Posted on June 26th, 2013 No comments
U.S. prosecutors announced fraud and other charges Wednesday against eight alleged members of an international cybercrime ring that the government said hacked into the computers of more than a dozen leading financial institutions and the U.S. military’s payroll service.
Prosecutors said the scheme to steal millions from customer accounts was led by Oleksiy Sharapka, 33, of Kiev, Ukraine, who remained at large along with a second Ukrainian national. The conspiracy is alleged to have begun about the same time Sharapka was deported from the U.S. in 2012 after serving time in federal prison in Massachusetts.
Four of the defendants had been arrested by Wednesday morning, including key associates in New York, Massachusetts and Georgia accused of using stolen identities to try to cash out the hacked accounts, U.S. Attorney Paul Fishman said.
The government said financial institutions whose computer networks were hacked included Aon Hewitt, Automated Data Processing Inc., Citibank, E-Trade, Electronic Payments Inc., Fundtech Holdings LLC, iPayment Inc., JPMorgan Chase Bank, Nordstrom Bank, PayPal, TD Ameritrade, TIAA-CREF, USAA, Veracity Payment Solutions Inc. and the payroll arm of the U.S. Department of Defense.
“Cybercriminals penetrated some of our most trusted financial institutions as part of a global scheme that stole money and identities from people in the United States,” Fishman said.
The ring targeted electronic payment systems of the various institutions in a bid to steal at least $15 million from U.S. customers, prosecutors said.
The criminal complaint notes that some of the efforts to steal funds from customer accounts were blocked.
It does not make clear the number of hacked firms from which the defendants were able to successfully transfer money, or how the defendants were able to hack into the computer networks of so many major financial institutions.
Once inside the computer networks, the defendants and their conspirators sought to divert money from customer accounts to prepaid debit cards that they controlled, prosecutors said. As part of the scheme, cards were obtained in the names of people whose identities had been stolen.
Stolen identities were also used to file fraudulent tax returns with the IRS seeking refunds.
Crews of individuals known as “cashers” were employed in New York, Massachusetts, Georgia, Illinois and elsewhere to withdraw the stolen funds. The government said the majority of the proceeds were distributed to managers, including to leaders of the conspiracy overseas.
The defendants were charged with conspiracy to commit wire fraud, conspiracy to commit money laundering and conspiracy to commit identity theft.
Those under arrest by Wednesday morning were Oleg Pidtergerya, 49, of New York City’s Brooklyn borough; Robert Dubuc, 40, of Malden, Mass.; and Andrey Yarmolitskiy, 41, of Atlanta. They were identified as crew managers. Also arrested was Ilya Ostapyuk, 31, of Brooklyn, who is accused of helping move the proceeds of the fraud.
Ostapyuk and Pidtergerya appeared in federal court in Newark Wednesday afternoon. Ostapyuk was released after putting his home in New York City’s Staten Island borough up as collateral, and Pidtergerya was ordered held.
“My client is innocent,” said Igor Niman, Ostapyuk’s lawyer.
A public defender representing Pidtergerya declined to comment.
Yarmolitskiy was arrested at New York’s John F. Kennedy Airport but fell ill and had surgery Wednesday, authorities said. His court date will be scheduled. Dubuc is scheduled to appear in court in Boston.
Lamar Taylor, 37, of Salem, Mass., and Richard Gunderson, 46, of Brooklyn, were being sought.
The second Ukrainian being sought was identified as Leonid Yanovitsky, 38, also of Kiev, who prosecutors said helped Sharapka.
Posted on April 16th, 2013 No comments
MIAMI (CBSMiami) – A Miami woman was found guilty on Monday in a Miami courtroom for a tax refund scam that enabled her to receive thousands of dollars in fraudulent refunds from the government.
Prosecutor said 30-year old Natoya Mashea Handy used stolen identities of past or current inmates to submit phony federal tax returns.
Handy was found with 15 social security numbers, names, and dates of birth belonging to people who were incarcerated in the state of Florida. Prosecutor said she used 17 stolen social security numbers to file fraudulent taxes for the 2011 tax year. Each of the tax returns received hundreds of dollars in a refund, according to the U.S. Department of Justice.
