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Big Breaks, Arrests in Several ID Theft Rings


Big Breaks, Arrests in Several ID Theft Rings

In Houston last week, raids were carried out by different state and federal agencies that put a halt to a large identity theft ring. Most of the arrests included multiple instances of credit card fraud. It was a big win for law enforcement, but it’s only one of several big rings that have been busted in recent weeks.

Watching Houses

In the Houston case, it was homes that were targeted by law enforcement as they sought to bring the criminals down. In fact, initially, they were watching two homes, only to learn that one had been abandoned. They learned later that the suspects had relocated to a different county in Texas, which meant other law enforcement agencies were brought in.

Those suspected in these crimes were being watched because of reports that they’d obtained several identities online and then quickly produced hundreds of illegal credit cards in those stolen identities that were used to make online purchases and cash withdrawals from several ATMs.

All of those arrested were Cuban nationals and were linked to another group of Cuban nationals who were arrested in 2011 in the same region. That first arrest included nine people. This latest arrest is an extension of that investigation.

During the raid, there were several hundred credit cards that were confiscated and even more “blanks” that were ready to have information applied to them. Several embossing machines, encoding devices and computers were also removed from the houses. Even equipment that placed the foil coating on top of the cards after embossing were found as well. More than $10,000 in cash and a few cars were also confiscated.

All of the suspects were males and they now face charges of engaging in organized crime, fraudulent use and possession of identifying information belong to others, money laundering, theft and credit card fraud. They are all in jail and bail was set at $400,000 for each suspect. Law enforcement officials said that their investigation continues and more arrests could be made at a later date.

Watching Boston

Meanwhile, in Boston, the brother of a man who is believed to run his own identity theft ring out of a commercial building in Boston proper was arrested last week. He was held on a $1,500 bond and in court on Monday, he pleaded not guilty for credit card fraud. He was arrested the moment he stepped off of an airplane arriving from Mexico. Both he and his brother were charged during an undercover investigation and the subsequent bust revealed what police say was a “massive operation” that included a number of financial schemes that ripped off tens of thousands of dollars from credit card consumers and even cell phone companies. The prosecutor is calling the crime ring the “new face of crime” during his press release this past Friday.

His brother was arrested earlier this month when he was caught buying counterfeit money. He also worked out of his home where he used stolen identities to open new mobile phone accounts and paid lackeys to buy smart phones at discounted prices that are offered by companies to lure new customers. They then took those phones and sold them at higher prices. Stolen credit cards were used during those transactions as well.

It’s not yet known how many victims there are in this case, but during the presser, both the district attorney and local police urged victims to come forward and encouraged residents to closely monitor their credit card statements.

Watching History Being Made

Many recall a huge crime ring bust this past February where it’s believed as much as $200 million dollars in credit card fraud was involved. More than 17 arrests have been made in that ongoing case. It brought to the forefront the importance of bank security and many security experts are encouraging changes in the ways banks monitor their own activity. Some are calling for greater reliance on “big data”.

In early February, federal law enforcement agencies arrested 13 people who are believed to be connected to the biggest payment card schemes in American history. The Department of Justice is overseeing the ongoing investigation and the arrests made later. The entire crime ring was built on fake identities and “fraudulent credit histories”. It involved many consumers in many states and later it was discovered it was an international effort.

The criminals also falsified information to establish creditworthiness with the credit bureaus and large loans were taken out that were never repaid by the fraudsters, according to court records that were unsealed days ago. All of the accused are believed to have moved millions of dollars throughout the fraudulent credit card and bank accounts. There were many wire transactions as well. So far, it’s believed 170 bank accounts were being used by the criminals and a host of shell companies have been discovered that allowed them to fly under the radar, so to speak.

Millions of dollars were wired to countries such as Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan, said authorities and due to the massive size of the investigation, it could be the 25,000 fraudulent credit cards could be the tip of the iceberg as loss calculations continue. Law enforcement has warned that the numbers could grow significantly and the losses could eventually hit the $200 million mark.

The investigation has been ongoing for close to two years and most of those arrested are now facing three decades in prison and fines of up to $1 million.

Up until recently, banks and other financial institutions have been reluctant to push the legal envelope, partly because of the international complications. It would require a lot of man hours from any of these banks, and frankly, they don’t have the numbers to justify such large scale efforts.

Still, these latest arrests and the continuing investigations are part of a new reality we all live in: the possibility that at any moment, any of us can find ourselves victims of identity theft. It’s highlighted the crucial realities that we all must take a proactive approach to ensuring our identities and ultimately our assets are safe.

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