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Sun Dec 07, 2008 10:15 pm
|Thieves Stole Identities to Tap Home Equity
By Brian Krebs
washingtonpost.com Staff Writer
Friday, November 28, 2008; E10
Federal authorities this week announced a series of arrests and convictions in connection with a global identity theft ring that stole millions of dollars by hijacking home-equity lines of credit issued to thousands of consumers.
On Monday, state and federal law enforcement officials arrested four men who were part of a group that allegedly combined high-tech equipment with old-fashioned con-artistry to drain home-equity lines.
According to charging documents unsealed this week in New Jersey's U.S. District Court, the men and four others arrested earlier this year tricked multiple banks and credit unions into wiring more than $2.5 million from home-equity lines to accounts controlled by members of a fraud ring in Canada, China, Japan, Vietnam and South Korea, among other countries.
Last Thursday, three people authorities say were connected to the New Jersey gang pleaded guilty in the U.S. District Court for the Eastern District of Virginia to conspiracy to commit bank fraud and related charges. Officials say they stole at least $10 million through home-equity scams.
The cases highlight what the FBI calls an "emerging scheme" afflicting the struggling real estate and mortgage market. In such crimes, thieves target people with good credit and large, untapped home-equity lines of credit, digging through public records -- such as property deeds and mortgages -- as well as publicly available Internet databases to obtain credit applications, credit reports and victim signatures.
"Home-equity lines of credit are an expanding front in the battle against mortgage fraud," said New Jersey U.S. Attorney Christopher J. Christie. "Homeowners should carefully review their statements to make sure their hard-earned equity is not disappearing from under their noses."
According to the criminal complaint, the defendants and alleged co-conspirators used fee-based Web databases to find documents that included names, birthdates and Social Security numbers of people with large balances in home-equity credit accounts.
The government alleges that the group also used other online database to locate answers to common security questions, such as the victim's mother's maiden name, and used the combined information to order credit reports in the victim's name to verify account balances.
Authorities say the defendants then would phone the victim's bank or credit union and ask it to wire a substantial portion of the line of credit to banks in Asia and Canada.
In the Virginia cases, the defendants acknowledged using caller-ID spoofing services, prepaid cellphones and PC wireless cards to hide their location and identity online. In many cases, the government alleges, the defendants transferred victims' home telephone numbers to alternate lines they controlled to stay one step ahead when the banks called to verify transfer requests.
Law enforcement officials say the New Jersey group operated in much the same way. Hakeem Olokodana, 41, one alleged ring member awaiting trial in New Jersey, is accused of asking a victim's bank to wire $675,000 to an account in Tokyo. Olokodana allegedly called Verizon posing as the victim, complaining of problems with his home phone line. He then persuaded Verizon to forward all incoming calls to a separate telephone number that he controlled, according to officials.
Verizon spokesman Eric Rabe said the company's customer support technicians employ a number of methods for verifying such requests, from asking about information on the customer's last phone bill, to the amount of the last payment.
"We are a frequent target of these kinds of attacks." Rabe said. "And while we may not be 100 percent successful at stopping them, we certainly have lots of measures in place to prevent this sort of thing."
The government alleges that Olokodana and other conspirators also traded personal and financial data of their victims using free Web mail accounts. Investigators say the men took care to mask their location by variously accessing the e-mail accounts via public wireless networks and through wireless PC cards acquired using billing information of other victims.
Arrested Monday were Derrick Polk, 45, of Los Angeles; Oludola Akinmola, 37, and Oladeji Craig, 39, of Brooklyn, N.Y.; and Oluwajide Ogunbiyi, 32, of Springfield, Ill. They appeared Monday in federal courts in Newark, Buffalo, Los Angeles and Springfield. All four face charges of wire fraud, which carries a penalty of five to 50 years.
Between August and October 2008, charges were brought against Olokodana, and Yomi Jagunna, 44, both of Queens, N.Y.; Abayomi Lawal, 45, of Brooklyn; and Daniel Yummi, 40, of New York. They also face wire fraud charges.
Yummi's court-appointed attorney Marc Leibman said his client is married and has a family in California, despite having been deported from the United States previously. Leibman said "the government's evidence against my client appears to be insurmountable."
"Mr. Yummi is presumed innocent until he pleads guilty," Leibman said. "But we will strive for the most just result."
An attorney for Olokodana said he had just been retained and was not able to speak about his client or the case. Calls to attorneys for the others charged were not returned.
Last week, Precious Matthews, 27, of Miami, and Ezenwa Onyedebelu, 20, and Brandy Anderson, 30, both of Dallas, pleaded guilty in Virginia to conspiring to possess personal identification information with intent to commit wire fraud, conspiring to commit wire fraud and conspiring to gain unauthorized access to computers.
Matthews and Onyedebelu face a maximum penalty of 30 years in prison, a fine of up to $1 million and up to five years of supervised release, according to prosecutors. Anderson faces a maximum penalty of five years in prison, a fine of up to $250,000, and up to three years of supervised release.
In a report released last summer, the Credit Union Information Security Professionals Association said a number of credit unions have beefed up security in response to an increase in home-equity fraud, but those precautions have come with their own costs: "Customer service call times have increased one minute on average due to increased security verifications, and some legitimate members are failing increased security questions," the report noted.
Anne Wallace, president of the Identity Theft Assistance Center, a nonprofit industry group, said properly training bank employees to detect fraud is critical.
"It's a challenging problem for companies across the board," Wallace said, "how to train your employees to balance customer service and protecting critical assets."
Wallace said consumers can help combat this growing form of fraud by keeping a close eye on bank statements and by taking full advantage of a federal law that guarantees consumers a free copy of their credit report from each of the three major credit reporting bureaus. Consumers can request credit reports three times a year for free at each credit bureau.
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