Feds: Nassau Man Stole Millions In 'Bust-Out' Credit Card Scheme

VALLEY STREAM, NY—The U.S. Attorney’s Office for the District of New Jersey indicted a Nassau County man for what prosecutors dubbed a "bust-out" credit card scheme. Mohammad Mushtaq, 56, from Valley Stream, is accused of creating fake identities to obtain credit cards, ultimately charging millions in payments that were never repaid.

On Tuesday, Mushtaq was charged with one count of conspiring to defraud financial institutions, five counts of bank fraud, one count of access device fraud, and one count of aggravated identity theft.

According to a statement from the attorney's office, Mushtaq worked with co-conspirators to create identities with social security numbers and identifying information of real people, often minors, altered to create new "synthetic identities."

Mushtaq even used his own spouse and child's information, the federal prosecutors say, to create these fraudulent identities for credit card accounts.

In a so-called "bust-out scheme" perpetrators typically pay back the credit card debts long enough to increase lending and credit, and then eventually they make large purchases that are never paid back.

Mushtaq and his associates face up to 30 years in prison and a $1 million fine on the bank fraud charges, and additional penalties on remaining charges.