The Dark Side

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35905365 - computer hacker stealing data from a laptop concept for network security, identity theft and computer crime

A recent study suggests that 25 percent of Bitcoin users are associated with illegal activity. Today’s fraudster from Illinois fits into that category. He committed identity theft fraud by purchasing the identities of people in 38 states from the dark web using Bitcoin, then used the personally identifiable information (PII) to commit unemployment fraud.

Today’s article reports that the Illinois man purchased the PII of his identity theft victims through online websites for approximately one dollar per identity. (You should be incensed that your identity is only worth one dollar. The cost of repairing the damage to your life after your identity is stolen is much more expensive.) He submitted employment claims using the names, birthdates and Social Security numbers (SSNs) of his victims.

Once the unemployment claims were approved, the fraudster directed the government benefits from multiple states to Green Dot debit cards, which were opened in the names of his victims. (The Visa and Mastercard debit cards are usable worldwide, anywhere Visa and Mastercard are accepted.) The GreenDot cards were used by the fraudster to make personal purchases.

 The Illinois man was apparently generous. He shared his website account, his GreenDot cards and several email accounts with co-conspirators so they could also file bogus claims for unemployment benefits. (His plan was so successful, he was able to repeat the scheme in 38 states.)

For nearly one year, the Illinois man and his co-conspirators filed approximately 380 fraudulent claims for unemployment benefits. (Considering that he purchased the identities of 845 victims through the dark web, there was more room for fraud.) Fortunately, various state agencies only approved and paid benefits on 42 of the claims, resulting in a loss of $54,006. It could have been worse. (If all 380 claims had been paid, the loss would have exceeded $3.8 million.)

In addition to the unemployment fraud, the Illinois fraudster used the PII of two victims to obtain two car loans totaling more than $100,000. (He provided copies of a fake driver’s license and utility bill to substantiate his fake identity.)

The fraudster pleaded guilty to one count of wire fraud in the identity theft fraud scheme that enabled him to carry out his unemployment fraud scheme. When sentenced, he is facing up to two years in prison for filing bogus claims with the Connecticut Department of Labor. He’s about to find out what happens to someone who goes over to the dark side to commit fraud. (One thing is for sure – he is definitely out of a job within the fraud industry. And, he definitely does not qualify for any more unemployment benefits.)

Today’s “Fraud of the Day” is based on an article entitled, Man Admits To CT Identity Theft, Unemployment Benefit Scheme,” published by Westport Weston on September 1, 2018.

A man has admitted to stealing the identities of people in 38 states – including Connecticut – to obtain unemployment insurance benefits.

Illinois resident has pleaded guilty to one count of wire fraud, and is facing up to two years in prison, for fraudulently filing claims with the Connecticut Department of Labor for unemployment benefits in the names of identity theft victims, using their names, dates of birth and social security numbers.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.