Four people were sentenced Monday in a check-fraud scheme that last year cost Anchorage businesses tens of thousands of dollars and saw several people fall victim to identity theft.
Mail thefts and car break-ins let the defendants hijack Alaskans' bank accounts and write dozens of fake checks, prosecutors said.
Nakisha Reed, 37, pleaded guilty to one count of committing a scheme to defraud, Alaska State Troopers said in an online dispatch. Court records show Reed had originally been charged with 78 offenses in the case, including dozens of counts of theft, forgery and fraudulent use of an access device, from March to June of 2016.
Three other people — Reed's boyfriend, 41-year-old Derrick Grandberry-Williams; her daughter, 19-year-old Mia Stephens; and Jeffrey Debaere, 41 — also pleaded guilty Monday to single counts of second-degree forgery.
Assistant district attorney James Fayette, the prosecutor in the case, said Thursday that at least two other defendants have not pleaded guilty. Jyrmayne Canty, 32, and Debaere's wife, 33-year-old Kyleen Erdman, were awaiting trial on forgery and theft charges.
Fayette said that the victims' information was initially compromised in car break-ins, as well as mail and wallet thefts. Those details were used to gain access to the victims' financial accounts, which were then drained of funds.
"They use your money to open up another banking account with your name," Fayette said. "And then they change the address, so all the mail goes to the fraudster's dump address and now they've got a free credit card, a free checking account."
The stolen information was also used to print a series of fraudulent checks, Fayette said, bearing legitimate business names but with the victims' account numbers at the bottom.
"That thereby increased the chances that if a check was presented at a retail venue or a check-cashing venue, the teller would accept and process the check and let them walk out with cold hard cash," Fayette said.
Most of the defendants were enlisted as "mules" to use the checks because they were often caught on surveillance video doing so, Fayette said, but Reed and Grandberry-Williams were the "ringleaders" of the scheme.
"They were the people that were most culpable and printed up the counterfeit checks," Fayette said.
A criminal complaint against Reed, written by trooper investigator Marc Hendrickson, said the first report of the scheme came in May, from a Fairbanks man whose Denali Federal Credit Union account had been hijacked and changed to an Anchorage address.
A $2,000 check deposited in the account came from a Wasilla business owner, who said his Matanuska Valley Federal Credit Union account had recently seen about $10,000 in fraudulent check activity.
A fraud officer at Denali, who called the hijacked account's new number to say the $2,000 check was being reversed, spoke with a woman who correctly answered the account's security questions. Denali subsequently told troopers that new checks for the Fairbanks man's account, sent to the Anchorage address, had been ordered in the Wasilla business owner's name.
A check-cashing firm reported cashing six fraudulent checks totaling more than $10,000 during a three-day period in April, including some made out to Grandberry-Williams, Debaere, Erdman and Stephens. The firm lost that amount when the fraudulent charges were reversed, Hendrickson said.
The Wasilla business owner reported a dozen fraudulent checks drawn on his account in April, including one made out to Reed and another to Grandberry-Williams. Others were used to cover rent for Grandberry-Williams' apartment, as well as buying nearly $5,000 in goods including gift cards, a video-game console and a TV at Carrs Safeway, and items from Forever 21, Michaels, Sports Authority and Sam's Club.
Hendrickson said another fraudulent charge at online retailer Amazon against one of the hijacked accounts, rejected because it had been closed, was intended to purchase a "check printing package" including a laser printer and special magnetic ink used by banks to read checks. The order was to be shipped to Stephens' address in Anchorage.
Troopers served a May search warrant at an address one of the hijacked accounts had been changed to, finding uncashed fraudulent checks and speaking with Stephens. She claimed Reed was covering the rent in exchange for her delivering any mail that arrived there, Hendrickson said, and that Reed had given her checks "only to help her financially."
After troopers discovered several other victims and numerous other checks, Fayette estimated the total in fraudulent charges from the case at between $30,000 and $50,000.
Hendrickson, who spent three months investigating the case, said the system of fraud stood out for both its simple design and complex execution.
"It was one of the better schemes I've seen," Hendrickson said. "This was a very well-thought-out, very well-organized scheme."
Fayette said Reed read from a letter she had written in court Monday, expressing regret for her crimes and saying she was in treatment for addiction and substance abuse issues.
"I have affected my victims, the community, and my own family," Reed wrote. "I am ashamed and embarrassed of the person I used to be."
A sentencing memo from Debaere's attorney attributed his actions to a heroin and methamphetamine habit, saying Debaere became involved in the scheme "to fuel his substance addiction."
Reed was sentenced to six years in prison with four years suspended, troopers said, while Grandberry-Williams received a five-year sentence with two years suspended and Debaere received a 30-month sentence with 24 months suspended. Fayette said Stephens was sentenced to 90 days, with a chance to have her felony conviction set aside if she completes two years of probation.
After their release, Reed, Debaere and Grandberry-Williams will spend five, three and two years on probation respectively.
The amount of restitution to be paid by the defendants who pleaded guilty will be determined at a future court hearing, troopers said.