Defendants in counterfeit checks in tax rebates scheme want venue trial in OR

Two of the three persons facing charges in federal court for engaging in a scheme to deposit counterfeit checks into their bank accounts over $24,000 in tax rebates from the CNMI, have requested the U.S. District Court for the NMI to transfer the venue of this case to the District of Oregon.

Vancouver, Washington-based Brooke K. Phillips, through court-appointed counsel Mark B. Hanson, filed a motion for transfer of venue.

Oregon-based Larry Tagabuel, through court-appointed counsel David G. Banes, joined Phillips’ motion to transfer venue.

It’s not clear whether the third defendant, Kenatis M. Alafanso, also known as Nesdy, who is residing in Vancouver, also wants to join in the motion to transfer the venue.

The indictment charged Phillips, Tagabuel, and Alafanso with one count of conspiracy to commit wire fraud and 13 counts of wire fraud.

In Phillips’ motion, Hanson asserted that the location of his client and the potential witnesses, the expense to the parties, and the relative accessibility of the place of trial all weigh heavily in favor of transfer.

Hanson said none of the factors weigh strongly against transfer.

“We are dealing with a defendant who is a resident of a district thousands of miles away, an alleged scheme taking place entirely in the mainland with only slight contacts to the CNMI via the mails or the wires and particular hardship posed to a defendant forced to relocate to a faraway and unknown locale most likely leaving her young children behind,” the lawyer said.

Phillips, who was arrested in Oregon, was determined to be indigent. She was subsequently released on conditions and remains under the supervision of pretrial services in the District of Oregon.

Hanson said Phillips has lived in Vancouver and around that area for virtually her entire life, and has a 3-year-old son and a 5-month old daughter.

The indictment was returned in the CNMI and the case was transferred from the District of Oregon, where the arrests of the defendants were made, to the District of the NMI.

A jury trial is currently set for July 26, 2016 in the District of the CNMI.

Hanson said based on the allegations and the discovery provided thus far, it seems that most potential witnesses are located in the mainland U.S.

Hanson said all of the overt acts alleged in the indictment take place in Washington or Oregon state.

Hanson said all of the automated teller machines allegedly utilized in the scheme are located in Portland, Oregon or Vancouver.

Thus, he said, witnesses necessary to authenticate documents and other evidence are located much closer to the District of Oregon than the District of the NMI.

For Tagabuel, Banes said his location, the potential witnesses’ location, the expense to the parties, and the relative accessibility of the place of trial all weigh heavily in favor of transfer.

According to the indictment, sometime in 2015, Tagabuel received a CNMI tax rebate check for the 2014 tax year. The CNMI tax rebate check was mailed from Saipan to Tagabuel in Oregon.

Using a high resolution scanner, an unnamed co-conspirator scanned a copy of the CNMI tax rebate check and used the image to create counterfeit checks. Each counterfeit check was printed to resemble a legitimate CNMI tax check.

Each counterfeit check had a legitimate routing number, which was assigned to the CNMI government. Various counterfeit checks were printed and made payable to the three defendants, and others.

To further the scheme, the defendants opened individual checking accounts at various banks, including U.S. Bank and Bank of America.

The defendants would deposit the counterfeit checks purporting to be tax rebate checks from the CNMI into their bank accounts. They would wait for the counterfeit checks to clear their bank account.

After the checks cleared their account and the funds were made available, each defendant would make large cash withdrawals from various ATM and branch locations in and around Portland, Oregon, and Vancouver.

The defendants would share the profits obtained from their scheme with an unnamed co-conspirator in exchange for producing the fraudulent checks, according to the indictment.