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The Resource Center Identity Theft & Protection | post

Never Underestimate the Ingenuity of Identity Thieves

by Steve Schwartz on

Let me introduce myself — I'm Steve Schwartz. I have been here at Intersections for almost ten years now and, like my friend and colleague Joe Mason, I have been on the front lines of the fight against identity theft. I have seen how our knowledge of identity theft, how to combat it, and how to recover from it has grown over the years. Every day, I too see the flow of reports and information revealing the latest breaches, the latest arrests, the stories of the latest victims of identity theft.

I had the pleasure of working with Joe as he researched and wrote his child identity theft book Bankrupt at Birth. For the past six months, I have looked forward every week to reading Joe's blogs. I know how informative and valuable they have been.

Now I am taking on the responsibility of continuing what Joe started. It is something I look forward to and I hope you will continue follow me to hear the latest about all aspects of identity theft.

From time to time in his blog, Joe remarked on the ingenuity of identity thieves in devising ways they can monetize their illegal activities. I, too, share his concern.

The latest example comes from New York where Preet Bharara, the U.S. Attorney for the Southern District of New York, announced the arrest of a fraud ring that allegedly collected "at least $8 million" using the stolen identities of over 1,000 people, 450 of who were active-duty or retired U.S. military personnel.

How they made that $8 million-plus is unusual — in fact, almost unique.

You probably remember the "900" telephone numbers here in the U.S. where the caller is charged so much a minute plus a connection fee when they dial. These numbers are disappearing here, but internationally the same kind of pay-to-dial numbers exist — called "premium" numbers. According to U.S. Attorney Bharara this is how the fraudsters operated.

Using the stolen identities, they established fraudulent cell phone accounts with major U.S. carriers like AT&T or T-Mobile. At the same time they set up front companies internationally and obtained premium numbers that charged $1 or more a minute to be called. They then took the SIM cards for the new accounts, put them in cell phones, and started dialing.

According to the Justice Department: "The premium numbers — the equivalent of 900 numbers in the United States — charged significant connection fees of as much as $1 per minute that the international carrier then charged to U.S.-based cellular providers such as AT&T and T-Mobile. While the U.S. provider would normally bill subscribers for the calls, in this case the U.S. provider was forced to pay for the calls because the accounts were registered to identity theft victims. The international carrier provided a share of the fees to the holders of the fraudulent international premium telephone numbers, who are believed to be the members of the fraud ring."

Carriers like AT&T and Deutsche Telekom (T-Mobile) were left with the losses, the Justice Department said.

"Amadou Dia (the alleged bad guy) and his co-conspirators dialed for dollars — many millions of them — by stealing countless identities, including hundreds belonging to U.S. military personnel, and racking up international phone bills in their names that left telecom service providers holding the bag," U.S. Attorney Bharara states in the Justice Department announcement. Identity theft is an epidemic of global proportions and we are bound and determined to identify and prosecute those who engage in this illegal conduct."

Dia, 49, of Manhattan, is charged with one count of conspiracy to commit wire fraud, which carries a maximum of 20 years in prison, one count of conspiracy to commit identity theft, which carries a maximum sentence of 15 years in prison, and one count of aggravated identity theft, which carries a mandatory minimum of two years in prison.

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