A Fraud at the Highest Level

Before Harry Lidsky, MBA, CCI, CIG, retired from his role as Special Agent in Charge at the Department of Justice – Office of the Inspector General’s Cyber Investigations Office, he was able to help put two fraudsters behind bars, including one with a significant sentence, in a case he called a “fraud at the highest level.” He shared details about this case in his educational session, “Chasing Ghosts: Identity Theft, Document Alteration, and PPP Loans,” presented virtually during the 35th Annual ACFE Global Fraud Conference.

The case, which was initiated in July 2021 in the New York City area, involved possible Payment Protection Program (PPP) loan fraud and identity fraud. Lidsky thought it would be an easy and straightforward case, but it wasn’t. Because identity theft was involved, it would take the investigation onto a whole different path. In addition, the case involved cryptocurrency, which is why his office got involved.

Lidsky and the other investigators determined the suspect used a fake ID to receive PPP loans and Economic Injury Disaster Loans (EIDL), so the ID wouldn’t lead investigators to the culprit. Instead, the name and address led to the identity theft victim who had nothing to do with the loan applications.

“Identity fraud cases, just by their nature, just push you in the wrong direction right out of the gate,” said Lidsky.

Pattern of Life

Despite being led down this dead end, Lidsky said the team stuck with the one thing he knew was real: the communication involving the loans. He began to track email and phone records. Phone tower pings for the previous approximately 18 months were looked at, as well as real-time pings. This created a pattern of life, which included the suspect’s possible home, workplace and more.

Lidsky also looked at debit card transactions, tracing where the funds from the loans were going. In many cases, these transactions were seen in the same locations. However, more bank accounts were identified, and then came more stolen identities, fraudulent transactions and loan deposits.

“Little things can often make a case.”

With the case now branching in various different directions, Lidsky decided to start surveillance, following the phone pings off the tower every 15 minutes. Most of this work was done on foot. While he followed the pings, he started finding patterns. He noticed a white Jeep Cherokee with Maryland tags at two locations. Investigators determined the SUV was a rental from the Avis counter at LaGuardia Airport and it was six weeks overdue from its scheduled return.

Unfortunately, yet another stolen identity was connected to this rental, but all hope wasn’t lost yet. Lidsky was able to get access to the vehicle’s GPS, which ultimately led him to the rental lot back at the airport after the vehicle was repossessed. The vehicle hadn’t been cleaned, so he was able to lift a fingerprint that would prove helpful later in the investigation.

Identifying the suspects

With more phone tracking and following the trail of money, investigators were able to pinpoint the home where the suspect lived and who was using the debit card. They began to feel confident that this man, identified as Adedayo Ilori, who was already charged in another fraud, was their suspect and ringleader. Ringleader, because investigators learned there was a second suspect after seeing him enter the apartment with Ilori.

The second suspect, identified as Chris Recamier, a man Ilori met during a previous prison stint, was taken down at the apartment. The apartment unit was incriminating. Lidsky called it “a fraud factory.” No furniture – only one air mattress and a printer, computer, shredder and stacks of paperwork with loan and banking information. Ilori, meanwhile, was arrested at his home. The investigation continued and more evidence was uncovered. For his role, Recamier was sentenced to nine years in prison. Ilori was convicted of attempting to steal more than $10 million and sentenced to 25 years in prison, which, at the time, was the longest sentence handed down for a PPP loan fraud case.

“That’s a murder sentence,” said Lidsky. “That’s a lot of time for white collar fraud. He earned every bit of it.”