ALBANY, Ga. – Eight defendants who pleaded guilty for their role in an elaborate counterfeit check cashing scheme have been sentenced by a federal judge for their crimes.
According to court documents, Fredner “Fresh” Reserve was the ringleader of a small organization of individuals who deposited counterfeit checks provided by Reserve into various banks between August and September 2019, sometimes immediately withdrawing cash. The checks were often deposited via ATM. The scheme was discovered when the vice president of Southwest Georgia Bank (SWGB) contacted the U.S. Secret Service on September 6, 2019, regarding fraudulent checks that were being deposited at SWGB. That same day, the investigating Secret Service Special Agent met with a Moultrie Police Department (PD) investigator to discuss whether a similar investigation involving Ameris Bank was part of the same conspiracy.
On September 19, 2019, another SWGB bank employee contacted the Moultrie PD after seeing a customer, co-defendant Khadijah Bailey, who had deposited fraudulent checks into her account at the bank attempting to withdraw cash. The responding officers were able to apprehend Bailey, Reserve and co-defendant Deborah Johnson, who was working with Reserve in the scheme. A search of Johnson’s car revealed additional fraudulent checks and other evidence of the scheme. Co-defendant Erica Langley had earlier been arrested after depositing a fraudulent check and withdrawing money from her SWGB account but could only identify Reserve who had recruited her to participate in the scheme by the name “Fresh.” Working with local law enforcement, Secret Service agents tied the fraud scheme to SWGB and Ameris branches in several South Georgia cities. The investigation uncovered that co-defendants Bailey, Langley, Demetrius Collins, Jerry Lynn King, Jerra Carter and Frank Thomas, as well as other uncharged individuals, would either open or use existing bank accounts to deposit fraudulent checks provided by Reserve and Johnson. Reserve admitted that he conspired with others to devise and execute a scheme to defraud financial institutions using fraudulent checks for a fraud loss between $40,000 and $95,000.
“The loss to these community banks would have been much greater if not for responsive bank employees who reported the crime and the quick investigative work by the U.S. Secret Service and the Moultrie Police Department,” said Acting U.S. Attorney Peter D. Leary. “Committing fraud against small businesses is not a victimless crime. People’s livelihoods can be severely damaged, and the harmed businesses can fail to recover. Our office will not hesitate to prosecute individuals caught deceiving people for profit.”
“This case is another example that clearly shows criminals are continuously looking for ways to steal from financial institutions. In this case, the community banks were violated when the fraudsters opened bank accounts for the sole purpose of committing fraud. The United States Secret Service, along with our state, local and federal law enforcement partners will continue to investigate, arrest and support the successful prosecution of the criminals who choose to commit this and other types of financial fraud in our community and around the nation,” said Clint Bush, Resident Agent in Charge, United States Secret Service, Albany, Georgia Resident Office.
“This particular check cashing scheme is an unusual case for Moultrie. This investigation exemplifies the outstanding cooperation that exists between our community and law enforcement that we are able to rapidly track, identify and shut this crime down, preventing even greater harm to our local banks and ultimately our community,” said Investigator Frank Newton, Moultrie Police Department.
Reserve and co-defendants were sentenced by U.S. District Judge Louis Sands to the following terms of imprisonment and ordered to collectively repay almost $20,000 in loses to the banks (their individual judgements are based on the attempted amount of theft):
Fredner “Fresh” Reserve, 34, of Lancaster, Pennsylvania, pleaded guilty to conspiracy to commit bank fraud and was sentenced to serve 31 months in prison to be followed by three years of supervised release on March 25, 2021;
Deborah Johnson, 29, of Philadelphia, Pennsylvania, pleaded guilty conspiracy to commit bank fraud and was sentenced to serve 24 months in prison to be followed by three years of supervised release on October 15, 2020;
Jerry Lynn King, 53, of Moultrie, pleaded guilty to conspiracy to commit bank fraud and was sentenced to serve 21 months in prison to be followed by three years of supervised release on January 28, 2021;
Frank Thomas, 24, of Moultrie, pleaded guilty to conspiracy to commit bank fraud and was sentenced to 18 months in prison to be followed by three years of supervised release on July 8, 2021;
Demetrius Collins, 48, of Moultrie, pleaded guilty to conspiracy to commit bank fraud and was sentenced to serve 12 months in prison to be followed by three years of supervised release on January 28, 2021;
Jerra Carter, 22, of Moultrie, pleaded guilty to conspiracy to commit bank fraud and was sentenced to serve eight months in prison to be followed by three years of supervised release on March 24, 2021;
Erica Langley, 37, of Moultrie, pleaded guilty to conspiracy to commit bank fraud and was sentenced to serve six months in prison to be followed by three years of supervised release on February 25, 2021; and,
Khadijah Bailey, 26, of Moultrie, pleaded guilty to conspiracy to commit bank fraud and was sentenced to serve six months in prison, 90 days of which is home confinement, to be followed by three years of supervised release on July 8, 2021.
The case was investigated by the U.S. Secret Service and the Moultrie Police Department.
Assistant U.S. Attorney Robert McCullers prosecuted the case for the Government.
If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, contact the National Center for Disaster Fraud toll free at: (866) 720-5721 or e-mail at: disaster@leo.gov
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