An Orinda man was sentenced to 40 months in federal jail on Friday after he was convicted of fraud and cash laundering in reference to a debit card rip-off, the U.S. Lawyer’s Workplace stated.
Alan Safahi, 62, was convicted on June 30, 2022, of 1 rely of financial institution fraud, 4 counts of wire fraud and one rely of cash laundering. In line with a courtroom order, he developed an elaborate fraud scheme with pay as you go debit playing cards that allowed him to buy an Orinda dwelling and finance a lavish life-style.
Safahi would acquire cash from purchasers of his firm, CardEx, and use the cash to buy the debit playing cards. He would then use a “funding on demand” scheme to defraud the banks that supported the playing cards and would divert the cash to his personal accounts. For instance, a consumer of the corporate would buy a $100 debit card and spend $10 of the cardboard’s steadiness. Safahi would then report the remaining steadiness to the financial institution as being $10 as a substitute of $100, permitting him to entry the remaining $90 for his personal use, the U.S. Lawyer’s Workplace stated. He obscured the scheme from his purchasers by precisely reporting the remaining balances to them whereas deceptive the banks concerned.
The scheme fell aside on Sept. 25, 2014, when he directed an worker to report the correct balances of the playing cards to the financial institution. In line with proof, Safahi beforehand reported a steadiness of $93,734 on the playing cards — nevertheless, the precise complete, which was reported to the financial institution that day, was $2,774,953. Safahi had practically $2.7 million in unfunded legal responsibility, the U.S. Lawyer’s Workplace stated.
He had been utilizing the cash from the fraud scheme to repay outdated money owed, fund his life-style and buy a house in Orinda. Two days earlier than reporting the correct steadiness of the playing cards to the financial institution, he issued himself an $80,000 cashier’s verify that he used to assist pay for the house, which offered the idea for him to be convicted of cash laundering, the U.S. Lawyer’s Workplace stated.
Along with 40 months in jail, Safahi was additionally ordered to pay a $100,000 wonderful and to have three years of supervision after his launch. He was ordered to give up to start his jail sentence on Could 4.
In a sentencing memo, the federal government stated Safahi tricked each his financial institution and his purchasers, as his purchasers trusted their clients’ cash to him and believed that it was secure and safe.
A listening to to find out how a lot Safahi should pay in restitution is scheduled for March 31.