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 Thousands affected by an outrageous US identity theft scam
February 21, 2005
At least 700 people had their identities stolen during a yearlong scam by con artists who had signed up as clients of data-broker ChoicePoint Incorporated.
The company maintains databases that hold 19 billion Social Security numbers, credit and medical histories, motor vehicle registrations, job applications, lawsuits, criminal files, professional licenses and other pieces of sensitive information. ChoicePoint also owns a DNA analysis lab and facilitates drug testing for employers.
It was initially believed that as much as 35 thousand people's dossiers have been affected, but now this number is projected to surpass the half-million mark, and unlike previously believed, the scam won't be limited to California residents only becoming stripped off.
That's a much higher number than the latest estimate acknowledged by ChoicePoint, which belatedly sent warning letters to a total of 145,000 people in various states after a chorus of complaints.
The volume of data compromised was so huge that deputies are almost certain that a 41-year-old Nigerian man sentenced Thursday to 16 months in jail in the scam did not act alone.
The man, Olatunji Oluwatosin, was arrested on Oct. 27 when ChoicePoint faxed him some paperwork at a Kinko's store in a sting operation. He pleaded no contest and did not agree to help authorities in the probe. Wickedly enough, at the moment of his arrest, the man was carrying along five cellphones, with only one of those actually registered to his name. Others were registered as those of affected clients of ChoicePoint. When the police raided the man's apartment, they were able to retrieve account and personal data records in wholesale amounts.
The task force leader, sheriff's lieutenant Robert Costa, says he can't reveal many details on the case, but agreed to provide some of them.
Using stolen identities and faxing applications to ChoicePoint from Kinko's stores, the thieves opened up 50 accounts and for months received volumes of data on consumers, including names, addresses, credit reports and Social Security numbers all the data needed to get credit in someone else's name.
The ring also set up commercial mail-receiving locations in places such as Mail Boxes Etc., where deputies found redirected mail for more than 700 people everything from personal letters to junk mail to the credit card applications that are like gold for con artists, Costa said.
ChoicePoint had required the con artists to fax copies of business licenses, and verified through a background check that licenses were valid for nonbank financial institutions. But they didn't perform physical checks or visit the addresses, as they sometimes do, to make sure they were legitimate.
Computer experts worry that ChoicePoint and other companies that specialize in gathering and selling private information still aren't sufficiently protecting it from unauthorized uses.
"Most financial organizations have very sophisticated fraud detection algorithms to minimize the impact to the end user why couldn't this company have the same type of controls?" asked Joseph Ansanelli, a member of the Financial Services Information Security Analysis Center who has testified before Congress on identity theft and consumer data privacy. "Even if the criminals misrepresented themselves to do fraud, there are fraud detection programs that could kick in at that point."
"We were victimized by some extremely well organized criminals," ChoicePoint spokesman Chuck Jones said.
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