New York News: 2 Florida Men Plead Guilty To Multimillion-Dollar Credit Card Fraud Scheme

Defendants Used Companies to Cause More Than $7 Million in Unauthorized Charges to Thousands of Consumers

New York – Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JAMES BECKISH and JOSEPH ANTHONY DEMARIA pled guilty to one count of conspiracy to commit wire fraud in connection with a scheme to make unauthorized charges on credit cards through sham companies that purportedly offered nutraceutical products for sale over the internet. BECKISH and DEMARIA pled guilty before United States District Judge Edgardo Ramos.

According to the Complaint, the Information to which BECKISH and DEMARIA pled guilty, and statements made during the proceedings today:

Between 2013 and 2017, BECKISH, DEMARIA and others, created and operated dozens of companies that purported to sell dietary supplements and similar products called “nutraceuticals” over the internet. The websites of the defendants’ companies purported to sell products like dietary supplements but, in reality, were primarily used to repeatedly bill consumers who never ordered their products, or even if they did, almost never received them. The defendants used these websites as a cover for unauthorized and recurring charges that were placed on thousands of credit card numbers that the defendants had purchased or obtained, or had acquired from consumers who had attempted to order the products in question. For example, in one email, DEMARIA asked BECKISH: “Are we shipping these guys actual nutra products? Lol.” To which BECKISH responded: “Nope.”

BECKISH, DEMARIA, and others created these different companies and websites, because they knew that credit card processors would stop doing business with them over time as consumers noticed the unauthorized charges and sought refunds. These refunds, called “chargebacks” by credit card processors, are generally low for legitimate businesses but reached extremely high percentages for many of the companies associated with the defendants’ scheme. In certain instances, the chargeback rates quickly approached or even exceeded 20 percent – that is, consumers were seeking refunds of more than 20 percent of the charges placed by certain of the defendants’ companies. Credit card processors, in turn, paid millions of dollars in refunds for fraudulent charges associated with the defendants’ companies between 2013 and 2017 in attempts to refund affected consumers.

In total, BECKISH and DEMARIA both pled guilty to causing more than $7 million in loss during the duration of the scheme.

BECKISH, 32, of Miami, Florida, and DEMARIA, 33, of Miami, Florida, each plead guilty to one count of conspiracy, which carries a maximum sentence of five years in prison. BECKISH and DEMARIA also agreed to pay restitution and to forfeit $7,231,878. Sentencing for BECKISH is scheduled for January 16, 2019 at 12:30 p.m. before Judge Ramos. Sentencing for DEMARIA is scheduled for January 18, 2019 at 12:30 p.m. before Judge Ramos.

The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentence imposed on the defendants will be determined by the judge.

Mr. Berman praised the investigative work of the Secret Service.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Danielle Sassoon, Olga Zverovich, and Michael McGinnis are in charge of the prosecution.

SOURCE: news provided by JUSTICE.GOV on Thursday, October 11, 2018.