JAMES B. COMEY, the United States Attorney for the Southern District
of New York, and KEVIN P. DONOVAN, the Assistant Director in Charge of
the New York Field Office of the FBI, today announced the arrest of a
defendant, PHILIP CUMMINGS, in what authorities believe to be the largest
identity theft case in U.S. history. Mr. COMEY also announced the arrest
of LINUS BAPTISTE and the guilty plea of HAKEEM MOHAMMED in related cases.
In a Complaint unsealed today, the United States charged PHILIP CUMMINGS
with wire fraud and conspiracy in connection with his participation in
a massive identity theft scheme that spanned nearly three years and involved
more than 30,000 victims. As alleged in the Complaint, CUMMINGS worked
at Teledata Communications Inc. ("TCI"), a company in Long Island
that provided the computerized means for banks and other entities to obtain
consumer credit information from the three commercial credit history bureaus
Equifax, Experian and TransUnion. TCI provided software and other
computerized devices to its client companies that enabled these companies,
through the use of confidential computer passwords and subscriber codes,
to access and download credit reports of consumers for legitimate business
purposes.
As alleged in the Complaint, CUMMINGS worked at TCI from about mid-1999
through about March 2000 as a Help-Desk employee, and was responsible
for helping TCI's clients. As such, he had access to these companies'
confidential passwords and codes. With these codes, he had the ability
to access and download credit reports himself, it was charged.
As alleged in the Complaint, starting in early 2000, CUMMINGS agreed to
provide credit reports to a co-conspirator who is now a cooperating witness
in the investigation ("CW"), in return for money. CW knew individuals
who were willing to pay up to $60 per credit report, and CW offered to
split that money with CUMMINGS, it was charged. Thereafter, CW dealt with
20 or more individuals in the Bronx and Brooklyn, who would bring lists
to CW filled with names and addresses and/or Social Security numbers,
and would ask CW to provide credit reports in those people's names. They
would then pay him $60 for each credit report that he was able to provide
to them, it was charged, and CW, in turn, would split that money with
CUMMINGS.
As alleged in the Complaint, when CW began receiving lists from these
co-conspirators in the beginning, he would contact CUMMINGS, and CUMMINGS
would bring a laptop computer to the CW's home in New York and download
the credit reports and give them to CW. CW in turn would sell them to
his co-conspirators on the street.
At some point in 2000, CUMMINGS moved to Georgia but allegedly ensured
that the scheme could continue by traveling to New York to download credit
reports for CW and then later giving a pre-programmed laptop computer
to CW for CW to use to download the reports. He also allegedly taught
CW how to access the Credit Bureaus and download the reports.
As alleged in the Complaint, CUMMINGS provided passwords and codes to
CW that enabled CW to access all three Credit Bureaus Equifax,
TransUnion and Experian over time. At various points in the scheme,
when CW found that a code and password that CW had been using no longer
worked, he allegedly called CUMMINGS. CUMMINGS would then allegedly give
him a new password and code to use to continue the scheme. This happened
on numerous occasions, th Government charged.
According to the complaints, the other co-conspirators to whom CW sold
the credit reports provided, in the aggregate, tens of thousands of names
and hundreds of thousands of dollars to CW for consumer credit reports.
CW provided the credit reports to these other co-conspirators and split
the money that they provided to CW with CUMMINGS.
One entity whose confidential TCI password and subscriber code were allegedly
misappropriated in the scheme was Ford Motor Credit Corp. at its Grand
Rapids, Michigan, branch. That branch's password and code were used for
approximately 10 months to download approximately 15,000 credit reports
from Experian. Ford discovered the scheme after reviewing bills sent by
Experian for those credit histories and receiving numerous complaints
from consumers who had been the subject of identity theft and fraud. After
searching its databases, Experian found that the passwords and subscriber
codes of Washington Mutual Bank in Florida and Washington Mutual Finance
Company in Crossville, Tennessee, had also been compromised, resulting
in approximately 6,000 more credit reports for consumers being improperly
downloaded.
