In what is being called the largest identity theft case in U.S. history, the FBI and the U.S. Attorney charged three men with running an identity theft ring that impacted more than 30,000 consumers whose credit information was stolen and abused.
The U.S. Attorney's office in New York said to date, their investigation discovered more than $2.7 million in financial losses as a result of the ring's activities.
The case grew out of a hacking incident involving credit reporting agency Experian, whose database was accessed illegally last spring, resulting in the theft of personal information on 15,000 customers of Ford Motor Credit over a 10-month span.
Ford apparently was contacted by Experian in February of this year after the agency received numerous calls about unauthorized credit checks, which appeared as though they were made by Ford Credit's Grand Rapids, Mich., office.
The complaint unsealed Monday by the U.S. Attorney's office and the FBI charged Philip Cummings with wire fraud and conspiracy for allegedly taking part in the scheme.
About three years ago, Cummings was a help desk employee of Long Island, NY-based Teledata Communications Inc. (TCI), whose computers were used to obtain consumer credit information from the three commercial credit history bureaus - Equifax, Experian and TransUnion. He has been taken into custody and is charged with conspiring with others who were not named in the complaint to sell access to the Ford Motor Credit passwords and special codes for downloading the credit reports, the FBI said.
"With a few keystrokes, these men essentially picked the pockets of tens of thousands of Americans and, in the process, took their identities, stole their money and swiped their security," said James Comey, U.S. Attorney based in Manhattan.
The complaint said Cummings had access to confidential passwords and codes of TCI's clients and used them to access and download credit reports himself.
The charges detailed by the U.S. Attorney said that as of early 2000, Cummings agreed to provide credit reports to a co-conspirator (only known as CW, for cooperating witness). The complaint said "CW" knew individuals who were willing to pay up to $60 per credit report. It also said the individuals eventually would sell lists of social security numbers on the street.
Federal officials also charged Linus Baptiste with wire fraud, alleging that phone numbers registered to Baptiste's home was used to dial into Equifax's databases and download between 400 to 600 credit reports as part of the scheme.
The U.S. Attorney's Office and FBI also charged a man they said used the name Hakeem Mohammed with fraud after he allegedly used an address change made to a line of credit opened by two of the Ford Credit victims. He is also charged with opening credit accounts using the names and credit information of two of the Ford customers' names.
Among the activities that authorities said the ring took part in were the depletion of bank accounts holding tens of thousands of dollars in savings; thousands of dollars charged to credit cards without authorization; address changes made to accounts at various financial institutions; checks, debit cards, ATM cards and credit cards sent to unauthorized locations and assuming the identity of others.
"What we're seeing now is more and more sophisticated approaches to identity theft like this one," said Carl Pergola, a certified fraud examiner and director of the fraud investigation practice at consultancy BDO Seidman.
"ID theft has been around for a long time, in part because of its simplicity. But as electronic information becomes more available, we're seeing an outgrowth of organized gangs involved in stealing this information. And that's what identity theft is: theft of information."
Kevin Donovan, assistant director in the FBI's New York field office, said the defendants, using 21st Century and insider's access to sensitive information, "didn't even need a getaway car" after they pulled off their identity heist. "Using the same technology, we determined what was done and who did it, proving that technology is a double-edged sword."