Feds Say Credit Card Scam Targeted Prominent Execs

Credit card numbers belonging to the late administrator of Cedars-Sinai Medical Center, the chairman of Lehman Bros. Inc. and other prominent executives were stolen and used by two Tennessee men to buy diamonds and watches worth more than $730,000, federal prosecutors said Thursday.

Prosecutors say the two allegedly asked banks and credit card companies to switch the billing addresses on the executives’ accounts. Once the two men secured the credit card numbers, they had diamonds worth as much as $54,000 shipped to hotels where they had made reservations in the executives’ names, prosecutors said.

The two defendants, James Jackson, 39, and Derek Cunningham, 28, “fraudulently obtained and attempted to obtain approximately 20 diamonds, including at least two in excess of five carats,” U.S. Atty. Mary Jo White said in a statement announcing their indictment. The scheme lasted from December until February, prosecutors say.

Court documents identify by name three alleged victims --Stephen Bollenbach, chairman of Las Vegas-based Park Place Entertainment Corp.; Nackey Loeb, late publisher of the New Hampshire Union Leader newspaper, who died in January; and James Klinenberg, late administrator of Cedars-Sinai Medical Center in Los Angeles, who died in December.

Court papers identify other victims as the chairman of Lehman Bros. and the chief operating officer of Coca-Cola Enterprises. Richard Fuld is chairman of Lehman Bros. and John Alm is the chief operating officer of Coca-Cola.

Prosecutors also said a Wendy’s chairman who died Dec. 18 was a target of the fraud. Gordon Teter, Wendy’s chairman, died on that date.

Using their victims’ Social Security numbers, the two defendants are alleged to have telephoned banks and credit card companies and requested that their billing statements be sent elsewhere. Prosecutors did not say how the two obtained the Social Security numbers.

Prosecutors say the pair typically had the diamonds shipped from jewelry vendors across the country to hotels in Tennessee, Arkansas, Mississippi and New Jersey, and then had the merchandise rerouted to a hotel in the Memphis area.

Both men were arrested in February, although Cunningham is now a fugitive.

They were arrested after prosecutors traced a diamond shipment from a New York dealer to a Teaneck, N.J., hotel, and then on to Memphis.

The two face up to 30 years in jail if convicted.