She was convicted of one count of access device fraud and five counts of aggravated identity theft.
Handy’s sentence is scheduled for June 24.
Posted on March 18th, 2013 No comments
Malinsky Bazile, a young Miami police officer, pocketed about $140,000 over the past two years — but not in salary for his patrol duties, authorities say.
While on duty, Bazile ran the names of more than 1,000 people in the state driver’s license database, according to a criminal complaint. Then he took their personal information and filed bogus federal income-tax returns, all to score stolen refunds.
Bazile and fellow officer Vital Frederick, separately accused of tapping into the same database, were both arrested Thursday in the first-ever federal prosecution of identity theft and tax-refund fraud involving South Florida law enforcement.
Bazile, 28, of Miramar, and Frederick, 26, of North Miami, who both joined the force in 2008, were arrested by Miami police internal affairs detectives and FBI agents. The officers had their first appearances in Miami federal court Thursday, with bond hearings and arraignments set for next week.
In an unrelated prosecution, federal agents also arrested a state corrections officer Thursday on the same offenses.
The Miami cop arrests were but the latest in a string of city officer take-downs, part of a joint corruption investigation into the department. The main focus: several officers accused of providing protection for a sports-gambling ring or a check-cashing store, both in Liberty City.
Frederick was also charged with extortion in connection with the check-cashing store racket.
But the allegations of police involvement in the growing wave of ID- and tax-refund fraud prompted strong reaction — and disappointment — from others in law enforcement.
“The perpetrators of this type of [tax] fraud have been as diverse as the victims they prey upon,” said Miami U.S. Attorney Wifredo Ferrer. “To date, we have prosecuted Social Security office employees, hospital employees, clinic workers, former NFL players, gang members and violent criminals, to name a few. Today, we sadly add law enforcement to the list of thieves.”
Miami Police Chief Manuel Orosa could not be reached for comment.
Bazile and Frederick are among 11 Miami police officers relieved of duty in recent months who face criminal charges or the loss of their jobs in connection with the corruption investigation, which focused on the North District station in Liberty City.
In the unrelated case, Bernard Beliard, 27, of Miami, a state corrections officer since 2005, was arrested and accused of illegally tapping into an inmate database at the South Florida Reception Center in South Miami-Dade County, authorities say. He was fired Thursday.
All three law officers were charged in separate criminal complaints filed by prosecutors Robin Waugh and Michael Berger.
In the past year, including Thursday’s cases, the U.S. attorney’s office has charged about 130 defendants accused of an estimated $140 million in tax-refund fraud. Convictions have resulted in increasingly higher sentences: On Thursday, Jonathan Torres-Bonilla, 36, of Hollywood, convicted of fleecing $117,000 in tax refunds from the federal government, was slapped with 16 years in prison — the stiffest penalty so far in a South Florida ID-theft, tax-fraud case.
The U.S. government loses billions of dollars a year to refund schemes affecting millions of American taxpayers, according to the Treasury Department. South Florida is considered among the capitals of this type of fraud.
The joint FBI-Miami police corruption investigation was launched a year ago when the Liberty City sports gambling ring was broken up.
Last month, Miami officer Nathaniel Dauphin pleaded guilty to an extortion charge for providing protection for the illegal betting business.
Dauphin, 41, admitted he received between $4,000 and $5,000 from the owner of the illegal business from November 2010 until March of last year. Unbeknownst to him, Miami-Dade police detectives had the place under surveillance, witnessing Dauphin as he took money from the owner of the Player’s Choice, 6301 NW Sixth Ave., a barber shop that fronted for the illicit sports-betting business.
Investigators flipped Dauphin, who wore a wire and targeted other city cops, including Harold James, 29, an eight-year police veteran who resigned in November. He pleaded guilty last month to two extortion charges for protecting the Liberty City check-cashing business.
Also ensnared in that probe: Frederick.
