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2-Year ID Theft Investigation Yields 86 Arrests; 25 More Sought
angry tapir writes with this bit from TechWorld: "Prosecutors call it the biggest identity theft bust in U.S. history. 111 bank tellers, retail workers, waiters and alleged criminals were charged with running a credit-card-stealing organization that stole more than $US13 million in less than a year-and-a-half. 'This is by far the largest — and certainly among the most sophisticated — identity theft/credit card fraud cases that law enforcement has come across,' the Queens County District Attorney's office said in a statement announcing the arrests."
The only way to make an honest buck in this economy is to steal it. The more crooked you are, the farther you'll go. Greed rules. Greed is good. (to paraphrase Gordon Gekko)
It's not theft, if you still have the ability to use the identity. I just made a copy.
What, why are so mad at me?
Okay. Sounds good.
How is that "identity theft"? Unless they stole the computers containing personal information? If so, was it encrypted?
Buying stuff I can understand. But renting a jet? That's just stupid! No wonder they were caught.
the banks do it every swipe, a little from you, a little from the seller and the CEO gets a 30 million dollar parachute and benefits
This significantly improves my opinion of banks. I knew that they were full of the kind of people who would hold the economy hostage and demand a bailout from the federal government because they were too big to fail. I knew they were full of the kind of people who would robo-sign documents fraudulently, sometimes causing families to be kicked out of their houses by mistake. I knew they were full of the kind of people who would convince working people to sign mortgages that the banks knew they could never repay, based on income information that the banks knew was fraudulent.
Now I find out that that isn't the only kind of person who works at banks. There are apparently some who aren't criminal masterminds, just workaday crooks. Small-time white-collar criminals who deal with Russian gangsters during the week to make an extra buck, but on the weekends go home and coach their kids' soccer teams. Very refreshing.
Find free books.
as long as identity has value.
We have too much identity. Alleged identity does not assure good intentions or good funds.
The powers that be have been incessantly pushing more identity on us and all it's done is create more identity theft and identity abuse (often from marketers).
We should be moving to chip and pin, a proof of knowledge scheme, rather than this nonsense based on numbers which must be kept secret from thieves but shared with the whole world to do business, and names, an information commodity passed around more than a joint at a Dead concert.
Why should a card be billed by name and number? Are either relevant to assuring funds transfer? No. The only thing which should matter is a positive response from the merchant's bank confirming funds transfer.
A user-friendly payment system would give the merchant neither the name of the person using the secure card nor any unique identifying number. The response should be either VALID $x.yy or INVALID.
Our current payment system was designed by bankers, marketers, and politicians, and it shows.
If it were designed by security experts this would not be a problem.
the subprime RMBS, the Credit Default Swap market.... those were trillions of dollars... a single CDO deal could be worth a billion dollars... and law enforcement some how did not "come across" it.
if you want to know why, three of the best books are Confidence Game by Christine S Richard and The Asylum by Leah McGrath Goodman and EConned by Yves Smith. Another good resource is the film Inside Job by Charles Ferguson.
white-collar law enforcement is flat out corrupted, with guys who head regulatory agencies going soft on big financial institutions, and then getting hired by those institutions a year or two later.
the Synthetic CDO market has been called the biggest ponzi scheme in history, by Janet Tavakoli (who wrote three textbooks on structured finance). and insiders in the industry, like Gregg Lippman of Deutschebank, called it similar names, as revealed by the Levin Coburn senate committee hearings. You can find books like Colossal Failure of Common Sense, by Lehman bond trader Lawrence McDonald (and Patrick Robinson) who flat out call CDS "gambling". and then there is Lang Gibson , high up in Merrill Lynch's CDO business, who wrote an entire book called 'Lost Trust' about it. Then there is Tetsua Ishikawa, who wrote a novel called "How I caused the Credit Crunch" - he was an ex-Goldman Sachs guy .
Now lets not even discuss the Commodity Index Funds, or how "someone in Washington" prevented Goodman's article in a trade journal that blamed the GSCIF for manipulating market prices of commodities, or the article in Harpers that said similar things. Also lets not even go into how JP Morgan and other bailed-out banks have bought entire warehouses to hoard metals (Copper being the one JPM was caught doing), or that the head of JP Morgan's commodities business is none other than Blythe Masters - who was on the original JPM team that invented Credit Default Swaps in the 1990s.
No. Let's go after the half-starving clerks and retail workers, many of whom cannot even afford to go to a doctor, in the richest country on the history of the planet. Yeah. those are the real 'thieves'. arent they?
