An Andover man’s stolen identify led to the unraveling of an elaborate scheme that police say financed the luxe life of a Groveland woman and her housemates.
Investigators last week said Susan Yerdon, 46, of 19 Stonebridge Road, Groveland, financed her lavish lifestyle that included several luxury vehicles and a well-furnished house by defrauding at least 10 finance companies all over the country by setting up a series of sham companies.
The sham companies would then either borrow money from the finance companies or sell them what Yerdon purported to be accounts receivables for the phony firms, investigators say.
While neither Yerdon, who investigators say was the mastermind of the scheme, living in the Groveland home that they rented for $3,300 a month had jobs, the driveway was filled with luxury vehicles: a Mercedes E Class, a Cadillac Escalade, a BMW 328i, and two other cars. The home had all the latest appliances and, investigators say, was nicely furnished.
And Yerdon carried a pricey Gucci handbag.
It all began to unravel in January, when an Andover man started receiving threats of lawsuits against him from lenders looking for their money. It turns out that Yerdon had appropriated the man’s personal information to set up another phony company and obtain new loans.
She allegedly obtained that information from Michael Whitcomb, 54, of Haverhill, a used car salesman who had sold the Andover man a car and processed his auto loan — while also taking part in the scheme, prosecutors say.
The victim’s identity “was essentially destroyed,” said prosecutor Phil Mallard during Yerdon’s arraignment last week in Salem Superior Court, where she, Whitcomb and four others are facing a variety of conspiracy and fraud charges. All six have pleaded not guilty to charges stemming from what prosecutors say was a five-year scheme that netted at least $700,000.
Yerdon, along with another resident of the Groveland home, Vito Milone, 33, are each currently held on $100,000 cash bail. Whitcomb’s bail was set at $200,000, due to his past record and his alleged role in stealing the Andover man’s identity.
Mallard said Whitcomb also recruited a disabled veteran named Dennis Lopez, 60, to take several roles in the scheme, including providing his own personal information to obtain loans for the fictitious companies.
Lopez, who had a Section 8 housing certificate, also moved into a condo that Yerdon owned in Methuen — a condo that, despite hefty tax liens against Yerdon, could not be seized because she had declared it a homestead. Through the Section 8 program, the Newburyport Housing Authority, which had issued his certificate, paid $500 a month toward Lopez’s rent, which went to Yerdon, Mallard told the judge.
Lopez, despite being deemed eligible for the housing voucher, was able to buy a Cadillac from Whitcomb, said the prosecutor, through his work in the scheme.
Lopez, along with two others, Sean Yerdon, 24, and Jennifer Madore, 27, who lived with Susan Yerdon and Milone in Groveland and allegedly took part in operating what amounted to a boiler room in the home, are all free on personal recognizance in the case.
Yerdon paid close attention to detail as she created a virtual reality of non-existent employment agencies and fictional employees, forging payrolls and corporate books, opening bank accounts, printing up letterheads and business cards, creating email addresses, even creating fictional email dialogues between the fake employees. All of it was aimed at fooling the finance companies as they conducted “due diligence” investigations before loaning the money or buying up her supposed “accounts receivables.”
Yerdon allegedly used names like “Pro Factor,” “Pro Flex,” “Pro Force,” PFS, Argent and Quantum Staffing.
Some of the victims were traditional business lenders and others were engaged in “factoring,” buying up the accounts receivables of small businesses for 80 cents on the dollar, then collecting on the accounts — something they then couldn’t do in this case, because those “customers” did not exist outside of Yerdon’s computer and phones.
Several banks, including TD Bank, were also victimized in the scheme, Mallard said.
Investigators conducting a search of the home in February found a row of cellphones, each with the name of a different company or employee, lined up in the home, said the prosecutor.
To keep the money flowing, Yerdon would have to find new lenders or factoring businesses to provide money to make “token” payments to earlier lenders, similar to a “Ponzi” scheme.
Eventually, after running out of legitimate Social Security numbers from participants in the scheme, and burning through the credit ratings of those individuals, she turned to Whitcomb, who had sold her a car.
In addition to recruiting Lopez into the scheme, Whitcomb provided her with the Social Security number and other personal information of his customer, the Andover man, information that was used to take out another phony loan.
Lawyers for the six, who each were handed 33 CD-ROM discs of evidence last week, indicated in court that they are already in talks with the district attorneys office or will seek to discuss a possible plea with a judge over the next several weeks.