But among the latest corruption cases, Bazile’s stands out for its sheer size, authorities say.
According to a criminal complaint, FBI and Miami police internal affairs detectives installed a tracking device on Bazile’s work-issued laptop in the past year after they uncovered that he had run more than 1,000 “suspicious” searches of people’s names in the Florida Department of Highway Safety and Motor Vehicles database.
Investigators found that Bazile supplied some of those names, with dates of birth and Social Security numbers, to his step-brother Jean Baptiste Charles, to submit false tax returns to the Internal Revenue Service. Charles pleaded guilty last month and faces sentencing in April.
Investigators soon discovered that Bazile also obtained personal information for hundreds of women with the same last names, such as Rogers, Gonzalez, Martinez, Lopez and Sanders, who were between 57 and 61, according to the criminal complaint.
Bazile filed nearly identical tax returns — with fabricated income information — in their names, claiming that each had earned unemployment compensation of $6,500, the complaint said. He sought refunds up to $1,700 each.
Investigators also obtained numerous ATM photos of Bazile last summer as he withdrew thousands of dollars on debit cards loaded with the refunds, which were issued by the IRS.
When investigators confronted Bazile in October, he signed a written confession, admitting he used the state database, withdrew money from the ATM machines on the debit cards, and made between $130,000 and $140,000 in 2011-2012 from the “scheme.”
Investigators searched his home and found more debit cards, as well as ledgers with hundreds of people’s personal data.
Acting FBI special agent in charge William J. Maddalena said police officers such as Bazile and his colleague, Frederick, “have a great responsibility and must be held to a higher standard.”
He added that the FBI’s Miami-area corruption task force was established in 2009 to “ensure these high standards of integrity are met and maintained.”
Posted on November 26th, 2012 No comments
A Tampa car dealer admitted in a plea agreement filed in U.S. District Court that he helped bilk the government out of almost $1.2 million in fraudulent tax returns.
The document filed Tuesday followed the May arrest of 42-year-old Russell Bruce Simmons Jr. on a 32-count indictment.
The Tampa Bay Times (http://bit.ly/Tu0tU7 ) reports Simmons agreed to plead guilty to one count of wire fraud and one count of aggravated identity theft.
The next step is for U.S. District Judge James D. Whittemore to decide whether to accept the plea agreement.
He faces two years on the identity theft charge and up to 20 years for wire fraud.
The newspaper reports Simmons was accused to laundering the refunds of fellow identity thieves through Simmons Auto Sales Inc.
Posted on October 23rd, 2012 No comments
A Bulgarian man and a Florida woman will spend a decade in jail after identity theft and bank fraud which cost Bank of America at least $862,478.
Antonio Velikov, 41, and Mariana Biserova Pashova, 35, were both sentenced to 10 years and one month in prison. They pleaded guilty in June to bank fraud, possession of more than 300 counterfeit credit or debit cards and aggravated identity theft.
The duo were arrested by Hoover police in May 2011 as they attempted to install a skimmer on a Regions Bank ATM. A skimmer is a camouflaged device that can read and store information from the cards.
“This pair was involved in ATM skimming operations in six Southern states, including Alabama,” U.S. Attorney Joyce White Vance said in a statement.
When caught, more than $50,000 in cash, a magnetic-stripe encoder, a camouflaged skimmer, laptops, computer accessories and 340 counterfeit cards were recovered from their room.
Posted on October 10th, 2012 No comments
TALLAHASSEE, FL – The Department of Business and Professional Regulation recently issued a consumer advisory after learning an entity posing as the Department is allegedly targeting license holders in a potential identity theft scam. An unsolicited email which appears to be from the Department warns of pending disciplinary action against licenses. The email directs the recipient to call a Department investigator at a toll-free number and provide personal identification information.
The Department has confirmed that the email communication is in no way connected with the Department or its regulatory authority.
If a license holder receives an email from an entity claiming to be the Department and warning of disciplinary action, he or she should not respond to the email or call the listed number. Instead, the licensee should contact the Department directly at 850-487-1395. Licensees may also log into their online accounts to view any public disciplinary actions.
