Organization was centered in south metro, stores were in central cities
Three south metro men who were part of an extensive operation that trafficked millions of dollars worth of stolen and fraudulently obtained mobile telephones and tablets were sentenced to a combined 27 years in prison and ordered to pay more than $3 million in restitution last week in U.S. District Court.
Earning the longest sentence was Kanan T. Mustafa, 40, aka Kenny, of Rosemount, who was sentenced to 12 years, 10 months for conspiracy to engage in interstate transportation of stolen goods and conspiracy to defraud the government with respect to claims.
Jamal Talal Mustafa, 43, aka Jimmy, of Apple Valley, the alleged ringleader of the operation, was sentenced to seven years, four months in prison, along with Nizer M. Mustafa, 29, aka Shaggy and Mike, of Savage, for the same charges.
Jamal and Nizer Mustafa were also order to pay an additional combined $44,000 in restitution to the IRS.
“These three brothers were high-level members of the Mustafa organization,” said acting U.S. Attorney Gregory Brooker. “The Twin Cities was the hub for their criminal operations, but the organization trafficked in millions of dollars in stolen cellphones and electronics across the nation and overseas. The strategic cooperation and collaborative work of our law enforcement partners, has dismantled this crime ring, and these three defendants, among other co-defendants, will serve lengthy prison sentences.”
The crime ring has been cited as an example of the growing problem of stolen and re-sold cellphones across the world in publications like “Wired” magazine and the stopcellphonetrafficking.com website.
According to the defendants’ guilty pleas and documents filed in court, from at least 2006 through 2014, Kanan, Jamal and Nizar Mustafa and other members of the Mustafa family and their associates used stolen identity information and other criminal means to obtain at least $20 million of cellular telephones and other mobile devices for the purpose of trafficking them throughout the United States and overseas.
Kanan, Jamal and Nizar Mustafa and three other Mustafa brothers owned and operated 13 mobile device stores in the Twin Cities metropolitan area, including those in Minneapolis, St. Paul, Robbinsdale and Columbia Heights, which were used to buy illegally obtained mobile devices.
The organization paid runners to steal mobile devices or obtain them fraudulently using stolen identification documents. They re-sold the stolen phones and tablets for substantial profits that were then distributed among themselves and used to pay for rent, utilities, payroll and other expenses to keep their stores in business and promote the criminal activity.
The three Mustafa brothers and the organization falsified loan applications and provided false documentation to get loans for vehicles that they used to transport stolen devices and the proceeds of their criminal activity.
They also made fraudulent credit card transactions to steal from credit card processing companies and used the proceeds to buy more cellphones, to pay operating expenses for the wireless stores, and to fund their personal expenses.
From at least 2010 through 2014, the brothers and the organization also conspired to defraud the IRS through numerous fraud schemes.
For example, the defendants regularly paid themselves in cash, failed to file tax returns, filed false claims for tax refunds, failed to maintain financial business records, and prepared false W-2s or did not prepare W-2s at all.
Police departments in Edina and Plymouth were among the agencies credited with helping to bring down the crime ring.
The University of Minnesota Police Department was also credited as it investigated the prevalent problem of stolen cellphones on campus.
“This investigation was truly a coordinated effort by several members of law enforcement and the U.S. Attorney’s Office to bring this criminal organization down,” said acting special agent in charge Hubbard Burgess of the IRS Criminal Investigation, St. Paul Field Office.
“This case is about more than cell phones being stolen. It is about a complex crime ring stealing identities and people’s good names for criminal gain,” said St. Paul Police Chief Todd Axtell. “The collaborative work that went into investigating, indicting and bringing these individuals to justice is impressive and will likely prevent much more crime in the future, which will protect others from becoming victims.”
To date, all 21 members of the conspiracy have entered guilty pleas. Twenty of the 21 defendants have been sentenced.
Tad Johnson contributed to this story.