Sunday, June 26, 2016

Commerce Bank gets caught by a Cessna Turbo 182T Skylane and a pair

Kathryn's Report:

A criminal case in U.S. District Court in Worcester alleges how a pair of Chicago-based scammers convinced Worcester's Commerce Bank to loan them $382,500 to buy a plane. The case also lays out, in excruciating detail, how lax vetting of this particular loan apparently led to Commerce being scammed.

Dusten James Miller of Chicago and his girlfriend, Latoya Monique James, allegedly stole a Houston man's identity and then, with fake documents, tricked Commerce Bank into loaning them the money to buy a 2013 Cessna Turbo 182T Skylane airplane. The couple have been charged with multiple counts of conspiracy, bank fraud and money laundering.

The court documents show that once Commerce Bank realized the alleged scammers were coming back for more loans under other purportedly stolen identities, bank employees alerted federal authorities. The evidence Commerce Bank turned over helped authorities build a case against the duo, court documents said.

Mr. Miller was arraigned June 17 in the U.S. District Court in Worcester before Judge David H. Hennessy. He was assigned a federal public defender and ordered held until his next court date. His co-defendant, Ms. James, was arraigned June 9 in Worcester and is out on bail in Illinois. They are both scheduled to appear July 22 before Judge Hennessy in Worcester's federal courtroom.

Court documents pull back the veil on what appears to be some lax vetting of borrowers by Commerce Bank. For the $382,500 loan, Commerce Bank never met with the Houston man to whom it thought it was lending money, according to court documents; the bank never spoke with him until after the loan had been approved.

Instead, court documents said Commerce depended on the word of a Montana-based airplane loan broker named Wally Zook & Associates, with which Commerce had a business relationship since 2006. Zook & Associates did all the work confirming the details of the loan, and vetting the borrower, according to court documents.

Turns out that Zook & Associates only exchanged emails with a person who claimed to be the Houston medical attendant and wanted to buy a plane, according to the documents. (The attendant's name is not given here because it's his identity that was allegedly stolen.)

"From on or about October 13, 2014, until October 31, 2014, Zook & Associates exchanged electronic communications with an individual they believed to be (the victim) via the email address “(man's name)” In addition, Zook & Associates exchanged electronic communications with an individual who they believed was (the seller) via the email address “(seller's business)” Court documents indicate Zook & Associates was a victim of the scam, as well.

Once the loan was approved, the Houston man needed to sign the loan documents. The alleged scammers told Zook & Associates to send the documents to an address in Illinois, because the man borrowing the money would be attending a conference there. The address turned out to be a virtual office company, which simply accepted the documents allegedly on behalf of Mr. Miller and Ms. James.

The only person who actually met someone purporting to be the Houston man buying the Cessna was the Chicago notary public who affixed his seal to the loan documents. Federal authorities said the notary public met with someone claiming to be the the borrower in the lobby of the Trump International Hotel and Tower in Chicago, "where Dusten used to reside," the court documents stated. The notary public told federal agents he did not remember what identification was shown, and he could not pick out Mr. Miller from a photo array.

Commerce Bank did not know it had been scammed until the first payment on the loan came due in November 2014, and it contacted the Houston man to whom Commerce Bank thought it loaned the money. The man told Commerce Bank he did not borrow the money and that his identification had been stolen. He had reported the theft of his identity to Houston police the day before the bank called.

Commerce was not the only victim of these alleged scammers. Federal authorities allege that Mr. Miller and Ms. James did the following: convinced a Pryor, Oklahoma, airplane loan company to loan them $484,000 for a plane using a stolen identification and false documents; fraudulently borrowed $228,000 from a Vermont airplane finance company; and convinced an Irvine, Calif. credit union to lend them $79,771 for a Mercedes Benz that they used to launder some of the proceeds from other scams.

In every case, they were allegedly able to borrow the money without having to meet in person with anyone from the lending agency. Armed with documents they either allegedly stole or made up out of whole cloth, the couple conducted the deals by email and over the phone. All told, they allegedly received more than $1.1 million from the lenders.

What's also interesting in the allegations against Mr. Miller and Ms. James is prosecutors' contention that they targeted Commerce Bank twice more, each time using a different stolen identity, according to court documents.

In October 2015, Mr. Miller and Ms. James allegedly attempted to borrow $150,000 from Commerce Bank for another plane. In this case, there was no middleman; Commerce Bank employees communicated directly with the couple. 

Apparently on high alert at this point, Commerce Bank never authorized the loan, as it started asking hard questions and demanding more documentation. The couple never completed the paperwork.

And in November, the pair contacted Commerce Bank once more, again allegedly attempting to obtain a $240,000 airplane loan under another stolen identity. "Ultimately, Commerce did not fund the (victim's name) loan due to many inconsistencies in the (victim's name) application," the court documents read.

A spokesman for Commerce Bank issued this statement regarding the case: “We commend the FBI on their successful investigation in this case. The bank has reviewed its internal procedures and has taken steps to ensure that we are protected from such occurrences in the future.”

In answering a question from a reporter, Commerce said it still does business with Wally Zook & Associates.

As an aside, the court documents indicate that Commerce Bank has a senior vice president and managing director of aircraft lending, who provided federal authorities with evidence about the actions of the alleged scammers' interactions with the bank. Who knew Commerce Bank had an aircraft lending division?

Original article can be found here:

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