Welfare Recipient Accused of Elaborate Fraud Scheme

A 35-year-old welfare recipient was arrested Thursday and accused of five federal felony counts alleging that he engaged in a sophisticated scheme that defrauded local banks of about $270,000.

At a brief court hearing, Munawar Mohammed Moton was ordered to the federal Metropolitan Correctional Center in downtown San Diego. U.S. Magistrate Leo S. Papas set a bail hearing for next Tuesday.

Moton, a San Diego resident, was charged with money laundering, making a false statement to a bank, fraudulently using a credit card, mail fraud and unlawfully structuring currency transactions. If convicted, he could draw up to 75 years in prison and up to $2.26 million in fines, said Assistant U.S. Atty. David Katz, the prosecutor.

Katz said agents from the Secret Service, Postal Service and Internal Revenue Service learned about Moton in April. Agents did “an extraordinary job of ferreting out this scheme and piecing it together in a real short period of time,” Katz said.

The Secret Service investigates credit card fraud along with its better known roles--protecting top government officials and combatting counterfeiting.

According to the complaint filed Thursday against Moton, he used eight aliases to open a variety of accounts at bank branches around San Diego, producing a California driver’s license or identification card for each alias.

Then he applied for credit cards at each bank branch, followed by a request for a large advance on each of the credit cards, using mail drops and answering services for non-existent employment references, the complaint said.

After that, the complaint said, Moton undertook a check-kiting scheme that cost the various banks $270,000. To launder the cash, Moton deposited it in other accounts or tried to buy various things, including a restaurant near San Diego State University, the complaint said.

Moton, who has a wife and three children, received more than $40,000 in welfare benefits over the past 3 1/2 years, prosecutors said in a statement announcing his arrest. The county Department of Social Services is investigating those payments, prosecutors said.