Court’s Largest Single Disbursement Reaches Thousands of Victims
Take one international bank fraud scheme, 17 co-conspirators, 18,253 victims and over $3 million in restitution. Add a dedicated district court staff and you have what is believed to be the largest single check disbursement made to date by any district court.
The story begins in Trenton, New Jersey with the 2010 conviction in USA v. Sacks of two men who were part of a 2004 telemarketing fraud and identity theft scheme. According to the New Jersey U.S. Attorney’s Office, they were guilty of defrauding financial institutions and their account holders throughout the United States of millions of dollars through the unauthorized debit of customer bank accounts. Funds from over 100,000 bank accounts were withdrawn or attempted to be withdrawn under the pretense that individuals, many of them elderly, had purchased items through a telemarketing business. Fifteen other co-conspirators from Canada, New Jersey, Florida, Colorado, and Michigan had already pled guilty in the scheme.
The majority of these fraudulent transactions were reversed by the banks, but in the end the court ordered restitution to be paid to over 18,000 victims. Among several defendants paying restitution, one defendant in USA v. Sacks paid $3.02 million prior to his sentencing and with this, the detailed process began to unite victims with their lost money.
Simply collecting victim information involved U.S. Postal Inspectors, the Secret Service, several U.S. Attorney’s Offices and the District of New Jersey Probation Department. In the end, a detailed spreadsheet was produced with columns of victims’ names, addresses, their losses, and a proportionate restitution amount. Unfortunately, there also were some question marks in those columns. Literally.
“We had some gaps. The information so laboriously gathered by the other agencies had question marks on lines instead of names, or it was left blank,” said Denise Howard, Finance Manager for the District of New Jersey in Trenton. “There were a lot of unknowns for us to sort out to get the money to the victims.” And paying that restitution as quickly and accurately as possible was a priority.
“The scam started in 2004,” Howard said.” So not only did we wonder if many of the victims were still alive, but how many times they may have moved in those years. We didn’t want them to feel like they were being victimized again by not getting the money to them in a timely way.”
The court’s finance office began the complicated and time-consuming task of cleaning up and verifying the spreadsheet information. A tool created by the District Court of the Eastern District of Washington helped them verify the records for correct formatting before importing the information into a database.
With the database verified and downloaded, they began running restitution checks in batches of perforated sheets. “We didn’t know how hot our check printer would get, so we settled on running 2,700 in the morning and 2,700 in the afternoon. We did that over the course of four days,” said Howard.
For five days, staff from the clerk’s office along with the court’s summer interns gathered in a conference room with stacks of checks, envelopes, and 3×5 cards in front of them. One side of the card identified all the defendants in the case; the other side told the recipient they were receiving the restitution check because they had been identified as a victim and that this would be the only check they’d receive.
Each recipient also was provided with the email address and phone number of the court’s finance help desk. Weeks after the checks were mailed, the calls were still coming. Over one weekend, the court received 233 voicemails.
“These are people who didn’t know they were victims in the cases. We are also getting calls from banks checking the validity of the checks because they’re perforated and it’s an electronic signature. In some cases,” said Howard, “people call whose now deceased parents or grandparents were victims. Some people wonder how much they actually lost. Or what they did wrong. They don’t understand that their bank was a victim as well.”
And there are a lot of thank-yous. Like the grandmother who was excited because she could now give her grandson a nice wedding gift.
“From the very beginning of the investigation, the cooperation—the team work—was key,” said Chief Deputy Clerk Theresa Burnett. “It was the joint effort of a number of agencies that allowed the Court to get from sentencing to check distribution. It is a very good example of the kind of complex work that often takes place behind the scenes. We have learned from this process, and we will help other courts faced with such a daunting task.”
Chief Judge Jerome B. Simandle (D. NJ) added, “This is a great and successful effort. These are the unsung heroes of our court and, I’m sure, of every court.”