What began three years ago when a patrol officer flagged a voided transaction at Southdale mall culminated Monday with long sentences for two kingpins of a $50 million bank-fraud conspiracy that bilked 11 major financial institutions and stole the identities of 8,700 people worldwide.
Chief U.S. District Judge Michael J. Davis called the coast-to-coast identity-theft ring that involved a network of bank insiders "one of the largest frauds I've ever seen." The 27-year sentence he gave ringleader Julian Okeayainneh, 44, in the Minneapolis courtroom punctuated a no-tolerance attitude that federal officials adopted in this case.
Twenty-seven ring members had been federally prosecuted before Davis sentenced co-conspirator Olugbenga Adeniran, 36, earlier Monday to more than 22 years in prison. It was Adeniran, of New York, who prosecutors say directed operations, routinely traveling to Minnesota to obtain cash from banks and buy merchandise from the Mall of America and Southdale with phony credit cards.
"As part of this conspiracy, crooked bank insiders bartered the personal financial information of their patrons," said U.S. Attorney B. Todd Jones. "This violation of trust clearly threatens the confidence the public has traditionally placed on financial institutions and cannot be tolerated.
"Today's sentences send a clear message to those identity thieves and fraudsters who conspire with dishonest bank employees to wreak havoc on the personal finances of innocent customers," Jones said.
Innocent customers included at least 137 Minnesotans whose addresses were found in a California storage locker, apparently controlled by Okeayainneh, of Colton, Calif. Federal officials say 500 individuals are known to have been victimized. But 8,700 personal identifications were found in that storage locker -- along with commercial checks worth a face value of $18.5 million and 140 passport photos.
A peek into that locker, courtesy of exhibits shown in court by federal prosecutor Ann Anaya, found 27 identification cards or phony driver's licenses from several states, each carrying Okeayainneh's likeness but other people's information. The fake ID cards were often printed within an hour of gaining someone else's personal information, Anaya told the court.
It was a rejected 2009 transaction at Southdale that drew the attention of a plainclothes Edina patrolman, said Edina Police Chief Jeff Long. The Minnesota Financial Crimes Task Force, a joint operation of federal, state and local law enforcement, discovered many victims from within the state, Anaya said.
"We worked backwards from the arrests in Southdale," she said. "Then we adopted a case out of Wisconsin. Then another in Iowa. We realized that this was far more widespread than we first imagined and that it had been going on for a while."
In addition to Minnesota, authorities say, the conspiracy ran operations out of California, New York, Texas, Massachusetts and Arizona, beginning in 2006. Financial institutions victimized included American Express, Associated Bank, Bank of America, Capital One, Guaranty Bank, JPMorgan Chase & Co., TCF Bank, US Bancorp, Wachovia Bank, Washington Mutual and Wells Fargo Bank.
It ended last year, when Okeayainneh and Adeniran were indicted. Okeayainneh was convicted in February of bank-fraud conspiracy, bank fraud, mail fraud, wire fraud, aggravated identity theft and money-laundering conspiracy. Adeniran was convicted the same day of bank-fraud conspiracy, bank fraud and aggravated identity theft.
"The sophisticated means used and the use of bank insiders in this fraud is troubling to the court," Davis said before sentencing Okeayainneh.
"It's a sad day that I have to send someone to prison for such a long time," the judge told Okeayainneh. "But you deserve the sentence you receive."
Staff writer Paul Walsh contributed to this report. Paul Levy 612-673-4419