Saturday, November 23

Buffalo Business Owner Admits to $3.5 Million Fraud Scheme Involving Stolen Identities

(WNY News Now) – Rochester, NY – A Buffalo businessman has pled guilty to an extensive fraud operation that leveraged stolen identities from clients to secure millions in fraudulent loans. Paul Paredes, 53, pleaded guilty in federal court before Chief U.S. District Judge Elizabeth A. Wolford to charges of wire fraud and aggravated identity theft, crimes that may result in up to 20 years in prison and a fine of up to $250,000.

Assistant U.S. Attorney Katelyn M. Hartford, who is handling the case, stated that since 2013, Paredes has owned J&E Business Consulting LLC, which provides services to client businesses, including acting as a broker between the credit card processing companies and smaller retail businesses. Small businesses provide J&E with their financial information, such as the owner’s identifying information, including driver’s license, social security number, and email, as well as bank account information.

Between April 2019, and August 2023, Paredes submitted hundreds of fraudulent financing applications to dozens of lenders under the identities of his business customers (victims), for goods and services allegedly provided by Paredes, with the funds payable to bank accounts controlled by Paredes. These financing agreements were prepared in the names if victims, using their personal information, and without their knowledge, consent, or authorization. After a financing agreement was approved, money from the victim lender was deposited into one of numerous bank accounts controlled by Paredes, who used the money he obtained from the scheme to fund his personal expenses, pay salaries and operating expenses, or to make payments to victim lenders to avoid detection of the fraudulent loans. By making those payments to the victim lenders, Paredes was able to continue making similar fraudulent financing agreements with multiple victim lenders without discovery. To further avoid detection, on occasions when victims received communications from victim lenders about the fraudulent financing agreements, Paredes misled them about the purpose of the communications and told them he would handle it.

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Paredes used the identity of at least 63 individuals to defraud at least 23 victim lenders, utilizing at least 12 different bank accounts and moving the money he obtained from the scheme throughout different accounts. Paredes submitted false loan applications from Rochester, NY, to the out-of-state lenders located throughout the country, including in New Jersey, Virginia, Illinois, Texas, North Carolina, Florida, Washington, Pennsylvania, Iowa, Colorado, and Minnesota. The total loss amount is at least $3,500,000.

The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Matthew Miraglia, the Internal Revenue Service, under the direction of Special Agent-in-Charge Thomas Fattorusso, and the New York State Department of Financial Services-Criminal Investigation Bureau, under the direction of Superintendent Adrienne A. Harris.

Sentencing is scheduled for April 29, 2025, at 2:30 p.m. before Judge Wolford.Sentencing is set for April 29, 2025.

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