Feds Bust Huge Credit Fraud Ring

Authorities say they've broken up one of the biggest credit card fraud rings in U.S. history. The group stole more than $200 million by creating fake identities and opening thousands of card accounts.

Copyright © 2013 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

STEVE INSKEEP, HOST:

We're also tracking a story that federal authorities call one of the biggest credit card fraud rings in U.S. history. Eighteen people are alleged to have created an elaborate web of fake identities and sham companies to steal hundreds of millions of dollars.

NPR's Dan Bobkoff has more.

DAN BOBKOFF, BYLINE: To give you a sense of the scale of this fraud, let's start with some numbers. The fraud lasted at least six years. The 18 people allegedly created 7,000 fake identities. They used these to open 25,000 credit cards. And, all told, they stole at least $200 million from credit card companies.

Paul Fishman is the U.S. attorney for the district of New Jersey.

PAUL FISHMAN: It was an extraordinarily sophisticated scheme at every level.

BOBKOFF: Elaborate is an understatement. Fishman says the defendants created false identities, complete with things like utility bills. At first, the fraudsters would boost the credit scores of the of the fake names by responsibly making payments on the cards. Then, they'd make fraudulent purchases through dozens of sham companies or took out large loans on the cards.

FISHMAN: Schemes of this magnitude are pretty breathtaking.

BOBKOFF: Credit card companies took the direct hit, but experts say the losses could be passed onto consumers, in the form of higher interest rates.

Bill Kresse heads Saint Xavier University's Center for the Study of Fraud and Corruption. He says this case shows a breakdown of the system.

BILL KRESSE: There are only so many credit card companies and banks and issuers, you would think at some point someone would have picked up the pattern of all these phony transactions.

BOBKOFF: But before authorities put a stop to it, the ring managed to send millions to eight countries including Pakistan, Romania, India and Japan. And, many profited nicely at home with fancy cars and electronics. Prosecutors say one suspect had $68,000 in his oven.

Dan Bobkoff, NPR News, New York.

Copyright © 2013 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

Support comes from: