A federal jury convicted Daren Gadsden on charges related to conspiracy in a scheme to steal approximately $1.4 million from a Housing Authority of Baltimore City bank account.
According to evidence presented during the six-day trial, Gadsden transferred funds from the HABC bank account to an account he set up with co-conspirators.
Gadsden was a landlord who owned a Baltimore property that was rented to a low income individual whose monthly rental payments were paid by the HABC directly to Gadsden’s bank account.
The fraud scam all started in late 2009 when Gadsden asked a bank how to make electronic transfers to and from his account. Subsequently after this occurred, the Housing Authority lost a few thousand dollars when a series of unauthorized electronic transfers debited funds out of the agency’s account and into Gadsden’s bank account.
When HABC officials confronted the defendant about this situation, Gadsden denied the allegations but paid the Housing Authority $1,400 to cover some of its losses.
However, the scam did not end there. From early 2010 through September 2010, Gadsden conspired with Tyeast Brown, William Darden and Keith Daughtry, to execute a larger scheme to defraud the HABC. Together, the group opened a bank account in the name of Keith Daughtry Contracting LLC. Court evidence revealed that Gadsden registered the fraudulent entity with the state of Maryland under a different name that was misspelled and provided a mailing address that was actually a mailbox rented by the conspirators at a commercial mailing store.
According to witness testimony, beginning in July 2010, Gadsden and his co-conspirators electronically transferred funds from HABC’s bank account and into the Keith Daughtry Contracting LLC account. The group then drained the stolen Housing Authority funds from the Keith Daughtry Contracting account by electronic transfers into accounts at other banks, in-person cash withdrawals, and from automated teller machines.
In addition, the conspirators electronically transferred funds from the KDC account onto debit cards in the names of other individuals without their consent.
Gadsden also tampered with evidence after he was contacted by an FBI agent by deleting the contents of at least two email accounts that were provided as the points of contact for certain debit cards he opened using stolen identity information.
Gadsden, who is scheduled to be sentenced on Oct. 24, could face 30 years in prison and a $1 million fine for the bank fraud conspiracy. He also could be charged two years in jail for aggravated identity theft as well as 20 years in prison for one count of evidence tampering.
The other three conspirators already pleaded guilty for their roles in this scheme. Daughtry and Brown were sentenced to 41 months and three years in prison, respectively, and ordered to pay more than $1.39 million in restitution. Darden is expected to be sentenced later this year.
The $1,399,700 in taxpayer funds stolen from the Baltimore City Housing Authority was supposed to be used to provide housing, not to line the pockets of criminals,” said Rod Rosenstein, U.S. Attorney for the District of Maryland.
