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News Conference on Huge Identity Theft Case

Aired November 25, 2002 - 13:08   ET


KYRA PHILLIPS, CNN ANCHOR: We're actually going to take you live to New York, a story, an arrest and guilty plea in a related case in connection to be what's believed to be the largest identity fraud case in American history.
Let's listen in.


JAMES B. COMEY, U.S. ATTY.: ... the assistant inspector in charge of the United States Postal Inspection Service here in New York, and Steve Ianucci, the secret special agent in charge of the Secret Services of New York office.

I'm joined by my prosecutors Katie Chu and Julian Shragman. We are here this afternoon to announce what we believe is the largest identify case in the United States history.

Thanks to the good work of these agencies, two men are in custody and charged with a variety of fraud charges for orchestrating a scheme that exploited the access of one of these men as an insider to credit reports from the big three credit reporting agencies. In short, these defendants are charged with using that insider access to obtain tens of thousands of credit reports and to sell those credit reports to criminals who then exploited that information to rip off American consumers.

We are still unwinding this case and it's very early, but at this point, we know that the losses are in the many, many millions of dollars, and that this case is every American's worst financial nightmare multiplied tens of thousands of times.

Let me tell you a little bit about the case, which started to come together earlier this month with the arrest of Phillip Cummings. Cummings is 33 and worked at a company that was based on Long Island called TCI. He worked there from mid 1999 through March of 2000. And his job there was to work at the help desk. That was a very important fact. What TCI did and does is supply companies with the software and hardware to allow them to check your credit history with one of the big three credit rating agencies.

For example, if you go to a Ford dealership to buy a car and they want to check your credit history, they'll use TCI software and a code that they get from TCI to contact Ixperian, for example, to get a copy of your credit report. These defendants are alleged to have used Cummings access at the help desk. And what that meant was people would call in with questions or concerns from companies around the country, and in the course of expressing those concerns, they would give Cummings their codes.

And what Cummings could do with the codes was pretend that he was that entity, that he was Ford, and then access the credit history of someone pretending that he was looking to get information for a legitimate corporate venture.

What we have charged Cummings, 33, and the next defendant who was arrested, Linus Baptiste, 43, together man this scheme, and it went like this: Baptiste would obtain from street criminals and fraud artist a wish list with the names and social security numbers of people whose credit histories they would like to have. Baptiste then arranged for Cummings to access using TCI information, to access the credit rating agencies and download those tens of thousands of credit histories.

He would then give them back to Baptiste, who would sell them for about $60 a pop to the street criminals, who would then exploit them in a variety of ways that that we'll talk about in a second.

Baptiste was arrested in October, and Cummings turned himself in earlier today.

Also arrested as part of this investigation was Hakeem Muhammad, age 37, of the Bronx, New York, who's charged with defrauding several of the victims in this case. He was arrested in an early stage of this investigation this summer. Let me tell you something about the numbers in this case.

The scheme ran from early 2000 through October of 2002 just last month. It involved victims upwards of 30,000. We know of approximately 30,000 victims, and the numbers are growing every day, and of losses that are in the millions and growing every day. In short, with a few keystrokes, these men picked the pockets of tens of thousands of Americans, and in the process, took their identity, stole their money and swiped their security.

I promised you some details of how this worked, and we have a chart that we hope will illustrate it. In short, Linus Baptiste would go to Cummings, the TCI employee, who, using a lap top, would download these tens of thousands of reports that were on the criminals' wish list, and many of the criminals who had supplied their wishlists were in the Bronx, New York and Brooklyn, New York. Baptiste, after obtaining the credit reports, would then sell them back to the people who had requested them, and they, in turn, would distribute them to the extensive fraud network which, regrettably, exists in the United States.

The victims in this case span the country. Although many of the fraudsters were here in New York supplying the wish lists, the Social Securities and names that they wanted the credit histories for were from folks all over the country. The companies that the lead defendants impersonated to get the reports were a whole lot of them. But we've put up here a couple that were hit particularly hard. Ford Motor Credit had something over 10,000 reports that were requested in its name. Washington Mutual Bank, Washington Mutual Finance and a bunch of other banks were impersonated by these lead defendants. That's just my natural glow. How's that?

Behind the curtain?


OK. All right. Here we go. Terrific. Let's not push it.

Let me just give you a sketch of the damage done. As you might imagine, once this credit information, and you have some idea any of you have looked at your credit reports, what's on one of these printouts, that every credit card you have, every bank account you have, your mortgage, all of your loan transactions going back for years and years got in the hands of the criminals who had supplied the wish lists. They were exploited in every way imaginable. For example, bank accounts of victims were depleted, addresses were changed on accounts, new checks were ordered, new ATM cards were ordered, new credit cards were ordered, new lines of credits were opened and quickly drained.

People's credit cards were used, of course, without authorization and people would -- criminals would assume the identity of victims to order merchandise to have shipped to different locations.

In short, a lot of people were ruined financially and their credit were ruined financially by this scheme.

Let me just tell you what's next. What's next from our point is we are pushing out and investigating this fraud, following this flood really that has flowed into so many criminal streams around the country. And we are determined to find those criminals who are using this information to rip off the consumers. But we all want to supply some vehicle for people who think...

PHILLIPS: James Komi, United States attorney James Komi live in New York there, announcing the arrest and guilty plea of three individuals, specifically Phillip Cummings, who worked for Teledata Communications Incorporated, believed to be the largest identity fraud case in American history. Komi going on to talk about the nearly 3- year-old scheme that victimized more than 30,000 people throughout the country, stealing their identity, stealing millions of dollars from them and stealing away, of course, their security.


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