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Another ID thief targets high profile ultra-rich

Posted on Aug 17, 2007 by Tom Fragala

From Dow Jones

The Manhattan district attorney's office has charged five men in connection with an alleged identity-theft ring that attempted to steal millions of dollars from wealthy individuals. The targets included Anthony Pritzker, the president of consumer-credit information firm TransUnion LLC, and Charles J. Wyly Jr., the one-time chairman of Michaels Stores Inc. (MIK).

ID thieves going after the ultra-rich or celebrities is nothing new. That is not what makes this story interesting to me. It’s that the “ring” of thieves showed a bit of ingenuity in how it targeted the victims. The ring leader allegedly did public records searches such as home purchases. That’s right, if you purchase a home, then tremendous amounts of information about you is made available to anyone for a small fee. The law requires the information is made public via a UCC filing (uniform commercial code). Then using that information, such as the bank listed on the mortgage documents, and piecing together parts of your identity from other places, your financial accounts might be able to be compromised. In other words, if the thief knows your brokerage account is with Wells Fargo, the thief can then pose as you to authorize a withdrawal. Perhaps a wire transfer to Russia, Vanuatu or Nigeria.

And your bank is not necessarily going to come riding to the rescue and return your funds because, well, “they have to, right?” Not exactly. Can you name the US federal statute that provides consumer fraud protections for your brokerage or home equity account like FCRA does for your credit card? Don’t waste your time, it doesn’t exist. What about the Federal Trade Commission, don’t they help you? Nope, they have no jurisdiction. Banking oversight is handled by a hodge podge of agencies depending on where and how your bank/credit union is chartered.

The ring leader in the Dow Jones story (Popov) went after financial accounts with these minimal consumer protections. These accounts are far more vulnerable and lucrative than silly credit cards. I know, my home equity line was attacked by an ID thief (I still haven’t posted the whole story yet.) Popov also showed cleverness in using stolen credit cards, not to enrich himself directly, but he used them to finance his crime spree—as means to an end. Although in doing so somewhat recklessly, he created a trail of evidence to his cohorts.

However, Popov was no evil genius. After all, if you read the article, his big plan, after first stealing $1.5 million in various ways, was to write a fraudulent check for $7 million. As if that was just going to sail through unnoticed. Then he let himself be lured from Russia to New York—he was arrested at the Brooklyn Bridge of all places (what’s that saying about having a bridge to sell ya?) He should have realized that 7 figure thefts get a lot of interest from federal law enforcement.

Take away: put a password or PIN on ALL your accounts: checking, CD’s, brokerage, home equity line. The code will be required when calling or writing to make changes to your account. That will serve as a speed bump if you are targeted by a thief.