ID theft ring targeted charitable donors: prosecutors

Reuters News
Posted: Dec 19, 2011 4:54 AM
ID theft ring targeted charitable donors: prosecutors

NEW YORK (Reuters) - A crime ring used corrupt employees in banks, an Audi car dealership, and the nonprofit United Jewish Appeal-Federation of New York to steal identities of well-heeled customers, clients, and donors and defraud them of more than $2 million, New York authorities said on Friday.

The indictment of 55 defendants on a variety of grand larceny, identity theft and other charges marked the fourth major cybercrime prosecution announced in as many weeks, Manhattan District Attorney Cyrus Vance said at a news conference, underscoring his contention that "the Internet is the crime scene of the 21st century."

Victims of the alleged scheme included several well-known donors to the UJA, among them the hedge fund Paulson & Co. and the nonprofit Starr Foundation, established by American Insurance Group founder Cornelius Vander Starr.

The arrests were a result of an 18-month New York Police Department investigation, which began when authorities learned a group of people were "religiously" visiting a city post office to purchase money orders using debit cards that eventually were found to have phony deposits, said Deputy Inspector Gregory Antonsen, head of the NYPD financial crimes task force.

Several of the individuals arrested are members of a New York gang group known as the Outlaws, Antonsen said.

"The case also demonstrates another trend: how street gangs are moving a lucrative part of their business inside and online," Vance said.


A UJA employee named Tracy Nelson, 24, who processed donations for the charity, used her position to steal the financial information of hundreds of victims, prosecutors said.

Her boyfriend did the same at a Brooklyn Audi dealership, while other employees at a residential property management company and a Chase Bank branch also stole identities, according to court documents.

The information was passed on or sold to others, who used the data to forge checks, create duplicate credit cards, and commit fraudulent bank transactions, Vance said. They also relied on co-conspirators who provided valid bank accounts to facilitate the fraud, he said.

"UJA-Federation has fully cooperated with law enforcement's investigation into this matter, providing all information and materials that have been requested, and will continue to do so until this matter is closed," said a spokeswoman for the group, Eileen Sullivan.

The victims were made whole by their financial institutions, which include JPMorgan, Citibank, TD Bank, American Express, and Discover, authorities said.

A raft of search warrants executed Friday turned up duplicate credit and debit cards, scanned images of hundreds of checks written to the UJA, and three luxury cars investigators believe were bought with stolen money, Vance said.

Two suspects in the alleged conspiracy were murdered in cases that remain unsolved, police said, but authorities believe there is likely a link between their deaths and the scheme.

A call to Nelson's defense attorney, Glenn Abolafia, was not immediately returned. Most of the defendants were arraigned in state Supreme Court throughout the day Friday.

(Reporting by Joseph Ax; Editing by Jerry Norton)