Prison Inmate Seems to Have Orchestrated $11M Fraud using Cellphone

A US prisoner, who was caught using a hidden cellphone to commit an $11 million scam from his cell, has been officially charged.

On June 8, 2020, an individual who identified himself as a film producer and philanthropist Sidney Kimmel phoned Charles Schwab by phone, claiming to have uploaded a wire disbursement form using the firm’s secure email system.

The only difficulty was that the call appeared to originate from jail. Still, the caller made comments about a transfer verification inquiry his wife had made earlier in the day – a task said to have been carried out by a female conspirator.

Imposter sets up accounts

The person who is said to have posed as Kimmel contacted a Schwab customer service representative three days earlier – on June 5, 2020 – and asked about opening a checking account. The customer service representative told the person that they would need some form of identification and a utility bill.

On June 6, someone is accused of providing a picture of Kimmel’s driver’s license and a Los Angeles Water and Power utility bill.

Documents filed by the US Attorney’s Office in the Northern District of Georgia say that someone uploaded documents to an online account. The documents were a request for money to be wired to an external bank and a forged letter of authorization. Both documents appeared to be signed by Kimmel.

Schwab, a financial company, sent $11 million from Kimmel’s account to a bank account for Money Metal Exchange, LLC on June 9th after confirming that Kimmel had authorized the transaction. Money Metal Exchange is a company that sells gold coins and other precious metals.

The real Kimmel had no knowledge of the fraudulent purchase of 6,106 American Eagle gold coins. The individual who orchestrated the purchase is alleged to have hired a private security firm on June 13, 2020, to transport the coins from Boise, Idaho, to Atlanta, Georgia. Three days later, an associate of the fraudster allegedly took possession of the coins.

Arthur Lee Cofield Jr. was incarcerated in a maximum security prison in Butts County, Georgia, while he allegedly masterminded the crime. Cofield is serving a 14-year sentence for armed robbery and is also indicted in Fulton County, Georgia, for attempted murder.

Prison phones are not only for family

The day after the coins were purchased, prison staff searched Cofield’s cell and found a hidden blue Samsung cellphone. The prison forensic unit determined that Cofield had been using an account on the free voice and messaging service TextNow to make calls to Money Metals Exchange.

On December 8, 2020, a federal grand jury charged Cofield and two co-conspirators with conspiring to commit bank fraud and money laundering. Sadow requested that the cell phone evidence be suppressed on Fourth Amendment grounds, arguing that the warrantless search by prison officials was unrelated to the legitimate function of prison security and maintenance.

Despite Cofield’s protests, the government insists that he does not have the right to contest the search of his cell phone because it contains contraband. They claim that he has no “legitimate expectation of privacy” in its contents.

The judge overseeing the case sided with the government and said that the case can go to trial. The judge wrote in her recommendation, “Neither Supreme Court nor Eleventh Circuit precedent recognizes an inmate’s expectation of privacy in contraband he possesses while detained.”