3 charged in scheme to deposit counterfeit checks in tax rebates want to plead guilty

The three defendants facing charges for engaging in a scheme to deposit counterfeit checks, supposedly representing over $24,000 in tax rebates from the CNMI, into their bank accounts, wish to plead guilty to at least one of the charged offenses.

Defendants Brooke K. Phillips, Kenatis M. Alafanso, and Larry M. Tagabuel have also consented to the disposition of the case in the U.S. District Court of Oregon.

Assistant U.S. attorney Russell H. Lorfing, counsel for the U.S. government, submitted before the U.S. District Court for the NMI on Tuesday defendants’ consent to transfer the case.

The defendants earlier requested the U.S. District Court for the NMI to transfer the venue of this case to the District of Oregon.

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

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

Alafanso, 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.

The defense lawyers asserted that the location of their clients 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.

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.

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.