Feds dent credit scam, ID theft ring




It began early last autumn, when the Hudson County Prosecutor’s Office started fielding calls from across the country from people reporting that credit cards issued in their names had been used to make fraudulent purchases in Hudson County.

It culminated last Wednesday, April 3 — after a seven month investigation — with the arrest of more than 30 suspects in a complicated, multistate, multimillion-dollar identity theft ring based in New Jersey.

According to Hudson County Acting Prosecutor Gaetano T. Gregory, those arrested were responsible for stealing the identities of nearly 1,000 victims from as far away as California.

The scam reportedly generated about a million dollars — per month — in illicit profits.

In early morning raids Wednesday, more than 160 law enforcement officers fanned out across northern and central New Jersey, Queens, Brooklyn and Long Island, executing search-and arrest-warrants and taking the suspects into custody.

The task force included the HCPO Special Investigations Unit, U.S. Postal Inspectors, Secret Service Agents, the N.J. Division of Criminal Justice, U.S. Immigration and Customs Enforcement (ICE), Homeland Security and numerous other local, county, state and federal agencies.

Last fall, when the phone calls first started coming, detectives, using store security videos as well as physical surveillance, identified a number of possible suspects, Gregory’s office reported.

“Review of the account activity quickly connected the suspects to hundreds of other accounts and millions of dollars in fraudulent transactions,” the HCPO stated.

According to the prosecutor, further investigation revealed that the leaders of the fraud group were purchasing victimidentity info from on-line brokers, “who functioned as clearing houses for information stolen by computer hackers from various sources throughout the United States.”

The stolen identities were then used to open new credit card accounts in the victims’ names or to order emergency replacement cards on existing accounts.

The HCPO explained the intricate modus operandi:

• In a process known as “punching,” the electronic account information from the cards’ magnetic strips would be transferred to counterfeit cards.

• The fakes were given to the ring’s operatives, called “strikers,” who made fraudulent purchases at retailers all along the Atlantic Coast, from Florida to New England, and into the Midwest.

• Teams of strikers, often operating simultaneously in different parts of the country daily bought retail gift cards valued at tens of thousands of dollars.

• They used those gift cards to purchase hundreds of Apple i-Pads, i-Pods, i-Phones and other electronic items at various retailers, at times buying out the entire inventory of a particular model.

• The merchandise was then sold in bulk to fences in New Jersey and New York, in return for cash payments amounting to tens of thousands of dollars per delivery.

The suspects apparently spent the proceeds on luxury cars, high-end jewelry and watches, designer clothing, expensive vacations and lavish evenings at restaurants and nightclubs. Members of the group also transferred large sums of money and numerous vehicles to Nigeria, authorities said.

During last week’s takedown, more than $100,000 in cash was seized along with gift cards, counterfeit credit cards, dozens of computers and related equipment used to produce the counterfeits, the HCPO reported.

Authorities also confiscated more than a dozen cars used by the group.

Ironically, considering where the probe originated, not one of the suspects (thus far) was a Hudson County resident.

Nine defendants — from East Orange, South Orange, Sayreville, Parlin, Hillside, Elizabeth, Queens, N.Y., and Westbury, L.I. — have been charged with money laundering, theft by deception, wrongful impersonation and conspiracy, Eighteen other defendants — from Newark, East Orange, Irvington, Union, Sewaren, Maplewood, Plainfield, Piscataway and Brooklyn, N.Y. — were charged with theft by deception, wrongful impersonation, and conspiracy.

Charged with conspiracy were two alleged “associates” from Linden and Hillside. And two additional suspects, from Sayreville and Springfield, were charged with conspiracy, fencing and receiving stolen property.

The investigation is continuing and additional arrests are expected, the HCPO noted.

Gregory commended the efforts of all of the agencies involved in the investigation and the raids, including: the U.S. Postal Inspection Service; the U.S. Secret Service; the FBI; the U.S. Attorney’s Office in Newark; the N.J. Office of Homeland Security and Preparedness; U.S. Department of State; N.J. State Police; N.J. Transit Police; Essex, Union and Middlesex County Prosecutors’ Offices; the Hudson County Sheriff’s Office; Police Departments in Union, Livingston, Newark, Millburn, Sayreville, Old Bridge, Woodbridge, Elizabeth, Linden, South Orange, Hillside, East Orange and Springfield; the New York County District Attorney’s Office; the DEA; the U.S. Marshals Service; the NYPD; Nassau County Police, and Stevens Institute of Technology Police.

– Karen Zautyk

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