Baseball buddies steal
more than bases
Peter Porcelli and Kyle Kimoto were pillars of their
communities, self-made multimillionaires united by a love of baseball.
Porcelli, whose direct marketing company was nominated for a Tampa, Fla.,Chamber of
Commerce Small Business of the Year award, used his fortune to build the Tampa
Bay Smokers fast-pitch softball team that won world championships in 1996 and
1998. Kimoto, a record-setting college pitcher with Southern Utah University, ended his
pro career with a Frontier League club called "the Steal." Appropriately, as it
turns out.
Now they're both wearing federal prison uniforms for their
elaborate card scam that preyed on American's most vulnerable: people with poor
credit.
Using a lead list of 50 million potential customers, the duo
orchestrated an army of cold callers who followed a script that suggested they
were from Visa , MasterCard or other financial institutions that had turned down
the customer's credit card request.
The pitch: For a $159.95 processing fee, the customers could
now obtain a new MasterCard that would help rebuilt their credit. If they
declined, they might never own a credit card again, they were told.
The estimated 500,000 consumers who took the bait received either
a worthless debit card (there was no money in the account) or a phony card with
the MasterCard logo and meaningless embossed numbers and mag stripe data.
Estimated steal:
At least $80 millionWhy it's Hall of
Shame-worthy: Fraudsters walk among us, even as model citizensFinal score: Porcelli
-- 13 years (with credit for ratting out his partner); Kimoto -- 29 years.
What, you don't take kneecaps
anymore?
There was a day when loan sharks settled accounts the
honorable way, with a late-night visit by a couple beefy galoots. Now,
apparently, the new currency of choice is credit card numbers.
Authorities in Newark, N.J., arrested six people in
late 2009 in a scam that defrauded several hundred neighbors in adjoining
counties out of $1 million in bogus credit card charges. According to police,
the defendants in "Operation Cash Flow" had loaned millions to area
restaurants. When the restaurants fell behind on their payments, the loan
sharks accepted their customers' credit card numbers instead.
To quote the Soup Nazi: No soup for you!
Estimated steal:
$1 millionWhy it's Hall of
Shame-worthy: Are card numbers the new coin of the underworld?Final score: Operation
Cash Flow flows no more
If the doctor's bill
doesn't kill you ...
In a case that's not likely to make you feel any better
about your next hospital visit, a federal grand jury in Maryland indicted five
Baltimore residents in an alleged scheme to use stolen patient information from
Johns Hopkins Hospital to open credit card accounts and make more than $600,000
in "instant credit" purchases at retail stores.
The indictment alleges that a 25-year-old former hospital
employee improperly obtained names, addresses, dates of birth and Social
Security numbers of patients and the parents and guardians of minor patients.
Her accomplices then allegedly used the data to apply for credit cards and made
$600,000 in purchases on "instant credit" before the cards were received by the
victims. The defendants face up to 30 years in prison if convicted.
Estimated steal: More than $600,000Why it's Hall of
Shame-worthy: Bilking hospital patients and their families? How low is
that?Final score: A
maximum 30 years in prison is nothing to sneeze at
Taking card fraud to
the Maxx
In addition to unfairly targeting fit, literate Maxxinistas with
a taste for bargains, the TJX case is notable because the
ringleader, Albert Gonzalez, had simultaneously worked as a paid informant for
the Secret Service, which ultimately helped bring him down.
According to investigators, Gonzalez and his Miami crew
would drive the streets with laptops, searching for accessible computer
networks that they would then use to infect the retail sites with "sniffer"
programs to gain access to card data. They then sold the card information to
criminals or encoded their own blank cards to withdraw cash from ATMs.
Gonzalez is now serving two concurrent 20-year prison
sentences for his cybercrimes, which also include the security breaches of Heartland Payment Systems , Hannaford Supermarkets and 7-Eleven. The
Department of Justice estimates that Gonzalez may have hacked more than 130
million credit and debit cards.
Estimated steal: Potentially
more than $20 billion Why it's Hall of
Shame-worthy: Magnitude aside, TJX raises this disturbing question: Are we
employing the best hackers or merely training them?Final score: Gonzalez:
20 years; Maxxinistas: 0
Hollywood salon gives
stars a credit makeover
In a less star-struck world, the arrest of Beverly Hills
beauty salon operator Maria Gabriella Perez for credit card fraud might have
gone unnoticed. But when the customers she allegedly bilked for hundreds of
thousands of dollars in unauthorized credit card charges includes Jennifer
Anniston, Cher, Melanie Griffith, Liv Tyler and Anne Hathaway, consider this
cat fight on!
According to the affidavit, Perez ran up $68,000 in bogus
charges to the credit card of high-end jewelry designer Loree Rodkin. Most of
the disputed charges were allegedly made when the card numbers were entered
manually instead of being swiped.
