Eighteen members of a sophisticated fraud ring operating out of New Jersey were arrested in early February for their massive scam creating thousands of fake identities, obtaining credit and increasing credit limits for the fake identities, and then cashing in with a bust-out attack. The Department of Justice has documented $200 million in losses and continues to investigate.
The fraud ring obtained 25,000 credit cards using 7,000 false identities. The fraudulently obtained credit cards were then used to make purchases from at least 80 different shell businesses, but not before the fraudsters tried maximize the amount they could monetize from each card. Lower-level fraud ring members setup some 1,800 mailing addresses to create fake utility bills and other documents to make the identities and addresses seem legitimate. After receiving the credit cards the fraud ring also spent several months making small purchases and paying them off in full, and even sent in fake documents to show paid-off debts in attempts to raise the credit limits on each card. After gaining some rapport for their false identities the fraudsters would then max out the credit cards with no intention of paying the debts.
Three of the businesses used to accept and monetize the fraudulently obtained credit cards were jewelry stores in the Jersey City area that have since been seized by authorities. In a jewelry store owned by one of the defendants, authorities confiscated $2 million in gold. The homes of fraud ring members were also searched with large amount of cash being seized as well, but millions of dollars have also been wired to Pakistan, India, China, Romania and other countries. Each of the fraud ring members arrested are being charged with conspiracy to commit bank fraud, which could result in as much as 30 years in prison. But the investigation is still ongoing as authorities continue to tally losses and look to arrest more fraud ring members involved.
For more information: