Army National Guard Members Indicted in Fraud Schemes

WASHINGTON, DC — Four Army National Guard members from Maryland and Washington, DC, were indicted recently on fraud charges tied to stolen credit cards.

Authorities with the U.S. Attorney's Office for Maryland said the charges stem from a scheme to use Bitcoin to buy stolen credit and debit card numbers from foreign websites. The accused would then re-encode cards issued in their names with those stolen numbers, and then fraudulently buy items at Army and Air Force Exchange Service stores on military bases and elsewhere for use and resale.

The Guard members charged are: Derrick K. Shelton II, 28, of Washington, D.C.,; James C. Stewart III, 25, of District Heights; and Quentin T. Stewart, 28, of Parkville.

A fourth national guardsman, Vincent Anthony Grant, 27, of Laurel, was also indicted in a separate case involving a similar fraud scheme, officials said. The indictments were returned on May 9, and unsealed May 20 following the arrests of the defendants.

Shelton, James Stewart and Grant were specialists, and Quentin Stewart was a former sergeant, all in the District of Columbia Army National Guard.

Bitcoin is a digital currency that is not issued by any government, bank, or company, but rather is generated and controlled through computer software operating through a decentralized network. Bitcoin can be exchanged for other currencies, products, or services.

Prosecutors allege that from July 2014 to May 2015, Shelton, and both Stewarts, along with co-conspirator Jamal Moody and others, used Bitcoin to purchase stolen credit and debit card numbers of individuals and businesses from foreign websites.

They selected and purchased the stolen information of individuals and businesses with federal credit union accounts, and those with billing addresses in or near Maryland. The men reportedly bought magnetic strip card-encoding devices and software to re-encode credit, debit and other cards with the stolen credit and debit card numbers.

According to the indictment, the defendants used the re-encoded cards to buy gift cards, electronic items, and luxury goods, from AAFES stores on U.S. military bases, and other locations in Maryland and elsewhere. They used the merchandise themselves or resold the merchandise.

Prosecutors claim that from July 2014 to April 2015, Grant, along with Moody and others, engaged in a similar scheme.

Shelton, James Stewart and Quentin Stewart face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and wire fraud.

Grant faces a maximum sentence of seven and half in prison for conspiring to commit access device fraud.

All four defendants also face a mandatory minimum of two years in prison for aggravated identity theft, consecutive to any other sentence imposed

The defendants had their initial appearances last week and were released under pretrial supervision, except for Quentin Stewart, who is scheduled to have a detention Tuesday in U.S. District Court in Greenbelt.