In what is being termed the largest identity theft takedown in U.S. history, 111 individuals have been charged for their involvement in an organized crime operation responsible for more than $13 million in losses over a 16-month period.
The defendants, 86 of whom are currently in custody, are members of five credit card fraud and identity theft groups, based in Queens County, N.Y., with ties to Europe, Asia, Africa and the Middle East, prosecutors said in a Friday statement. Twenty-five suspects are still being sought by law enforcement.
“This is by far the largest – and certainly among the most sophisticated – identity theft/credit card fraud cases that law enforcement has come across,” Queens County District Attorney Richard Brown said.
Between May 2010 and September of this year, the defendants defrauded thousands of consumers and financial institutions, including American Express, Visa, MasterCard and Discover Card, according to prosecutors.
The two-year police investigation – codenamed “Operation Swiper” – involved the use of physical surveillance and court-authorized electronic phone eavesdropping. Authorities executed search warrants last week at 15 locations throughout New York and Long Island, yielding $650,000 in cash, handguns, and a truck full of electronics, computers, watches, skimmers and card readers, along with lists of bank card numbers and fake identifications.
To orchestrate the crimes, the leaders of the racket obtained the stolen credit card numbers from overseas suppliers in Russia, Libya, Lebanon and China, or through online carding forums. The masterminds also placed skimming devices in restaurants, bars, banks and retail stores to lift numbers.
The stolen data was then passed over to manufacturers, who used "reverse skimming devices" to create cloned cards.
Then, the counterfeit cards were given to teams of “shoppers,” who were instructed to purchase electronics, designer handbags, gaming consoles, jewelry and other high-end goods that could be resold. The items were subsequently sold at a discounted price to “fences,” or individuals who knowingly purchase stolen merchandise with plans to resell it to the public.
Members of the crime rings also allegedly used forged cards to stay at five-star hotels in Miami Beach and private villas in Puerto Rico, and rent Lamborghinis, Porches and, in one instance, a private jet to take them from New York to Florida.
“These weren't holdups at gunpoint, but the impact on victims was the same,” New York City Police Commissioner Raymond Kelly said in a statement. “They were robbed.”