Global credit card fraud, tagged at $200 mn, driven by Indians: US

Feb 06 2013, 12:15 IST
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18 charged in $200 mn US Global credit card fraud. (Thinkstocks) 18 charged in $200 mn US Global credit card fraud. (Thinkstocks)
SummaryUS prosecutors say this is one of the largest credit cards fraud ever.

the United Arab Emirates, Canada, Romania, China and Japan.

The group used at least 7,000 fake identities to obtain more than 25,000 credit cards, Fishman said. Investigators documented $200 million in losses, but the figure could rise, he said.

“Through their greed and arrogance,'' Fishman said, the people arrested harm credit card companies, consumers and “the rest of us who have to deal with increased interest rates and fees because of the money sucked out of the system by criminals.''

Participants in the scam set up more than 1,800 mailing addresses, creating fake utility bills and other documents to provide credit card companies with what appeared to be legitimate addresses, investigators said. Once they obtained the cards, they started making small charges and paying off the cards to raise their credit limits, authorities said.

They then sent fake reports to credit rating agencies, making it appear that cardholders had paid off debts, setting the stage for sterling credit ratings and high credit limits, investigators said.

Fishman said once the credit limits were raised, participants would take out loans or max out the credit cards and not repay the debts.

He said those who obtained credit cards often added co-conspirators and sham businesses as authorized users, who could piggyback on high credit ratings and open other fraudulent accounts with high credit limits.

The group created at least 80 sham businesses that accepted credit card payments, Fishman said. It would run the fraudulently obtained credit cards through the machines, keeping the money, he said.

In one example, prosecutors allege a defendant used a 6-year-old boy's Social Security number to obtain a fake utility bill used to open credit card accounts.

The scheme funded a lavish lifestyle for the accused, including spa treatments, electronics, luxury cars and millions of dollars of gold, Fishman said. In one raid, authorities said they found $68,000 stashed in an oven.

Authorities allege one man withdrew and wired $1.5 million from personal accounts despite not having a job. They allege another defendant was linked to 12 false identities, stole $2.5 million from 464 credit cards and received $18,000 from two sham companies.

Three jewelry stores within blocks of each other in a heavily Indian section of Jersey City were closed Tuesday, and their inventory was seized. All had signs advertising gold jewelry. Their metal security gates were shut, and they were guarded by FBI agents.

Fourteen defendants appeared before a federal judge on Tuesday afternoon. Lawyers said one man was

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