Jerome Brown, 42, of Detroit, Michigan, was sentenced today in U.S. District Court to five years in federal prison for his involvement in a conspiracy to launder money obtained through fraudulent federal and North Carolina state tax refunds. U.S. District Judge Deborah K. Chasanow also ordered Brown to pay $604,889.64 in restitution. Brown had previously pleaded guilty to conspiracy to commit money laundering on January 28, 2022.
The sentencing was announced by U.S. Attorney for the District of Maryland, Kelly O. Hayes, alongside key law enforcement partners including the Internal Revenue Service – Criminal Investigation (IRS-CI), U.S. Secret Service (USSS), Department of Homeland Security Office of Inspector General (DHS-OIG), and the Social Security Administration Office of Inspector General (SSA-OIG).
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According to his guilty plea, Brown admitted to conspiring with individuals in Nigeria and Michigan between February and August 2020 to launder proceeds from wire fraud. The scheme involved loading fraudulently obtained funds onto Green Dot pre-paid debit cards. Brown then laundered these funds by depositing them into bank accounts, making ATM withdrawals, and purchasing money orders and cryptocurrency.
The funds involved in the money laundering scheme were traced back to stolen tax refunds issued by the Internal Revenue Service (IRS) and the North Carolina Department of Revenue (NCDOR). These agencies administer federal and state revenue laws and provide tax refunds to eligible individuals, which at the time could be deposited onto pre-paid debit cards. Brown and his co-conspirators routinely cashed out these funds shortly after they were loaded onto the cards.
The investigation revealed that a co-conspirator based in Nigeria, along with others, orchestrated the placement of funds on the pre-paid debit cards. These cards were registered with Green Dot using stolen personally identifiable information (PII) belonging to identity theft victims across the country, including in Maryland.
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Co-conspirators in the United States purchased the pre-paid debit cards and then transmitted the card information to the individual in Nigeria. This allowed the co-conspirator to receive the fraudulently obtained government funds. The scheme was further facilitated by the use of stolen PII to file false IRS tax returns, as well as applications for NCDOR tax refunds and state unemployment insurance payments.
Once the federal and state agencies deposited the funds onto the pre-paid debit cards via ACH transfers, the co-conspirator in Nigeria would notify others, including Brown, that the funds were available. In exchange for a commission, Brown and other co-conspirators facilitated the withdrawal of these funds, returning the remaining balance to the co-conspirator in Nigeria.
Brown and his co-conspirators actively sought to conceal their identities and the nature of the money laundering conspiracy and underlying fraud scheme. Their methods included enlisting others to make withdrawals, using multiple withdrawal locations, converting funds to cash instead of depositing them into bank accounts, and making money orders payable to third parties.
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The investigation determined that Brown personally cashed out at least approximately $540,975.80 from the pre-paid debit cards. He retained roughly 40 percent of these proceeds, totaling $216,390.36, and sent approximately $324,585.44 in Bitcoin to his co-conspirator in Nigeria. The co-conspirators are believed to have used the pre-paid debit cards to fraudulently apply for at least $1,255,761 in benefits from the IRS and $588,716 from the NCDOR.
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