The Department warned licensees against providing personal identification information to unknown individuals or companies who have made unsolicited contact with them. The theft of personal identification information is a crime and should be reported immediately to local law enforcement.
The Department will investigate the matter fully and will work with law enforcement to determine whether any criminal action has occurred.
Posted on August 30th, 2012 No comments
A small South Florida city has attracted the attention of federal investigators looking into tax refund fraud and identity theft, according to an independent watchdog agency that oversees the Internal Revenue Service.
In Belle Glade, nestled along Lake Okeechobee, 741 tax returns worth more than $1 million in refunds were filed from a single address last year, according to the Treasury Inspector General for Tax Administration.
The Belle Glade address ranked third nationally for number of returns filed. Investigators would not release the address, citing confidentiality rules on tax returns. But House Oversight Subcommittee Chairman Charles Boustany Jr., R-La., referred to it as a home.
Three of the top five addresses used to file potentially fraudulent returns were in Florida, the Inspector General reported.
Tampa and Miami were mentioned as the top cities where potentially fraudulent 2010 tax returns were filed last year.
Nationally, thieves are suspected of using the identities of 2,274 children, 105,000 dead people and almost 1 million people who don’t normally file returns to collect $5.2 billion in refunds.
The Inspector General’s analysis found that incidents of identity theft jumped 155 percent last year.
“The report really underscores just how bad a problem ID tax fraud is in Florida and around the country,” said U.S. Sen. Bill Nelson, who asked the Treasury Inspector General last year to investigate the extent of the problem. “It’s become an epidemic that’s costing law-abiding U.S. taxpayers billions of dollars. And it’s one we’ve got to fix. That’s why I’ve filed legislation aimed at putting a stop to these fraudsters.”
The IRS disputed some of the watchdog’s findings, including estimates of $21 billion in potentially fraudulent tax returns in the next five years.
Plantation IRS spokesman Mike Dobzinski said Monday that his agency “along with the Department of Justice, has significantly stepped up its activities to pursue those who attempt to steal identities to commit tax fraud.” That will help cut down on future abuse, he said.
But Rep. Boustany was concerned that the IRS wasn’t spotting suspicious multiple filings at one address.
In addition to the Belle Glade home, an Orlando post office box allegedly received $1,088,691 for 703 suspected fraudulent tax returns filed, he said. A home in Tampa netted even steeper refunds: It allegedly sent out 518 potentially fraudulent fake returns but collected nearly $1.8 million from Uncle Sam, Boustany said.
David Barnes, public affairs liaison of the Treasury Inspector General for Tax Administration, said his agency “did not analyze the fraud by geographic or metropolitan location.” So he said he couldn’t comment on why the state — and South Florida in particular — leads the nation in identity theft.
His agency’s report showed, for example, that Miami thieves allegedly submitted nearly 75,000 bogus tax returns last year and received nearly $281 million in refunds.
It is “one of the biggest constituent problems we see in our office,” said alex Conant, a spokesman for U.S. Sen. Marco Rubio. The tax fraud “often prevents law-abiding taxpayers from receiving the tax refunds they deserve.”
“Over the past several years my office has seen a dramatic increase in the number of individuals needing assistance because of tax refund identity theft, a clear indication this crime is becoming a big problem in South Florida,” added U.S. Rep. Debbie Wasserman Schultz, of Weston. That’s why she said she introduced a bill to help stop this problem and protect Americans.
Florida IRS spokesman Dobzinski said his agency is working hard to stop the fraud. This January, the IRS and Justice Department worked together to press 923 charges against 105 people in 23 states.
“To support our prevention efforts, we enhanced our return processing filters to improve our ability to identify false returns and stop fraudulent refunds from being issued,” he added.
The IRS also established a specialized unit that analyzes and develops leads on identity theft, Dobzinski said.
But others are skeptical with several South Florida tax preparers saying tax-related identity theft is up even more this year than last.
“We need to know why the IRS is not catching this fraud,” Rep. Boustany said.