As Goodman quotes a Trader in her book, about why the cops never go busting the massive cocaine deals going on in places like the New York Mercantile exchange... "[why would they want to get caught up in a shit show like that? Theyd rather be busting Pablo in Harlem]". the same principle applies to other financial crimes, like theft and fraud. Why would a regulator or cop want to get caught up in a shit show like that?
And fraud has been with us for a long, long time.
As the practices of the consumers have shifted (writing few checks, using less cash, increased credit/debit card use, on-line banking) the methods of fraud have shifted.
Unfortunately, the banks were able to also shift the "responsibility" for the fraud to the consumers.
If someone uses your identity to commit fraud then YOU are responsible for cleaning up the mess.
Even when YOU do not have any tools to PREVENT the fraud or even to be aware of it before the bank/store files a complaint against you.
I despise how these cases get treated as "identity theft" rather than "bank/CC fraud with a side of impersonation". An "identity" as it is presently constructed for financial purposes, is basically all public, or near-public information(much of it is public record, the rest is simultaneously treated as Super Secret Proof, and demanded, all the time, by basically everybody, because it is Super Secret Proof, which of course means that it is basically public, like SSNs and CC numbers...) It isn't the person whose "identity" is used to perpetrate a given frauds fault that financial institutions can't be bothered to actually verify transactions properly, although the poor bastards often get stuck with years of hassle for it anyway.
The notion of "identity theft" seems like nothing more than a cynical way to shift responsibility away from the responsible parties, and the parties who could do something about it(hey, Visa, don't want my CC getting cloned by anybody who manages to obtain the numbers visible in plaintext on the card, which have to be used to perform a transaction? Try cryptography...) and onto the suckers at the bottom of the food chain who, realistically, have very little control over the 'security' that a bunch of nearly public information connected to them is given by the large number of people who have access to it.
by CEOs and executives... which is every bit, exactly, as much stealing as swiping someones credit card. and it has gone unpunished... there is a book that came out recently about this.
then there were the Auction Rate Securities scams...
then there were the CLO based mergers and acquisitions, created only for profit of traders...
and on and on. the garden of fraud that blossomed from 1995-2008 is unprecedented in human history, and yet law enforcement wasnt able to "come across it".
the only people in jail are Bernie Madoff and that one hedge fund dude. Everyone else got away.
figure that one out.
take for example the French check-processing scandal that happened a few years ago.
the banks said "oh, we are transitioning from paper checks to electronic payments. we will need to hike fees a little bit to pay for this transition, it will be expensive, but eventually we will stop"
guess what. they never stopped. years after they had completed the transition. years after they had payed back their costs. they kept charging people fees for 'electronic conversion'.
sure, you can argue that everyone agreed to that. but that would be a lie. everyone did not agree to it. and everyone knows it was wrong. except, somehow, certain sociopathic types who do not have a conscience, or undersatnd the difference between right and wrong.
OMG! I've been saying this for years. Finally someone else has the same idea. Perhaps in another 20 years, a small subset of the general public might see it our way as well.
Absolutely, it's a blame-shifting term. When a bank sues you over non-payment of loans that you never applied for, it isn't because the bank is incompetent and loaned money to someone without knowing who they were. No, it's because someone "stole your identity" and thus, the bank knew exactly who it was making the loan to. So they did nothing wrong. It was all your fault when you failed to protect your identity from theft.
Same thing if they drain all the money from your account. The bank didn't screw up and give your money to someone else. Rather, someone "stole your identity," and so the bank did indeed give your money to you. So don't expect the bank to reimburse you for the money you lost. After all, they didn't make a mistake. It's your fault that you allowed yourself to be stolen. You should have been more careful.
The only agency I see referenced in TFA is the Queens DA. I'm guessing that this, by it's nature, would be interstate and therefor investigated by the US Secret Service. But I would expect the USSS to hand the case over to a US Attorney General for prosecution. I'll have to do some google-fu to get beyond the self aggrandizing release by the Queens DA to get a more complete story. There is no way he did this by himself. Kinda prickish not to mention the others involved.
-- I have a private email server in my basement.
generate a new random large number for handing off (via cut/paste, or whatever) to a vendor, which gives them a claim for x dollars from your account... once, or whatever schedule/limits you set.... and would only work for their account, nobody elses.
This already exists, it's called "ShopSafe". It's available for many credit cards including some Visa's.
The website creates a new credit card that links to your account, so that charges to this new card appear on your statement.
The new card has a limit which you choose, and an expiry date which you also choose (default: 2 months). Once a vendor charges to the card, no *other* vendor can levy further charges.
So for example, to purchase something online for $50, ask it to generate a new card for $70 (to cover postage and taxes and whatnot) with an expiry 2 months from now. Once the vendor charges the card, it's locked to that vendor and won't accept charges from any other.
