A federal judge convicted an Orinda man of multiple felonies in connection with a prepaid debit card scheme that netted him more than $1.5 million.
Alan Safahi, 61, was found guilty of bank fraud, wire fraud and money laundering in a prepaid debit card scheme, following a nearly four-week federal bench trial in San Francisco, according to an announcement from U.S. Attorney Stephanie M. Hinds and IRS Special Agent in Charge Mark H. Pearson.
Safahi developed an elaborate fraud scheme where he collected money from clients to fund prepaid debit cards but then lied to banks about the cards’ balances, pocketing the difference to the tune of $1.5 million, prosecutors said in the announcement.
For example, a client of Safahi’s company CardEx, would buy a prepaid debit card for $100 and spend $10 of that $100 balance. Safahi would then report to the bank the ‘balance’ of that card as $10 instead of $100.
By doing this, Safahi was able to access the money representing the difference between the actual card balance and the amount spent and reported to the bank.
Safahi used the money he stole to pay off his company’s debt and issued himself an $80,000 check to use as a down payment to buy a house in Orinda, prosecutors said.
His fraud scheme began to unravel in 2014, when he shut down his CardEx business and directed an employee to provide the accurate balances of the prepaid debit cards to the bank, prosecutors said. Safahi had previously told the bank that there was over $93,000 on the cards but the true balance was $2.7 million, of which he had fraudulently appropriated $1.5 million.
For the bank fraud count, Safahi faces up to 30 years in prison and a maximum fine of $1 million or twice the gross gain or loss amount. He was also convicted of four counts of wire fraud, which carries a maximum sentence of 20 years in prison and a fine of $250,000. For the money laundering count, Safahi faces ten years and a possible fine of $250,000.
The judge has not yet set a sentencing date.
I’m no genius, but how do you not know that this ends badly? How long do you think you could string this out?
Possible 30 years for bank fraud.
How much time does a drunk driver get for killing someone?
How much time does a pedophile get to raping a child?
That’s the difference between the Feds, and this upside-down state.
You are comparing one ultra horrible incident(s) to constantly defrauding people and banks for years. Not really a solid comparison.
Why would anybody in their right mind request a bench trial over a jury trial? A jury can sometimes be more sympathetic than a judge. Judges are less emotional and tend to be apathetic, they know the law, and are likely to hand down a stiffer sentence.
I’m guessing he comes across as a fairly unlikable guy. After serving on a jury, I said if I were guilty go with a jury, if innocent, go with a Judge. I was not impressed with a few of my fellow jurors.
Throw the book at ’em…. full extent of the law.
Most people look forward to their leisure years. He will have lots of leisure time but not doing things of his choice. Glad I chose a different, albeit honest, retirement plan.
The feds really wash people when you screw with money that they insure.