Massive Int’l Credit Card Scam Bust


At least 18 people have been arrested in what the FBI is calling an international credit card scam that’s so far stolen at least $200 million.

The crime scheme, reports federal agents, is based in New Jersey and the 18 currently charged (more arrests are expected) are said to be responsible for widespread credit card scam that so far is expected to cost credit card companies more than $200 million. That number could rise. The intricate scam was revealed on Tuesday in Newark by the U.S. Attorney for New Jersey, Paul Fishman. His announcement told of the conspiracy where it’s believed more than 7,000 identities were created or stolen to further the efforts of the thieves. Money was traced to countries such as Pakistan and the UK going back as far as ten years. This is a massive win for federal agencies in those countries and others where money was funneled.

Consumer Fraud

Fraud is growing at an alarming pace. Specifically, consumer financial fraud is presenting big problems not only in the United States, but around the world as well. The Federal Trade Commission reports that consumers have lost more than $1.5 billion due to scams and frauds over the past twelve months. Those numbers are expected to increase in the coming years.

Along with the international angle, it’s believed the fraud extended into at least 30 states here in the U.S., making it one of the biggest busts on U.S. soil. This, according to the U.S. Department of Justice also includes 13 arrests so far with more expected in the coming days. Of those 13 in custody, most if not all, have ties to Pakistan and if they’re convicted, each could face up to three decades in prison. The bust included coordinated efforts from hundreds of law enforcement officials – both here and overseas – along with federal agents and investigators with the U.S. Postal Service.

Those who are in custody have already appeared in front of a U.S. Magistrate judge in a federal courtroom in New Jersey. Some could make deals with prosecutors to avoid lengthy trials and perhaps even prevent deportation. It’s also believed that most have familial ties here in the states and it’s believed at least a few of the accused are related to one another as well.

Sealed Complaints

Part of the presser held on Tuesday included the announcement that the complaints are sealed and will likely remain that way for some time. Because there are still more arrests expected and because of the international angle, releasing too much information could jeopardize the ongoing investigation. What was released, however, was limited facts of how the scheme worked.

Fake identification was created, including driver’s licenses and even utility bills to prove addresses identities and substantiate the false IDs to unsuspecting retailers, dealerships and credit card companies. Once that was established, the thieves could then apply for credit cards in the false names. They were also free to take out loans, buy cars and RVs and even homes. Clearly, they weren’t concerned with those risky purchases – nor the potential of being memorialized on some video camera.

It’s believed more than 25,000 fake credit cards were applied for and received by those 7,000 fake identities. It’s not yet clear how many driver’s licenses and social security numbers were stolen or whether or not they were simply created using the names of deceased people. In another alarming twist, with the identities that were stolen, the thieves were able to access credit reports and if the histories were weak, they would “doctor” the reports, including padding the incomes and erasing the less than ideal credit accounts.

In those instances where the credit cards were created using new identities, they were able to edit them to make it appear they had credit histories. It’s not known, or if it is, it’s not being reported, how they were able to pull that off with the three credit bureaus. Depending on how that plays out, it could reveal big problems in the way credit reports are compiled, maintained and released.

The criminals would then simply max out the credit cards and go on about the business of reaping the material benefits of their criminal activity. The repercussions of the fraud landed square on the shoulders of banks and credit card companies. Because most credit card companies have zero fraud liability for cardholders, the millions stolen won’t affect those cardholders.

Increases the Costs

While authorities know which credit card companies were targeted, they’re not releasing those details. A member of the prosecutorial team told the press,

This type of fraud increases the costs of doing business for every American consumer, every day…through their greed and their arrogance, the individuals arrested today and their conspirators allegedly harmed not only the credit card issuers, but everyone who deals with increased interest rates and fees because of the money sucked out of the system by criminals acting in fraud rings like this one.

Willing Victims

In another interesting revelation, there were several involved who knowingly allowed others in the crime ring to access their credit reports and identities. Most of these live in New Jersey. Along with the arrests, more than $68,000 and millions in gold was seized during the raid.

Because this has been such a long investigation, there were arrests made in recent months and in those cases, most plead guilty with the hopes of getting lighter sentences. They’ve told stories of converting stolen goods into cash, which was used to pay for lavish trips, spa treatments, electronics, designer clothing and, of course, gold. They are also turning on their co-conspirators. According to reports, they were able to provide information on where the credit cards were ditched, where cash was stashed and information on the criminals that had yet been arrested.

It’s not clear the timeframe law enforcement is looking at to bring in the remaining individuals who have arrest warrants waiting, nor is it clear if there will be arrests in other countries.

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