Marina del Rey Man, 49, Charged with Bank Fraud

A 49-year-old Marina del Rey man and two other men were charged Monday in federal court downtown with bank fraud and other charges for allegedly runnning a credit card scheme that resulted in an estimated $600,000 in losses.

Johnny Stewart, 49, of Marina del Rey, has been charged in U.S. District Court in Los Angeles along with Dexter Hardy, 45, of Los Angeles County and Clayton Stewart, who also is known as "Douglas Blackburn," 45, of Bellflower. The three defendants were arrested in February by special agents with IRS-Criminal Investigation and inspectors from the U.S. Postal Inspection Service.

A federal grand jury last week returned a 26-count indictment against the trio charging them with conspiracy, bank fraud, access device fraud, aggravated identity theft and money laundering, according to a statement from the IRS. Access device fraud is a legal term that refers, in this case, to the use of a credit card, said U.S. Assistant Attorney Ronald Cheng, but it can also refer to using an account number or other type of card for fraudluent means.

All three pleaded not guilty Monday and remain in federal custody, said Linda Lowery, a spokeswoman for IRS-Criminal Investigation. Their next court appearance is scheduled for April 24 before U.S. District Court Judge J. Spencer Letts.

Authorities allege that Johnny Stewart, his brother, Clayton Stewart, and Dexter Hardy contacted Chase Bank, Bank of America, Capital One Bank and other institutions and requested credit cards be sent to addresses they controlled using real and fake names and fictitious businesses. They then allegedly used the credit cards to make unauthorized withdrawals and purchases with losses estimated at $600,000.

The indictment alleged that the Stewart brothers further created sham businesses to open merchant processing account and bank accounts. The Stewarts allegedly processed fraudulent transactions with credit cards they had obtained from Chase and made withdrawals and transfers from the sham accounts. Individual transactions charged in the indictment ranged from $103 to $6,400.

Clayton Stewart in February 2008 pleaded guilty to a similar credit card scheme and was sentenced in U.S. District Court to 37 months in federal prison. He was released from federal custody in September 2010.

All three defendants are charged with bank fraud conspiracy and one count of access device fraud. Johnny Stewart is additionally charged with five counts of bank fraud, one count of aggravated identity theft, four counts of money laundering and money laundering conspiracy. Clayton Stewart is additionally charged with three counts of bank fraud, one count of aggravated identity theft, six counts of money laundering and mone laundering conspiracy. Hardy is additionally charged with four counts of bank fraud.

If convicted of the fraud charges, the maximum sentence each defendant could receive is 292 years for Johnny Stewart, 252 years for Clayton Stewart and 160 years for Hardy.