U.S. attorney Paul Fishman told CBS News, “This is, as far as we can tell, one of the largest if not the largest credit card fraud case ever prosecuted by the Department of Justice.”
Eighteen people were charged in an elaborate scheme to dupe credit-rating agencies. The eighteen created “fake people” with fake identities, bumped up their credit scores and made it possible for them to borrow large sums that…surprise, surprise…was never repaid.
The criminals used at least 7,000 fake identities to get more than 25,000 credit cards. Reported CBS News, “Participants set up more than 1,800 mailing addresses, creating fake utility bills and other documents to provide credit card companies with what appeared to be legitimate addresses. Once participants obtained the cards, they started making small charges and paying off the cards to raise their credit limits.
“They then sent fake reports to credit-rating agencies, making it appear that cardholders had paid off debts, setting the stage for sterling credit ratings and high credit limits.”
When the criminals pushed their credit limits as high as they thought they would go, they would either max out their cards or take out loans and disappear. Well, they didn’t exactly disappear since they never existed in the first place.
Not content to create fake people, the credit card ring also created at least 80 fake businesses to accept credit card payments. Using the fraudulently obtained credit cards, purchases were made of nonexistent products with the fake businesses keeping the credit card company’s money, which was the only thing that was real.
So, what did the scammers do with the $200 million plus they stole? Some lived large spending on everything from electronics to gold to spa treatments. Some squirreled it away. Fishman reported that authorities found $68,000 stashed in an oven. After all, the money was hot. Yet others shipped their millions overseas.
Additional fallout from the bust was that three jewelry stores in Jersey City were closed and their inventories seized. Thus far all involved were charged with one count of bank fraud.