Category: Security

Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, announced that BRANDON BECKER, the former CEO of CardReady, LLC (“CardReady”), was sentenced today to seven years in prison for operating a credit card laundering scheme in which BECKER and his co-conspirators stole over $19 million based on false promises that they could reduce thousands of customers’ debt burdens. As part of this scheme, BECKER and his co-conspirators created dozens of sham merchant accounts and false merchant applications, defrauding a credit card processing company and federally insured bank into processing victim payments. BECKER previously pled guilty before U.S. District Judge Loretta A. Preska, who also imposed today’s sentence.

Acting U.S. Attorney Matthew Podolsky said: “Over a two-year period, Brandon Becker and his co-conspirators preyed on nearly 20,000 victims who were trying to reduce their debt burdens. Becker tasked co-conspirators at CardReady to recruit straw owners for shell companies, and deceived credit card payment processors into fraudulently processing more than $19 million in stolen funds. With today’s sentence, Becker faces the consequences of this massive fraud, sending the clear message that corporate executives who facilitate fraud will be held accountable for their crimes.”

According to the Superseding Indictment, court filings, and statements made in Court:

BECKER was the CEO of CardReady, a Los-Angeles based company acting as a sales agent in the credit card processing industry.  As part of its business as a sales agent, CardReady found merchants who wanted credit card processing services, and submitted merchant applications on behalf of those merchants to an Independent Sales Organization (“ISO”), referred to in the Indictment as the “New York ISO.”  The New York ISO then evaluated the merchant applications, and referred acceptable merchant accounts for processing up the chain to Payment Processor-1 and to Bank-1.  Bank-1 and Payment Processor-1, in turn, processed payments to merchants for purchases by customers who had used credit cards.

In or about 2012, BECKER negotiated a deal with co-defendant STEVEN SHORT, the former head of Florida-based E.M. Systems & Services LLC and affiliated companies (collectively, “E.M. Systems”).  Under this deal, CardReady would retain approximately one-third of E.M. Systems’ credit card sale transactions in exchange for providing E.M. Systems access to the credit card processing network.  For roughly the next two years, SHORT and telemarketers working in boiler rooms for E.M. Systems cold-called customers and offered services, including debt consolidation and interest-rate reduction, which were prohibited by the applicable guidelines from Bank-1 and other associated processing entities (the “Guidelines”), and which – as BECKER knew – would produce chargebacks from dissatisfied customers far in excess of the number and rate of chargebacks permitted under the Guidelines.

In securing payment card processing for E.M. Systems, BECKER concealed that E.M. Systems was the true underlying merchant.  Instead, BECKER and his subordinates and co-conspirators, created approximately 26 sham merchant companies, each headed by a “signer” (the “Sham Merchants” and the “Sham Merchant Accounts”).  The 26 signers for the 26 Sham Merchants typically had no business of their own, and lacked knowledge of E.M. Systems’ business.  In return for signing the paperwork provided to them, the signers were paid a nominal fee from CardReady. 

BECKER and his co-conspirators prepared and coordinated fraudulent merchant applications for each of the Sham Merchants, through merchant applications that falsely described the Sham Merchants to make them look like legitimate independent businesses and to make it more likely that the associated Sham Merchant Account would be approved for processing by the New York ISO, Payment Processor-1, and Bank-1.  The merchant application for each Sham Merchant also concealed the Sham Merchant’s true association with E.M. Systems.

By steering E.M. Systems’s payment processing through these Sham Merchant Accounts, BECKER accomplished a number of fraudulent purposes.  First, the use of these Sham Merchant Accounts made it possible for E.M. Systems and other high-risk merchants to conceal their identities from Payment Processor-1 and Bank-1 and to maintain payment card processing.  This was particularly relevant, as Payment Processor-1 repeatedly required CardReady to close individual Sham Merchant Accounts because of excessive chargebacks and reports of sales of prohibited services.  BECKER then caused CardReady to quickly replace the closed Sham Merchant Accounts with new Sham Merchant Accounts, precluding Payment Processor-1 from shutting down its processing of E.M. Systems and other high-risk merchants.  Second, the fraudulent processing scheme enabled E.M. Systems and other high-risk merchants to spread out their charges, refunds, and chargebacks across multiple Sham Merchant Accounts.  This enabled them to evade chargeback monitoring programs operated by Bank-1, Payment Processor-1, and the New York ISO.

BECKER’s use of signers to deceive payment processors was not limited to the E.M. Systems scheme. BECKER and his agents and employees at CardReady systematized the recruitment of over 270 signers and the creation of over 800 Sham Merchant Accounts to be used by more than 30 high risk clients other than E.M. Systems between approximately 2012 and 2016, both before and after the E.M. Systems scheme.

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BECKER, 53, of Los Angeles, California, pled guilty on August 30, 2024, to one count of conspiracy to commit wire fraud and bank fraud.  In addition to the prison sentence, BECKER was sentenced to three years of supervised release and ordered to pay restitution in the amount of $1,910,600.05, and forfeiture of $11,405,964.00.

STEVEN SHORT, 48, of Tampa, Florida, pled guilty on August 16, 2022, to one count of conspiracy to commit wire fraud and bank fraud.  On May 2, 2023, SHORT was sentenced to 78 months in prison and three years of supervised release and ordered to pay restitution in the amount of $1,910,600.05 and forfeiture of $8,833,889.69.

Mr. Podolsky praised the work of the Federal Bureau of Investigation and thanked the Federal Trade Commission for its assistance.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Vladislav Vainberg and Timothy Capozzi are in charge of the prosecution.

Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, and Christopher G. Raia, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging RANDY MILLER, former Chairman and President of Legacy Sports, and his son, CHAD MILLER, former CEO of Legacy Sports, with engaging in a scheme to defraud investors of more than $280 million in two municipal bond offerings. RANDY MILLER and CHAD MILLER were arrested today and will be presented tomorrow in the U.S. District Court for the District of Arizona. The case has been assigned to U.S. District Judge Lewis A. Kaplan. 

Acting U.S. Attorney Matthew Podolsky said: “As alleged, Randy Miller and Chad Miller swindled investors out of over a quarter of a billion dollars by selling municipal bonds they knew were backed by forgeries and lies. Municipal bonds fund critical public projects and investors rely on accurate financial disclosures to make informed decisions. This Office is committed to protecting the integrity of the public finance system. When individuals abuse that system and investors’ trust, we will hold them accountable.”

FBI Assistant Director in Charge Christopher G. Raia said: “Fathers and sons have found shared bonds in sports for generation. Randy and Chad Miller allegedly chose to use a planned sports complex as a means to exploit and defraud investors.  The Millers allegedly executed the scheme using fraudulent documents to lie about the status of the proposed project in order to raise hundreds of millions of dollars which they used to enrich themselves.  The FBI will continue to ensure a level playing field by holding fraudsters accountable in the criminal justice system.”

According to the allegations contained in the Indictment:[1]

From November 2019 through May 2023, RANDY MILLER and CHAD MILLER engaged in a scheme to defraud investors in municipal bonds used to fund the development of a major sports complex in Mesa, Arizona called Legacy Park. The defendants worked together and with others to lie to potential bond investors about the interest sports organizations and other potential customers had in using or relocating to Legacy Park. The defendants and their associates forged and altered purported “binding” letters of intent and other documents from those potential customers to make it appear that the customers were committing to holding many events at Legacy Park, with a significant number of spectators, and agreeing to pay large fees – all far beyond what the organizations were considering, if they were considering Legacy Park at all. In some instances, RANDY MILLER and CHAD MILLER signed and directed others to sign customers’ names without the customers’ knowledge or permission. At other times the defendants copied and directed others to copy the signatures of other customers onto the fabricated letters, again without the customers’ knowledge or permission. As part of their scheme, the defendants forged documents on behalf of numerous persons and organizations, including an organization that promotes sports for disabled athletes.

RANDY MILLER and CHAD MILLER presented the fraudulent documents to prospective bond investors and incorporated them into their solicitation materials by claiming that Legacy Park would be 100% occupied at opening and would generate nearly $100 million in revenue in its first year of operations, more than enough to cover the bond payments. 

After the Legacy Park bonds were sold to investors, RANDY MILLER and CHAD MILLER used some of the proceeds to pay for personal expenses such as a home and SUVs. The defendants also paid themselves inflated salaries and withdrew hundreds of thousands of dollars in addition to their salaries.

While the defendants enriched themselves, Legacy Park struggled to survive. The park opened in 2022, but within months failed to generate enough revenue to make the monthly bond payments, and by October 2022 it was in default. On May 1, 2023, the project filed for bankruptcy and was later sold for less than $26 million. Of those proceeds, less than $2.5 million went to repay the approximately $284 million owed to Legacy Park bondholders. Accordingly, because of the defendants’ fraud, bondholders were left with near total losses.

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RANDY MILLER, 70, and CHAD MILLER, 41, both of Phoenix, Arizona, were both charged in the Indictment with one count of conspiracy to commit wire fraud and securities fraud, which carries a maximum term of five years in prison; one count of securities fraud and one count of wire fraud, each of which carries a maximum term of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison.

The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. 

Mr. Podolsky praised the outstanding work of the FBI. Mr. Podolsky also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action. 

The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Courtney L. Heavey and Matthew R. Shahabian are in charge of the prosecution.

 

SYRACUSE, NEW YORK – Paul Geer, age 57, of Hancock, New York, was convicted today by a federal jury after a two-week-long trial on two counts of coercing and enticing two separate children to travel across state lines to engage in unlawful sexual activity and two counts of transporting the children across state lines with the intent to engage in criminal sexual activity with those children.  The jury failed to reach a unanimous verdict on two additional counts. 

Acting United States Attorney Daniel Hanlon and Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI) Craig Tremaroli made the announcement.

The evidence at trial proved that, while Geer was a teacher at the Family Foundation School in Hancock, New York, he imposed various disciplinary sanctions on students that were tantamount to torture. The sanctions Geer imposed on students included depriving children of food or forcing children to eat food that had been regurgitated, binding children in rugs and leaving them in isolated rooms for extended periods of time and forcing children to perform forced physical labor. The evidence at trial further proved that, in 1994 and 2001, Geer used his position of authority and his ability to impose these brutal sanctions to coerce two students to travel with him, on separate occasions, to Maine and Toronto, Canada. The evidence at trial also proved that Geer transported the students across state lines with the intent to engage in sexual activity with them. While on those trips, Geer raped or otherwise sexually abused each of the two children.

Geer was taken into custody following the verdict. 

At sentencing currently scheduled for July 9, 2025, in Albany, New York, the two counts of coercion and enticement each carry a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to 5 years. The two counts of transporting children across state lines each carry a maximum sentence of 15 years in prison, a fine of up to $250,000, and a term of supervised release of up to 5 years. A defendant’s sentence is imposed by a judge based on the statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.

The case was investigated by the FBI with assistance New York State Police and the Colonie, New York Police Department. Assistant U.S. Attorneys Jessica N. Carbone, Adrian S. LaRochelle, and Michael D. Gadarian prosecuted the case as a part of Project Safe Childhood.

Project Safe Childhood is a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Launched in May 2006 by the Department of Justice, and led by the U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.