Jerome Brown, a 42-year-old resident of Detroit, Michigan, was sentenced to five years in federal prison for laundering money stolen from federal and North Carolina state tax refunds. U.S. District Judge Deborah K. Chasanow also ordered Brown to pay restitution totaling $604,889.64. Brown had pleaded guilty to conspiracy to commit money laundering on January 28, 2022.
The sentencing was announced by Kelly O. Hayes, U.S. Attorney for the District of Maryland, alongside several law enforcement agents including Special Agent in Charge Kareem A. Carter of the IRS Criminal Investigation, Special Agent in Charge Matt McCool of the U.S. Secret Service, and Inspector General Joseph V. Cuffari of the Department of Homeland Security, among others.
In his plea, Brown admitted to conspiring with individuals from Nigeria and Michigan between February and August 2020. The conspiracy involved laundering proceeds from wire fraud through Green Dot pre-paid debit cards. Brown and his co-conspirators deposited the fraudulent funds into bank accounts, withdrew cash via ATMs, and purchased money orders and cryptocurrency.
The fraudulent proceeds were derived from funds stolen from the Internal Revenue Service (IRS) and the North Carolina Department of Revenue (NCDOR). These agencies administer federal and state revenue laws, providing tax refunds to eligible individuals. The refunds were placed onto pre-paid debit cards, which Brown and his co-conspirators cashed out shortly after the funds were added.
Brown’s operation involved a co-conspirator in Nigeria, who registered the prepaid cards using stolen personally identifiable information (PII). Cards purchased in the U.S. were sent to the Nigerian partner, facilitating the reception of stolen government funds. The group used the stolen PII to file false IRS tax refunds and NCDOR tax refunds, including state unemployment insurance payments.
The stolen funds were deposited onto prepaid cards via ACH transfers by the federal and state agencies. Once the funds were available, Brown, in exchange for a commission, would cash out the cards and send remaining proceeds back to the Nigerian co-conspirator.
Efforts were made by Brown and his associates to conceal their fraud activities. These included enlisting others to make card withdrawals, disbursing funds over multiple locations, converting money into cash instead of depositing into bank accounts, and issuing money orders to other individuals.
It is reported that Brown cashed out approximately $540,975.80 from prepaid cards, retaining roughly 40 percent, or $216,390.36, for himself. He also sent about $324,585.44 in Bitcoin to his partner in Nigeria. The conspirators exploited prepaid cards to claim approximately $1,255,761 from the IRS and $588,716 from the NCDOR in benefits.
U.S. Attorney Hayes praised the efforts of the investigating agencies and also extended thanks to Assistant U.S. Attorneys Elizabeth Wright and Darren Gardner for their roles in prosecuting the case.
For further details on the priorities and resources of the Maryland U.S. Attorney's Office, interested parties can visit the relevant sections of the justice website.
