Federal authorities on Monday unveiled charges against three men in what they said was the largest identity fraud case in U.S. history.
Private financial information on consumers across the United States–some 30,000 victims have been identified–was stolen by a ring of thieves that authorities said used pilfered corporate passwords to electronically access consumer data from the three major credit reporting bureaus.
For many consumers, the theft was the beginning of a nightmare that left their bank accounts drained and allowed crooks to run up thousands of dollars’ worth of fraudulent charges in the victims’ names, U.S. Atty. James Comey said at a news conference.
The case underscores that identity theft, considered the fastest-growing financial crime in the country, has reached epidemic proportions, said Carl Pergola, national director of fraud investigation services at BDO Seidman in New York. Roughly 40 percent of all consumer complaints logged at the Federal Trade Commission involve identity fraud reports, he said.
“With electronic access to data, and gangs focused on committing this fraud, it’s like giving [thieves] the keys to the vault,” Pergola said.
In a complaint unsealed Monday, the U.S. attorney’s office in Manhattan charged Philip Cummings, 33, with wire fraud and conspiracy. In addition, Linus Baptiste, 43, who was arrested in late October, has been charged with wire fraud in a related case, authorities said.
A third alleged conspirator, Hakeem Mohammed, was charged with mail fraud last month and has entered a guilty plea in connection with changing consumer addresses and opening accounts in the names of two of the victims identified in the scheme.
According to the complaint, the scam started more than two years ago, when Cummings worked for Teledata Communications Inc., a Long Island company that provides software and computer services to help banks and retail establishments access consumer credit reports online from the three big credit reporting agencies: Equifax, Experian and TransUnion.
In early 2000, Cummings was approached by an unnamed co-conspirator, who has since agreed to cooperate with authorities, according to the U.S. attorney’s office. The co-conspirator–identified only as “CW” in court documents–told the Teledata worker that he could get $60 for every credit report he supplied to a ring of thieves.
Cummings allegedly used his position as a computer help-desk employee to purloin passwords used by a variety of Teledata customers, including Ford Motor Credit Co., Washington Mutual Inc. and Community Bank of Chaska, Minn. With those passwords, he could get credit reports listing everything from mortgage information to credit card numbers and loan payment histories on thousands of consumers.
Authorities allege a theft ring of at least 20 people of Nigerian descent living in New York City participated in the scheme.
Armed with a laptop computer, Cummings allegedly masqueraded as one of Teledata’s corporate clients, pulling dozens of credit reports at a time, according to the complaint.
Authorities said the scam began to unravel earlier this year. Partly in response to a raft of complaints from consumers who said they had been victimized by identity fraud, officials at Ford Motor Credit began to review bills received from Experian for pulling credit histories of potential car buyers. The loan office said it did not request the credit reports in question.
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Experian also discovered that unauthorized requests for credit reports were being made by the dozens through calls.
Meanwhile, Equifax had discovered that a Washington Mutual affiliate in Crossville, Tenn., had been billed for 1,100 credit reports that the company said it did not request.
In September, TransUnion discovered that a corporate client was complaining that it had been billed for 4,500 unauthorized credit reports.
Authorities began tracing the requests through telephone records. In late October, FBI agents seized a laptop computer at CW’s New York address with Cummings’ name, lists of consumer names and Social Security numbers, numerous credit reports and a ledger showing amounts paid — and owed — to CW for the information.