Posted on August 30th, 2012 No comments
A South Florida couple has been sentenced to prison after pleading guilty to defrauding a federal agricultural disaster program.
A Miami judge on Wednesday sentenced 49-year-old Sergio Perez and 28-year-old Yaima Perez to more than four years in prison each. They were also ordered to pay more than $800,000 in restitution to the U.S. Department of Agriculture.
Court records show the couple used false identities to file numerous claims under agriculture loss programs created following hurricanes in 2005. They claimed losses for fictitious plant nurseries in the Homestead area of South Florida because of Hurricanes Katrina and Wilma.
The couple had earlier pleaded guilty to fraud conspiracy, wire fraud and aggravated identity theft charges.
Posted on July 10th, 2008 No comments
Some victims are hit through online banking or shopping, but most common cause is leaving purse or wallet in car
Tonia Hall didn’t know the problems she was creating for herself when she logged into her online banking account at the end of her work day last June.
She was was checking her balance before writing checks for household bills and running a few errands. The $1,000 in her checking account was more than enough to cover what she needed.
But the next morning, her bank called, wanting to know why she had emptied out her and her son’s accounts. Soon she was getting calls about checks she had written on her errands.
Her checks had bounced.
The bank log showed that five minutes after Hall had signed out and left the office, her account was hacked into, the money she was counting on to pay bills, cover checks and buy groceries and gas transferred to an unknown account, leaving Hall with debts and bounced checks.
Who entered her bank account, or how they did it, was never resolved, Hall said. Her bank refunded the lost money but couldn’t do anything for her reputation.
“To me, it was a lot of money,” said Hall, a single mother of two. “I still go places where, because of what happened, I can’t write a check. I didn’t do anything wrong.”
Hall is one of hundreds of Sonoma County residents who are victims of credit card and identity fraud.
“We get more reports of identity theft every day than traffic accidents,” said Santa Rosa Police Sgt. Mike Lazarini.
Credit card theft and fraud is the leading property crime in Sonoma County, officials with the Santa Rosa police and Sonoma County sheriff said.
The Federal Trade Commission estimates that as many as 9 million Americans have their identities stolen each year and 3.7 percent of American’s have had fraudulent purchases made to their credit.
In May, 36 cases of credit card and identity fraud were reported to the Santa Rosa Police Department. In the same time period, 22 cases were reported to the sheriff’s department.
“At local, national and international levels, it’s growing,” said Sheriff’s Sgt. Glen Lawrence.
Some victims, like Hall, had entered credit card and bank information online or used banking Web sites.
Others had simply lost their wallets.
Most commonly, Lawrence said, victims left their purses or wallets in their cars while running out for an errand or a walk in the park.
Many cases cross county or state lines. Some are international, making following the trail of a stolen identity, even through electronic purchases, difficult, Lawrence said.
But arrests are made.
Earlier this month, Tina Ryan was sentenced to nine months in Sonoma County Jail for copying credit card data from a Sebastopol company she had worked for and using the information to buy thousands of dollars’ worth of gifts. Investigators said Ryan bought more than 100 items with the stolen credit information.
In May, two Oakland women were arrested in Windsor on suspicion of using stolen credit identities to make purchases at Wal-Mart, Lawrence said.
Sheriff’s deputies arrested Lois Ann Fairman and Tyja Wilkins, who reportedly were using 30 stolen credit cards to make purchases. Detectives believe the women transferred information from the stolen cards to gift cards, Lawrence said.
No charges have been brought against the women in Sonoma County, but investigators are attempting to locate the victims and expect the case to be far-reaching, Lawrence said.
Credit card and identity fraud is easier to avoid than prosecute, Lawrence said.
“The most common theft begins when a victim leaves a purse or wallet in their car. It’s the most common and the most preventable,” he said.
Being cautious with mail, safeguarding personal information, shredding financial documents, credit card offers and receipts, ordering credit reports and using Internet sites carefully are all safeguards against fraud, Lazarini said.
By Laura Norton – THE PRESS DEMOCRAT