I use it all the time for online purchases and haven't had a problem yet. Unfortunately, using one of these is against Paypal's TOS (according to them, verbally)(and yes, they will freeze your account for using one), so it won't work for eBay sales.
People on this thread keep pointing out that card users have no way to keep their "super secret" numbers safe, but this is one method that works quite well.
Search for "ShopSafe" on your card's web page to see if this is available for your card.
Yep.... and frankly, I think Bernie Madoff just wound up a "fall guy" for the whole thing because he happened to con a lot of Hollywood celebs out of their money, making his bust much more "high profile". Everyone tunes into E! television and finds out they finally "caught the guy who took all of John Malkovich's savings" and it makes a bigger impression....
FIS Global had $13 million stolen from a hack of their prepaid card business in a day and a half earlier this year. These people took a year and a half to steal the same amount.
http://krebsonsecurity.com/2011/08/coordinated-atm-heist-nets-thieves-13m/
Upper-level officers issue illegal mortgage loans, create multi-tranched securities (CDOs) and sell them while the clerks specialize in stealing identities. Kind of a "Crooks, Inc. - Leave your cash at the door."
This certainly would make it easier to justify something like the French Revolution: "Hang 'em all and let God sort 'em out!"
I haven't find the word "hacker" mentioned anywhere, since that was the mainstream definition for these people.
New Economic Perspectives
They got the wrong guys
Sometimes it's just too easy... Like the fact that until recently you could divert mail here in Denmark by simply filling out a form at the post office. No checks were performed and no notification were given at the old address. Fraudsters used this to intercept any mails the target shouldn't see while forwarding manually all other mail. This way the target never missed any mail and thus didn't suspect anything.
The postal service initially refused to accept that it could be a problem despite several cases using this trick, but has now updated procedures, so valid photo ID (drivers license, passport) is required to set up diversion, and the old address is notified. Credit card companies and banks now use fairly simple and logical steps to verify the identity of people ordering new credit cards. Some cards you can only have one of, some cards are not issued unless the (future) card holder confirm the card order using the phone number registered with the bank, and some require picture ID and a visit to a branch. Some require all of the above.
Same thing with loans, mobile phone subscriptions etc. - they require a drivers license or a passport to even start setting things up. Identity thieves will have fairly big problems obtaining such false documents, and due to the nature of these documents, getting caught with your hand in *that* cookie jar will net you a pretty severe punishment, much more than the fraud itself...
"For every complex problem, there is a solution that is simple, neat, and wrong." -- H.L. Mencken (1880-1956) --
Assuming everyone is getting an equal cut here they've each only made around $115,000 for a year-and-a-half's work. So ~$80,000 a year. Granted, it's not taxed and $80,000 is nothing to sneeze at, but that amount of money hardly seems to be worth the risk. If I'm going to be a criminal I want to be pulling in way more money than I could ever make if I just got a basic professional job. I would need something like $500k a year to make it worth the risk.
they don't "check" the maiden name supplied, they just record it on a per business basis
they use it later to confirm against what you supply originally.
I've never used my mothers maiden name, the person I suspect would be most likely to try and drain my accounts has the same mother as me.
every day http://en.wikipedia.org/wiki/Special:Random
Managing that much people is risky, expensive and difficult. I wonder what's the advantage of this method instead of collecting credit card numbers online.
We got hit with this--or something like it.
Come back from vacation and find a half-dozen credit cards opened in
our name, all with $1K-$2K already charged on them.
They were opened over a period of 48 hours,
across a swath of states over 1K miles from our residence.
Mostly MC/Visa; a few store cards.
One or two banks called our home number, and since we weren't there to confirm, refused to open the account.
The rest all opened the accounts and allowed the first-day charges.
We filed a police report and contested every charge.
There were some forms to fill out and a few phone calls,
but every bank "resolved the dispute in our favor",
they all notified the credit reporting agencies that it was fraud,
and the whole thing just went away over the next few months.
A few of the banks subsequently tried to sell us credit monitoring services
(meant to keep this kind of thing from happening) which I thought was
a bit slimy.
I am glad to see that someone who gets noticed has spoken out against the Cult of Steve Jobs and Apple. Yes, they have made some attractive products. Yes, they have been influential. But Apple is overly lauded and overpriced, and Jobs similarly so. I haven't been so annoyed by a celebrity's continuous eulogies since the death of Michael Jackson. That being said, I am not overly fond of RMS. Like many in the free software movement, he fails to find a way for programmers to be paid. I appreciate his GPL work, but wish he'd just grow up a bit.