Two Omaha men federally indicted in bank, securities fraud scheme

Two Omaha men were federally indicted last week for their alleged participation in a check fraud scheme involving nearly $290,000 in forged business checks deposited at financial institutions across Nebraska and elsewhere.

Federal prosecutors on Friday unsealed an eight-count indictment against Calvin Carter, 20, and Malik Washington, 26, alleging criminal conspiracy, bank fraud and production of counterfeit securities. The two men are accused of attempting to cash at least 60 counterfeit checks totaling at least $291,000 at various banks and credit unions between April 2021 and December 2022.

The federal indictment is in addition to state charges filed last year against Carter and Washington alleging forgery and criminal conspiracy. The time frame listed in the indictment indicates that the men allegedly continued to perpetuate or aid in the fraud while out on bail awaiting trial in Douglas County Court.

State charges against Carter and Washington will likely be dismissed later this week, Douglas County Attorney Don Kleine confirmed Tuesday. Crimes involving bank fraud are typically under the jurisdiction of the federal government.

"This is not state court," U.S. Magistrate Judge Susan Bazis said to Washington at an initial hearing last week. "You're in a whole different ballgame."

According to court documents, communications found on seized devices indicated that Washington, Carter and other associates would place advertisements on social media offering $1,000 to $3,000 to anyone with a bank account. People who agreed to participate would supply the men with their debit cards, PIN number and online banking credentials.

Members of the alleged conspiracy would deposit forged business checks into the accounts and remove all of the funds via gift card purchases, ATM withdrawals and electronic transfers before the check could be flagged as fraudulent. Electronic evidence suggests that "several dozen" people were involved in the scheme.

The Sheriff's Office began investigating the case in February 2022 after First National Bank of Omaha reported losing approximately $36,000 in two months from a series of similar forged checks, according to court documents. Twelve fraudulent business checks were deposited into seven different FNBO accounts throughout December 2021 and January 2022. The checks ranged from about $3,000 to $7,000 and were either distributed at FNBO branches or through the bank's mobile app.

FNBO's app allows account holders to take photos of checks to deposit money electronically. According to the affidavit, the app captures the IP address and physical GPS coordinates of each device used to upload photos of a check. The GPS coordinates captured when the fraudulent checks were deposited, leading investigators to a northwest Omaha home occupied by Carter.

A search warrant was served on the home in February 2022. In Carter's bedroom, deputies found hundreds of pages of blank check stock, a safe monitored by a security camera, a shredder with a bin full of shredded checks and receipts for thousands of dollars worth of designer clothing and shoes, according to court documents. They also seized Carter's phone and laptop, which allegedly provided additional evidence of text communications with co-conspirators and check printing software on his computer.

Carter was arrested after the execution of the search warrant and was charged with forgery and criminal conspiracy. He posted bail and was released shortly after his arrest.

Carter's arrest did not mark the end of the investigation. In June 2022, FNBO again contacted the Sheriff's Office to report an additional loss of more than $82,000 from forged checks that looked identical to those allegedly forged by Carter. Those checks, deposited between March and June 2022, purported to be for payroll from a business called "The Standard."

ATM cameras captured photos of the man who deposited the checks, and deputies identified him as Washington, according to court documents. A search warrant executed at Washington's home did not locate any check forgery equipment, leading deputies to believe that someone else was supplying Washington with checks and directing him to deposit them.

Washington was arrested in June 2022 and charged with forgery and criminal conspiracy in state court. At the time of his arrest, Washington was in possession of six debit cards not belonging to him, according to an arrest affidavit. He also posted bail and was released from jail shortly after his arrest.

Washington was the first to appear in federal court last week, where he entered not guilty pleas on all counts and was ordered by Bazis to be released ahead of trial. Carter also pleaded not guilty during his initial appearance Tuesday and was ordered to be released from custody.

Both men face decades in prison if convicted on any of the eight charges. They are both named in each count of the indictment, which includes one count of conspiracy, five counts of bank fraud and two counts of possessing a counterfeit security. The conspiracy and bank fraud charges each carry a maximum sentence of 30 years in prison and a $1 million fine, and the counterfeit security count is punishable by up to 10 years in prison and a $250,000 fine.

Kleine said the Douglas County Attorney's Office is considering pressing charges against others involved in the scheme. At least one person, Carter's brother, is currently facing felony charges related to the fraud in Douglas County Court.