal district court to two counts of conspiracy to commit the armed robbery of 29 banks over 11 years, five counts of armed bank robbery, six counts of use of a firearm during the commission of a violent felony, and possession of a firearm by a convicted felon.

United States Attorney David E. Nahmias said, “Today’s guilty plea will lead to a life sentence for one of the most prolific armed bank robbers ever to plague the citizens of Georgia. Never again will this violent criminal terrorize another teller or customer as he did over the last decade. Thanks to literally years of exhaustive investigation, the reign of the Crown Royal Bandit is over.”

FBI Atlanta Special Agent in Charge Greg Jones said, “The FBI is very pleased to close its case on the Crown Royal Bandit. The law enforcement resources expended on this investigation by the Atlanta FBI's Violent Crimes Squad were a necessary burden. The many bank employees and customers that bore the brunt emotionally of this defendant’s robberies can take some measure of satisfaction that he will now be off the streets and that the FBI stayed the course in the pursuit of justice.”

According to United States Attorney Nahmias and the information presented in court: HUGHES pleaded guilty to charges related to armed bank robberies that occurred between May 7, 1997, and February 21, 2008, in the Northern and Middle Districts of Georgia. HUGHES, who was also known as “Brian Scott Hughes,” “Bruce Alan Hughes,” and “Bruce Allen Hughes,” participated in 29 armed bank robberies, many of which involved the use of a mask and the display of a gun, which was fired during two of the bank robberies. The FBI and other agencies referred to the string of robberies as having been committed by the “Crown Royal Bandit” because in the first few bank robberies the robber used purple “Crown Royal” liquor bags to collect the cash. The charges include one robbery, and a charge of use of a firearm during the commission of a violent felony in the Middle District of Georgia (Athens). HUGHES stole a total of over $300,000 in the robberies.

HUGHES was charged in a second superseding indictment in the Northern District of Georgia in June of 2009 on two counts of conspiracy to commit armed bank robberies, four counts of armed bank robbery, five counts of use of a firearm during the commission of a violent felony, and one count of possession of a firearm by a convicted felon. Today, he pleaded guilty to all of the charges in both Districts. He could receive a maximum sentence of life plus 175 years in prison, with a mandatory minimum of 147 years in prison and a fine of up to $3,500,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

A sentencing date for HUGHES has not yet been set before United States District Judge Richard W. Story.

This case is being investigated by Special Agents of the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Significant assistance in this case has been provided by the Athens-Clarke County Police Department, the Banks County Sheriff’s Department, the Fannin County Sheriff’s Department and the Madison County Sheriff’s Department.

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First Guilty Plea Related to Fraudulent Loans Funded by Failed Bank

MARK ANTHONY MCBRIDE, 43, a/k/a “Charles Conley,” “Charles Conley, Jr.,” and “Manuel Evans,” of East Point, Georgia, pleaded guilty April 24 in federal district court to a conspiracy to obtain millions of dollars in fraudulent mortgages and other loans and to a bankruptcy fraud designed to stay foreclosures on dozens of fraudulently obtained properties.

United States Attorney David E. Nahmias said, “We are moving with dispatch to review bank failures and to investigate and prosecute any frauds we find that were related to failed banks. This case is disturbing because dozens of banks, including the now-failed Omni National Bank, were damaged by this defendant's long-running conspiracy. Moreover, the U.S. Bankruptcy Courts in three states were abused by the defendant's eight fraudulent bankruptcy filings designed to delay property foreclosures and collection of scheme proceeds by his debtors.”

FDIC Office of Inspector General Special Agent in Charge, Southeast Region, C. Ed Slagle said, “It is a priority of the FDIC Office of Inspector General to investigate and assist the United States Attorneys' Offices in prosecuting offenses which relate or contribute to the failure of so many financial institutions.”

Martin D. Phanco, Inspector in Charge, U. S. Postal Inspection Service in Atlanta, said, “The U.S. Postal Inspection Service found this case to be especially disturbing due in part to the illegal use of the U. S. mails in furtherance of their fraudulent scheme; which, has ultimately led to the failure of so many banks. This overt criminal act is a prime example of the type of rampant financial fraud that currently exists within our society, and has subsequently contributed to the failure of the nation's economy. Make no mistake, this will not be tolerated or accepted by the American public nor the U.S. Postal Inspection Service.”

According to United States Attorney Nahmias and the information presented in court: In 2001, immediately after being released from prison, MCBRIDE began a mortgage fraud scheme that continued through 2002, when he had to report for service of another federal prison sentence. As soon as he was released again from prison in November 2006, MCBRIDE continued his fraud by completing fraudulent mortgage loans, vehicle loans, lines of credit, credit cards and other extensions of credit in his name, in his aliases, in a number of stolen identities, including those of his children, and in the identities of other unqualified borrowers. These fraudulent loans continued until MCBRIDE was arrested in September 2008 for violating his supervised release. Dozens of banks and other lenders, including the recently failed Omni National Bank, funded fraudulent loans for MCBRIDE.

MCBRIDE generated mortgage loan proceeds for himself using inflated valuations for properties, securing the loans and sharing those proceeds with his straw borrowers and other conspirators. He was able to retain proceeds from the frauds by filing eight bankruptcy cases in Georgia, Alabama and South Carolina. The last such fraudulent filing was a May 2008 petition in Atlanta, filed in a bogus name and stolen Social Security Number. The petition falsely stated he had never filed bankruptcy in the past.

MCBRIDE was charged in a two-count Criminal Information filed today. The Information charged MCBRIDE with a conspiracy which encompasses the 10-year long fraud scheme and with one count of bankruptcy fraud. He pleaded guilty to those charges today. He could receive a maximum sentence of 35 years in prison and a fine of up to $1,250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Sentencing is scheduled for July 9, 2009, at 10 a.m., before United States District Judge Jack T. Camp.

This case is being investigated by the recently formed Northern District of Georgia Mortgage Fraud Task Force, comprised in this case of the U. S. Postal Inspection Service, HUD OIG, FDIC OIG and FBI, and assisted by the Office of the U.S. Bankruptcy Trustee.

Assistant United States Attorneys Gale McKenzie and Chris Bly are prosecuting the case.

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