According to a Networkworld Layer 8 article, the U.S. FBI arrested 13 in an elaborate credit card fraud scheme. “ The FBI today said it broke up what it called one of the largest credit card, cyber-fraud schemes in its history – a $200M scam that created more than 7,000 false identities and tens of thousands of fake credit cards.
The FBI said it arrested 13 people involved in the scam the agency said maintained more than 1,800 “drop addresses,” located across the country including houses, apartments, and post office boxes, which they used as the mailing addresses of the false identities.
The scam involved a three-step process in which the defendants would:
■”Make up” a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus.
■”Pump up” the credit of the false identity by providing false information about that identity’s creditworthiness to the credit bureaus. Believing the furnished information to be accurate, the credit bureaus would incorporate this material into the false identity’s credit report, making it appear that the false identity had excellent credit.
■”Run up” large loans using the false identity. The higher the fraudulent credit score, the larger the loans that the defendants could obtain. These loans were never repaid, and the defendants reaped the profits.”
This scam is further evidence of the “corporate” business-like behavior of cybercrime organizations. In this case, it seems they’ve taken a page from “vertical integration”, The process in which several steps in the production and/or distribution of a product or service are controlled by a single company or entity, in order to increase that company’s or entity’s [profit and/or] power in the marketplace.
The crooks implemented this vertical integration strategy by: creating sham companies that obtained credit card terminals for processing credit transactions; these “companies also served as “furnishers,” providing the credit bureaus with false information about the credit history of numerous false identities of people who purportedly worked at or owned the sham companies. The defendants used sophisticated methods-including a network of black-market businesses called “tradelines” providers-to commit fraud.”
The bottom line to this article is not that the FBI has done an excellent job…they have; not that the crime took place…it did; but that the cybercrime organizations are run like large corporate businesses, and that will enable them to become larger and more successful.
Reference: Networkworld Layer 8 article
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