Pakistani man arrested on credit card bust out scam

According to the feds..."Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JANZAYB KHAN, 28, of Waterbury, was arrested today on a criminal complaint charging him with bank fraud, conspiracy to commit bank fraud, and making a false oath and false statement under penalty of perjury in a bankruptcy case. The charges stem from an alleged credit card “bust-out” scheme that defrauded over a dozen financial institutions.

As alleged in the complaint, KHAN obtained 31 credit cards from over a dozen financial institutions. In order to obtain the cards, KHAN made false statements to some of the financial institutions, including falsely stating his income, assets, address and employment history. Then, within a short period in January 2013, nearly all of the available credit on KHAN’s cards were rapidly utilized or “busted out.” More than $59,000 was spent on cash advances, gift cards and precious metals. Some of the proceeds from the cash advances were deposited into KHAN’s bank account and then transferred to bank accounts of other individuals. In addition, almost $70,000 was charged in sham transactions at collusive merchants, who then issued checks from the proceeds to one of KHAN’s acquaintances.

The complaint further alleges that after the bust-out, KHAN filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court and attempted to discharge all of his credit card debt. In his bankruptcy court filings, KHAN falsely stated that the majority of his debt was due to gambling losses. KHAN also made a number of other false statements under oath during an examination by the U.S. Trustee in his bankruptcy case. The U.S. Bankruptcy Court later denied the discharge of KHAN’s debts.

The complaint alleges that the financial institutions that issued KHAN’s credit cards incurred losses of more than $165,000 as a result of the scheme.

KHAN appeared this afternoon before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and was released on a $100,000 bond.

Bank fraud and conspiracy to commit bank fraud each carries a maximum term of imprisonment of 30 years. Making a false oath and a false statement under penalty of perjury in a bankruptcy case carries a maximum term of imprisonment of five years.

U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the U.S. Secret Service and is being prosecuted by Assistant U.S. Attorney Neeraj N. Patel."

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