21st Century Crime Ring

Kellam T. Parks
Managing Member of Parks Zeigler, PLLC

No longer are we dealing with the Paper Moon con artists or Dark Knight Thieves… well, maybe we still have those troubles; however, today’s thieves can make a good living without ever brandishing a weapon or using sleight of hand tricks. How lucrative is fraud these days? Well for at least 18 people it has been worth over $200 million dollars (confirmed so far) starting from 2003. The new fraud scam has been described as "Make up, Pump up, and Run up."  These thieves have proven if you have time, internet knowledge, and a few co-conspirators connected to real businesses, you can build fake companies, create false personal identities, and get credit cards and loans. The strategy is to use the credit cards of these false persons ("make up") sparingly, build up the false identities’ credit worthiness ("pump up"), and once the credit card companies increase the cards' limits, max them out ("run up") - never paying the bill. With the help of one of the co-conspirators, these thieves were able to provide false information to credit reporting agencies to build up their credit worthiness as well. This scheme was taking place over eight countries and 28 states in the U.S. - including Virginia.

Millions in American money has been wired overseas to Pakistan, India, the United Arab Emirates, Canada, Romani, China and Japan by the ring leaders Babar Qureshi and Muhammad Shafiq. With so much unrest in several of these countries you cannot help but wonder what exactly is the stolen money funding? I doubt one wire transfer of $500,000 was to help the family back home with their utility bills.  Even though the ring was busted by the FBI, five persons of the 18-person ring still remain at large. 

If you think your identity is safe, think again. While these thieves may have created over 7,000 false identities, they also used real social security numbers. These actions will create havoc for the people whose social security numbers were used to create a false identity. The thieves also used real credit card accounts and added authorized users to run up charges. There is documentation that they even made false police reports to claim identity theft so they could repair and reuse false identities. The sham companies these people created would run the cards for non-existent purchases/services through merchant terminals and pocket the cash payments. During an eight month period at one legitimate business (where a co-conspirator was working) $386,000 went through the merchant terminal before it was shut down due to 95% of transactions being fraudulent. The thieves could also obtain cash from convenience checks written to any one of the named co-conspirators. The FBI listed at least 464 cards linked to each of two of the co-conspirators, and thousands more. [Read more details on the scam at: http://goo.gl/KC2DK and get further details from the criminal complaint filed by the FBI on February 4, 2013 @ http://goo.gl/IULCO]

Beyond the individual victims of the identity thefts (where there were real people involved), these thieves' actions affect the big picture - how you do suppose a credit card company deals with such losses?  They tighten credit, raise interest rates, add fees, etc.  There is a real need for fraud prevention technology to advance and try to at least catch up (as it is doubtful it will ever be a step ahead). 

The odds that one of my readers is affected by the scam discussed here is low, even with its broad scope; however, many of the people I speak to do not check their credit regularly.  I always recommend getting a full free report from the credit agencies every 12 months.  [How to - http://goo.gl/GcE9Q]  I personally also use Credit Karma, which is a free service that allows you to not only monitor activity on your credit reports, but also obtain constantly updated credit scores (which are not included in the free reports given by the agencies).  You can find that site here:  www.creditkarma.com.  I am not affiliated in any way with the company - I just like the service.

If you find you have misinformation on your credit report, you do have rights and there are laws requiring the credit reporting agencies to take certain action.  There is information on all of this on my website and if you need assistance, as always, feel free to contact me.

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