Credit Card Fraud Scheme: 7,000 Fake Identities, $200 Million Stolen, 18 Charged

The FBI is calling this one of the largest credit card fraud schemes ever investigated

By on February 6th, 2013 10:55 GMT

The FBI has arrested 13 people and charged 18 for their role in a credit card fraud scheme which caused damages of at least $200 million (150 million EUR).

According to authorities, the suspects – aged between 31 and 74 – made up 7,000 fake identities which they used to obtain tens of thousands of credit cards.

They relied on sham companies, black-market businesses and even complicit organizations to achieve their goals. They also set up hundreds of bank accounts and over 1,800 “drop addresses” which they used as mailing addresses for the false identities they created.

The scheme involved a 3-step process. First, they make up fake identities by using fraudulent identification documents.

Then, they would “pump up” the credit of these fake identities by providing false information to credit bureaus. Finally, the crooks made large loans which they never repaid.

Despite the fact that they spent large amounts of money to support the scheme, the FBI says the fraudsters still made enough profit to buy luxury automobiles, electronics, expensive clothing and millions of dollars in gold.

During the raids, law enforcement found $70,000 (52,000 EUR) in cash in an oven.

Millions of dollars have been wired overseas to bank accounts set up in Romania, China, Japan, Canada, UAE, India and Pakistan.

“This type of fraud increases the costs of doing business for every American consumer, every day,” U.S. Attorney Fishman explained.

“Through their greed and their arrogance, the individuals arrested today and their conspirators allegedly harmed not only the credit card issuers, but everyone who deals with increased interest rates and fees because of the money sucked out of the system by criminals acting in fraud rings like this one.”

All the defendants are charged with one count of bank fraud. If found guilty, they could spend as many as 30 years behind bars and be forced to pay a $1 million (750,000 EUR) fine.

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