Synthetic Identity Theft
Synthetic identity theft is poised to become a bigger problem than regular identity theft:
Unlike traditional identity thieves, who purloin people's information to get loans or make purchases, fraudsters like Mr. Rose mix legitimate and phony data to create synthetic identities. This kind of fraud doesn't usually directly affect consumers. The big losers are banks, which get stuck with loan defaults and unpaid credit-card bills that identity thieves leave behind.
Actually, real people do get harmed:
The men paired fake names with Social Security numbers of real people. Adam Gregory, the purported Las Vegas resident, had the Social Security number of a real California resident.
The conspirators needed addresses for their synthetic identities and for a dozen or so shell companies that helped to facilitate the scam. Eventually they rented 200-odd apartments in 14 states. They kept binders of data in their Phoenix headquarters to keep the details straight.
The duo acquired business licenses, usually online, for the dummy businesses. A few had real offices with furniture; others rented "virtual" office space. After Messrs. Rose and Newton triggered the credit bureaus to set up no-hit files for their synthetic identities, their shell companies fed false data to credit bureaus.
Posted on November 5, 2007 at 6:14 AM • 23 Comments