In another instance, the salon allegedly charged $214,000
for untendered services to two American Express cards owned by an unnamed
actor. We can perhaps eliminate Bruce Willis, Michael Chiklis and Vin Diesel.
Then again, who knows?
Estimated steal:
At least $280,000Why it's Hall of
Shame-worthy: Burning Hollywood's A-List just makes our hair frizzle!Final score:
Perez, who proclaimed her innocence on Facebook, faces a maximum
sentence of 25 years if convicted
Who's gonna dispute a
20-cent fee?
The Federal Trade Commission recently shut down a four-year credit card scam that resulted in $10 million in unauthorized credit and debit
card charges to 1.35 million unsuspecting cardholders who barely noticed the one-time
fee of 20 cents to $10 on their statements. The money was ultimately routed
through 16 dummy companies to bank accounts in Eastern Europe and Central Asia.
According to the FTC, the unidentified scam artists used the
names of identity-theft victims to set up bogus companies and open more than
100 merchant accounts that process credit and debit card transactions. In some
cases, the fraudsters borrowed the identities of legitimate businesses.
Many card customers didn't even notice the small charge.
Those who did and bothered to call the toll-free number next to the charge on
their card statement were either met with a voice mail prompt that was never
returned or a disconnected number.
Acting on the FTC investigation, a U.S. District Court in
Illinois froze the assets of the 16 dummy companies in June 2010 and ordered
them closed pending resolution of the case.
Estimated steal:
$10 millionWhy it's Hall of
Shame-worthy: Could micro-charging be the future of cybertheft?Final score: Unidentified
"John Does:" $10 million; Officials unable to identify the fraudsters to date:
0
Find the missing
piece in this X-rated puzzle
In 2000, the Federal Trade Commission won a $37.5 million
judgment against a California-based adult website operation that illegally
billed credit and debit card customers for more than $40 million in X-rated
Internet visits they had not made and services they did not order.
According to the FTC, the Malibu husband-and-wife team and
their business partner, doing business as J.K. Publications Inc., bought a
list of 3 million valid Visa and MasterCard credit cards from Charter Pacific
Bank. But rather than use the list to validate card purchases, the defendants
used five different merchant accounts and four business names to debit the
cards for bogus Web visits and services.
How do you detect such a nickel-and-dime operation? Simple:
Nearly half of those who complained about the X-rated fees did not own a
computer.
Estimated steal:
$37.5 millionWhy it's Hall of
Shame-worthy: How hard would it be to detect a bogus charge for Internet
porn when you don't own a computer?Final score: In
addition to the monetary judgment, the defendants have been barred from serving
in positions that might tempt them to repeat the crime.
Who needs cards?
We'll scam 'em with terminals! terminals .
According to the Securities and Exchange Commission, the elderly
investors purchased a terminal for $5,000 from an entity owned by Digges and
leased it to another entity owned by Digges for placement in a retail store,
where it was to generate $50 per month -- or a 12 percent annual return -- for the investor.
Digges' Millenium Terminal Investment Program did not maintain the promised
reserves to guarantee the securities however, and ran as much as $125,000 per
month in the red.
Digges now has 99 years behind bars to think up his next
scam.
Estimated steal:
$15 millionWhy it's Hall of
Shame-worthy: Only lower life forms would defraud the elderlyFinal score: Digges:
room and board for life; his victims: 0.
You had me at Vanuatu
According to the SEC complaint, the Imperia Invest IBC website promised investors a daily
return of 1.2 percent by investing in Traded Endowment Policies, the British
term for viatical settlements. Investors were allegedly told that an initial
$50 investment would enable them to obtain an $80,000 loan from an unnamed
foreign bank which would be used by Imperia to purchase the TEPs and pay the
investor the guaranteed return.
The SEC says Imperia fraudulently claimed licensure and used
phony addresses in the Bahamas and the South Pacific island nation of Vanuatu,
and took steps to conceal the identity of its principals.
Investors also were told they could only access their
profits by purchasing a Visa debit card from Imperia for several hundred
dollars. The SEC says Imperia had no association with Visa and was not
authorized to use its name.
Estimated steal:
$4 millionWhy it's Hall of
Shame-worthy: A daily return of
1.2 percent?Final score: $4 million can buy a lot of margaritas on Vanuatu. No criminal charges have been
filed to date.
Misusing all these
cards gets confusing
Case in point: One Fannie Ophelia Henson, arrested for allegedly
using a stolen credit card to purchase $400 in gas and groceries at a Kroger
supermarket in Charlottesville, Va. To save a little additional stolen
money, police say Henson decided to use her own Kroger Plus Shoppers Card when
checking out with the stolen credit card, all of which was caught on store
surveillance video.
"I guess trying to use her discount card kind of helped
cement the case," said Detective Edward Pracher. "She may have absent-mindedly
just scanned her card, from what I can tell on the video."
Estimated steal:
$400Final score: Consumer
confidence in credit cards: 1; Ms. Henson: 0
