NEWARK, N.J. – U.S. agents arrested four more individuals last week they believe are responsible for draining millions of dollars from credit unions and banks around the country by tapping into home equity lines of credit.
The arrests make a total of 17 individuals charged in the international scheme by which the suspects engineered fraudulent wire transfers or gained unauthorized access to the victims’ on-line accounts to drain HELOCs, then wired millions of dollars in proceeds overseas. The scheme is reminiscent of the TJX credit card breach, where stolen credit union and bank account information was sold over the Internet and used to siphon millions of dollars from American shoppers from sites all over the world.
"Home equity lines of credit are an expanding front in the battle against mortgage fraud," said Christopher Christie, U.S. Attorney for the District of New Jersey. ""Homeowners should carefully review their statements to make sure their hard-earned equity is not disappearing from under their noses."
Among the credit unions the suspects targeted were U.S. Senate FCU, Navy FCU, Pentagon FCU, State Department FCU, Affinity FCU, Financial Resources FCU, First Financial FCU, as well as JP Morgan Chase, Wachovia, Washington Mutual, Bank of America and dozens of smaller banks and credit unions.
Between December 6, 2007 and January 14, 2008 the following credit unions were also hit: BMS FCU, FDU FCU, L’Oreal USA FCU, New Jersey Gateway FCU, North Jersey FCU, Novartis FCU, Picatinny FCU and Self Reliance FCU.
The scheme was identified in a series of articles last summer by The Credit Union Journal which explained that the suspects used personal information they stole then call unwitting member service representatives or loan officers at credit unions and directed them to transfer HELOC funds to accounts they control. In one case, the thieves convinced Woodstone CU, in Federal Way, Wash., to transfer $665,000 from an elderly couple’s HELOC, which was rapidly sent overseas and out of the reach of U.S. law enforcement.
In another case last December 7, the suspects impersonated a member of U.S. Senate FCU during a call to a member service rep and convinced the rep to wire $280,000 to an account in Korea. One of the suspects who pleaded guilty in Virginia last month, had $110,000 of those funds transferred back to him from an account in Indonesia.
While credit unions typically verify the authenticity of a wire request by contacting the member at a telephone number on file, the suspects used one of two techniques to reroute the verification call. Either they would persuade credit union officials to change the account holder’s number on file to one they set up; or they would contact the local phone company to report a fake technical problem and have the calls forwarded to one of their own phones.
The four arrested last week, identified as Derrick Polk, 45, Oludola Akinmola, 37, Oladeji Craig, 39 and Oluwajide Ogunbiyi, 32, were charged in federal courts in Newark, Buffalo, N.Y., Los Angeles and Springfield, Ill. At least three suspects in the case have been detained overseas, authorities told The Credit Union Journal yesterday.
The suspects are part of an international identity theft ring operating in the U.S., the United Kingdom, Canada, China, Japan, Vietnam and Korea and have successfully drained more than $4 million from legitimate HELOC accounts, according to authorities. The proceeds from the scheme were wired to Japan, Nigeria, Canada, South Korea and other countries.