According to the Complaint, Equifax determined that the password and subscriber
codes for Ford's Decatur, Illinois, branch had been used improperly to
download 1,300 credit reports from its databases in September and October
2002. The passwords and codes of Washington Mutual Finance's branch in
St. Augustine, Florida, were used to download another 1,100 credit reports,
and more than 4,000 additional credit reports were downloaded using the
passwords and codes of six more entities: Dollar Bank in Cleveland, Ohio;
Sarah Bush Lincoln Health Center in Illinois; the Personal Finance Company
in Frankfort, Indiana; the Medical Bureau in Clearwater, Florida; Vintage
Apartments in Houston, Texas; and Community Bank of Chaska in Chaska,
Minnesota.
As alleged in the Complaint, Central Texas Energy Supply's codes were
used improperly to download approximately 4,500 credit reports from TransUnion
in September 2002.
All of the companies described above whose codes were compromised and
misused have all been confirmed as TCI client companies, according to
the Complaint.
As alleged in the Complaint, the number of victims in this case exceed
30,000, and the Government is in the process of determining the extent
of the loss. To date, more than $2.7 million in financial loss has been
confirmed. Consumers whose credit reports have been stolen in this scheme
have reported many forms of identity fraud. As alleged in the Complaint,
bank accounts holding tens of thousands of dollars in savings have been
depleted; credit cards have been used to the tune of thousands of dollars
without authorization; address changes have been made to accounts at various
financial institutions; checks, debit cards, ATM cards and credit cards
have been sent to unauthorized locations; and identities of victims have
been assumed by others.
In a related case, LINUS BAPTISTE was arrested on October 29, 2002 on
a wire fraud charge related to the CUMMINGS case. According to that Complaint,
phone numbers registered to BAPTISTE's residence were used to dial into
Equifax's databases and download 400 - 600 credit reports in August 2002
in the scheme. Credit reports, laptop computers and a document bearing
CUMMINGS' name were found in BAPTISTE's home.
In a related case involving fraud perpetrated on several of these victims,
on July 30, 2002, a defendant using the name HAKEEM MOHAMMED was charged
with mail fraud in connection with an address change made to a line of
credit opened by two of the Ford victims and the opening of accounts and
lines of credit in the names of two other Ford victims. MOHAMMED entered
a guilty plea to mail fraud and conspiracy charges on October 2, 2002,
and is scheduled to be sentenced before United States District Judge GERALD
E. LYNCH on January 8, 2003.
CUMMINGS is expected to be presented in Manhattan federal court this afternoon
on the Complaint unsealed today. If convicted, CUMMINGS faces, with respect
to the wire fraud charge, a maximum term of 30 years' imprisonment and
a maximum fine of $1 million or twice the pecuniary gain or loss resulting
from the offense. CUMMINGS faces, with respect to the conspiracy charge,
a maximum term of 5 years' imprisonment and a maximum fine of $250,000,
or twice the gross gain or loss resulting from the crime.
Mr. COMEY stated: "With a few keystrokes, these men essentially picked
the pockets of tens of thousands of Americans and, in the process, took
their identities, stole their money and swiped their security. These charges
and the potential penalties underscore the severity of the crimes. We
will pursue and prosecute with equal vigor others who may be involved."
Mr. DONOVAN stated: "The defendants took advantage of an insider's
access to sensitive information in much the same way that a gang of thieves
might get the combination to the bank vault from an insider. But the potential
windfall was probably far greater than the contents of a bank vault and,
using 2lst century technology, they didn't even need a getaway car. Using
the same technology, we determined what was done and who did it, proving
that technology is a double-edged sword."
Mr. COMEY praised the investigative efforts of the Federal Bureau of Investigation
and thanked the United States Secret Service and the United States Postal
Inspection Service for assisting in the investigation as well. Mr. COMEY
also stated that the investigation is continuing.
Assistant United States Attorneys KATHERINE M. CHOO and JULIAN SCHREIBMAN
are in charge of the CUMMINGS and BAPTISTE prosecutions. Assistant United
States Attorney HARRY CHERNOFF is in charge of the MOHAMMED prosecution.
The charges contained in the Complaints are merely accusations, and the
defendants are presumed innocent unless and until proven guilty.
Persons who believe they may have been victims of identity theft are advised
to contact the Federal Trade Commission at: 1-877-ID THEFT (1-877-428-4338)
or via e-mail at WWW.FTC.GOV.
02-247
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