Identity theft continues to be a major problem across the country as scammers are creating schemes to steal the identifications and Social Security numbers of individuals in order to collect money for their own needs. Luckily, these fraudsters are being caught by the Department of Justice before prolonging their scams.
Earlier this month, Sang-Hyun Park pleaded guilty for being the leader of a criminal organization headquartered in Bergen County, N.J., that obtained, brokered and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud and tax fraud.
As part of this scheme, Park Criminal Enterprise obtained Social Security cards beginning with the prefix “586” that were issued to individuals, usually from China, who were employed in American territories such as American Samoa, Guam and Saipan. Park Criminal Enterprise sold the cards to its customers and then escorted the customers to various states to use them to obtain identification cards and driver’s licenses.
The organization then engaged in the fraudulent “build up” of credit scores associated with these fraudulently obtained identities by adding these identities as authorized users to the credit card accounts of various co-conspirators, who did not know the real person to whom the identity belonged to. By attaching the identities to these existing credit card accounts, the teams increased the credit scores associated with the identities to between 700 and 800.
After building the credit associated with these identities, Park and his co-conspirators directed and assisted his customers to open bank accounts and obtain credit cards. Park and his co-conspirators then used these accounts and credit cards to commit fraud. The DOJ said Park relied on several collusive merchants who possessed credit card processing, or swipe, machines and then for a fee known as a “kkang fee,” these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit card elated to these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their “kkang fee,” according to the DOJ.
Park admitted that he obtained and sold “586” Social Security cards to his customers and members of his criminal enterprise escorted more than 100 customers to various states so they could fraudulently obtain identification cards and driver’s licenses using the “586” Social Security cards and other fraudulent documents—such as counterfeit Chinese passports. Park also admitted he conspired with and paid cash to various “build up teams” to build the credit scores and establish credit histories for the fraudulent identities that he had sold to his customers.
In total, Park defrauded various credit card companies, banks, and lenders out of approximately $4 million. He and his co-conspirators also claimed more than $182,000 in tax refunds from the Internal Revenue Service through the filing of false and fictitious tax returns and accompanying documents.
Another man was recently sentenced to 12 years in prison for operating a credit card fraud ring that stole the identities of over 2,300 individuals in New York, New Jersey and Washington, D.C.
Jonathan Oliveras pleaded guilty on Aug. 10, 2011 to one count of wire fraud and one count of aggravated identity theft for using counterfeit credit cards encoded with stolen account information. According to court documents, Oliveras sent payments to individuals he believed to be in Russia for the stolen account information. Oliveras then distributed the stolen account information, which was re-encoded onto plastic cards and used to purchase gift cards, that ultimately was returned for cash.
When federal and local law enforcement officials conducted a search of Oliveras’ apartment in July 2010, they found credit card encoding equipment and more than 2,300 stolen credit card numbers. According to court documents, credit card companies have identified thousands of fraudulent transactions using the account numbers found in Oliveras’ possession, totaling more than $750,000. Oliveras also possessed 409 gift, debit or credit cards used as part of the scheme, which had a total stored value of $42,688.
To try to prevent identity fraud from taking place throughout the country, Clarity Services launched its Subprime ID Fraud Score three months ago. After more than a million reports have been run with this product, users are experiencing a four to five percent drop in credit default rates, said Tim Ranney, president and founder of Clearwater, Fla.-based Clarity Services.
The custom score and report addresses a variety of challenges faced in the subprime industry, including detection of those consumers most likely to use their own real identity to commit fraud in the application process, identification and return of the correct Social Security number for a consumer, determining if incorrect SSNs on an application are related to a harmless data entry error or a fraudulent attempt to obfuscate an identity, categorization of different fraud types to aid in the manual review process, and the identification of SSNs, cell phones, addresses, emails and employer phone numbers associated with a specific bank account.
“Clarity’s Subprime ID Fraud product provides us with strong insight into our applicants’ identity profile and history,” said Timothy Li, vice president of risk strategies at Think Finance. “This product quickly targets applicants that were previously undetected by our older tools. All of our products have since been converted to use the new Clear Subprime ID Fraud, and this product has a much better hit rate than the new product replaced.”
