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ID Theft and Bank Fraud Ring Advertised Its Services

Started with Real Social Security Numbers

January 11, 2012

It pays to advertise, maybe.

A Palisades Park, New Jersey man admitted January 9 he ran an identity theft ring that peddled Social Security cards to scores of Korean clients who used them to steal millions through fraudulent bank loans, credit card bust-outs, and other schemes. The defendant confessed he directed frauds out of Bergen County storefronts and advertised his illegal services in Korean language newspapers. He pleaded guilty to five felony counts, including three counts of conspiracy, aggravated identity theft, and money laundering.

Also pleading guilty was an accomplice who admitted his role in three conspiracies that caused more than $2.5 million in losses to lenders. He admitted he fraudulently established credit scores for customers and obtained hundreds of thousands of dollars in commercial and personal loans for unqualified borrowers. He pleaded guilty to three counts of conspiracy to commit wire fraud and faces about 3 years in prison. Both men face deportation once their sentences are served. The men were among 54 people arrested in September 2010. About half of the defendants have pleaded guilty. The scheme centered on legitimate Social Security cards, issued in the 1990s to Chinese nationals who came to work in American territories in the Pacific. The defendant admitted he purchased the cards from blackmarket brokers and sold them to customers in Bergen County. He said ring members escorted more than 100 customers to various states so they could fraudulently obtain ID cards and drivers licenses using the Social Security cards and other documents, such as counterfeit Chinese passports.

The ring built up credit scores by adding the Chinese identities as authorized users to the accounts of co-conspirators, who received a fee for the service. Once they had obtained scores of 700 to 800, the customers were coached to open bank and retail credit card accounts and take out lines of credit and loans including loans guaranteed by the Small Business Administration using the fraudulent identities. The ring busted out the credit cards by buying expensive liquor, designer clothes, and other high end goods they resold for cash. They also had a network of collusive merchants who rang up sham charges. Other schemes included check kiting, leasing luxury cars and selling them, and filing fake tax returns. In total, the scheme defrauded various credit card companies, banks, and lenders out of about $4 million.

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