Credit Card Fraud Is Very Profitable and Easy to Do, No Wonder Credit Card Crimes Are Happening All Over the Country

Credit Card Fraud involves creating fake credit cards legitimately issued by lenders and to borrow cash or buy things using that credit card without any intention of repaying the credit card debt. Credit Card Fraud can also include identity theft, where legitimate credit cards or credit histories are used to get cash or purchasing power.

With the ease of the internet and some leg work to insure access to a mailing address or drop box, credit card fraud is extremely easy to accomplish and it’s become a very profitable enterprise for many people out there.   Which is why both federal and state law enforcement are going after credit card fraud in a big way.

[For more information on Credit Card Fraud, check out our web page discussing Credit Card Fraud in detail.]

Justice Department Nabs $200 Million, 10 Man Credit Card Fraud Enterprise Operating Across the Country

This week, there’s big news about a group of ten people who got together and made around $200,000,000 for themselves (that’s right, Two Hundred Million Dollars) in a credit card scheme. The only reason we know about their operation is because they got caught.

Eric Holder and his Justice Department announced the indictment of these ten defendants, who now face federal bank fraud conspiracy charges along with wire fraud charges based upon their scheme. These aren’t young people either: one of them, Tarsem Lal, is 74 years old. Another defendant, Babar Qureshi, is 59 years old.

Here’s what they were doing, and doing very well, for a long time. First, they would make up someone — just like Tom Clancy or Danielle Steele does, create a fictional character. However, instead of weaving a plot and building a novel with their new character, these folk created fake identification stuff for them which they then used to build fake credit reports for the made-up character with the three big credit bureaus.

This took some effort and they were nothing if not efficient and hardworking in their efforts. Along with the fake character names, they built up false backgrounds for each of them complete with post office boxes, homes, or apartments all around the United States as the addresses used for the credit information. According to the indictment, there are over 1800 drop addresses scattered around all parts of the country.

Once this was accomplished, it was time to stoke the fire of that credit report, and they fed fake information to the credit bureaus about how great this “person” was, creditworthiness-wise. Soon, their creation had an excellent credit score and a nice credit history.

Now came the payoff for all that hard work: they used this credit record to borrow money and to buy things. And the FBI totals the amount that was borrowed and purchased by these ten people as over $200,000,000.00. That’s $20 million each, if you do the math.

Remember, though, that all this stuff is the basis of the indictment. No one has been convicted and sentenced (yet) – but if they are convicted of these credit card fraud charges, then they are facing a maximum of 30 years in prison and a $1,000,000 fine (or twice the gain or loss caused by the offense).

Two of the group members have, however, entered into plea deals with the Justice Department. Qaiser Khan, 49, pled guilty to one count of conspiracy to commit bank fraud; and Shafique Ahmed, 52, pled guilty to a charge of conspiracy to commit bank fraud. As part of their plea agreement, Khan and Ahmed have provided background information on how this massive credit card fraud operation was built and how it was operated in order to get what the FBI calls “tens of thousands of credit cards” which were used to get cash and buy things.

Example of How Easy Credit Card Fraud Can Be: Yesterday’s Phoenix Credit Card Fraud Bust

Yesterday, two people were arrested by the local sheriff for credit card fraud in violation of Arizona law. Seems that an employee working for a medical billing service (where they handle the billing for a local doctor) allegedly took credit card information out of the files at work and along with her pal, began using them to buy stuff.

Now, the Maricopa County Sheriff’s Department has warned 46,000 patients whose financial information was routed through the billing service that they need to check their records because they are at risk of finding fraudulent charges on their credit cards as victims of credit card fraud.

Already, the Sheriff’s Department allegations have expanded to a number of alleged false purchases by the employee and her roommate, for everything from pizza delivery to buying tires.

The Federal Bureau of Investigation’s Tips to Avoid Credit Card Fraud

The FBI is so hot on the trail of Credit Card Fraud that it provides a tip sheet on its website to help people from falling victim to credit card fraud. Included among the FBI Tips:

• Don’t give out your credit card number online unless the site is a secure and reputable. Sometimes a tiny icon of a padlock appears to symbolize a higher level of security to transmit data. This icon is not a guarantee of a secure site, but provides some assurance.
• Don’t trust a site just because it claims to be secure.
• Before using the site, check out the security/encryption software it uses.
• Make sure you are purchasing merchandise from a reputable source.
• Do your homework on the individual or company to ensure that they are legitimate.
• Obtain a physical address rather than simply a post office box and a telephone number, and call the seller to see if the telephone number is correct and working.
• Send an e-mail to the seller to make sure the e-mail address is active, and be wary of those that utilize free e-mail services where a credit card wasn’t required to open the account.
• Consider not purchasing from sellers who won’t provide you with this type of information.
• Check with the Better Business Bureau from the seller’s area.
• Check out other websites regarding this person/company.
• Don’t judge a person or company by their website. Flashy websites can be set up quickly.
• Be cautious when responding to special investment offers, especially through unsolicited e-mail.
• Be cautious when dealing with individuals/companies from outside your own country.
• If possible, purchase items online using your credit card, because you can often dispute the charges if something goes wrong.
• Make sure the transaction is secure when you electronically send your credit card number.
• Keep a list of all your credit cards and account information along with the card issuer’s contact information. If anything looks suspicious or you lose your credit card(s), contact the card issuer immediately.