An international credit fraud ring racked at least $200 million in fraudulent charges to acquire luxury cars, gold and high-end goods, and funnel millions in cash overseas, federal prosecutors said Tuesday.
The elaborate scheme -- one of the largest ever uncovered by the U.S. Justice Department -- started small but eventually spread to 28 states and eight countries.
Prosecutors revealed the charges in a criminal indictment against 18 alleged conspirators and say they supported a massive network of co-conspirators that's expected to lead to more indictments.
The scam began in 2003 as false identities were used to create credit profiles with major credit bureaus, prosecutors say. Some were completely fictitious; others were created using Social Security numbers matched to someone with the same name. In other instances, fake pay stubs and tax returns were used to get credit cards.
Prosecutors say the accused pumped up their credit worthiness by making small purchases and paying off the charges, enabling them to run up credit lines and make large charges that were never repaid.
By 2012, they had created more than 7,000 false identities to obtain more than 25,000 credit cards. Millions in cash were wired to Pakistan, India, the United Arab Emirates, Canada, China and Japan.
"All the pieces of this scheme - fake names, identification, documents, credit scores - we've seen most of it before, but putting it all together at this level, with this kind of commitment, manpower, time and money, it may well be unprecedented,'' says Paul Fishman, U.S. Attorney for the district of New Jersey, where the case was filed.
Federal authorities, including the U.S. Postal Service, Secret Service and FBI, began working the case 18 months ago, Fishman said.
Losses are pegged at more than $200 million but are expected to grow.
"Due to the massive scope of the fraud ... loss calculations are ongoing, and final losses may grow substantially,'' James Simpson, a special agent with the FBI, said in a criminal complaint filed in U.S. District Court.
Source: USA Today | Gary Strauss and Christine Dugas