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Sep 29, 2003
BY JOHN HIELSCHER
Prince Melvin Guei wants to make you rich.
So do Elder Phil Mbom, Dr. James Ehizojie, Mulete Pedro and Gabriel Kibeki, the first son of Gadik Kibeki. All of these people have millions of dollars hidden away in their native west Africa. They just need to transfer their money into a U.S. bank account.
They are offering a cut of 20 percent or more of their fortunes -- Elder Phil says he has $45 million -- to someone who will provide them with their bank account number and some upfront money for legal and transaction fees.
Sound too good to be true?
It's known as the Nigerian scam, a long-running rip-off that the U.S. Secret Service says claims about 100 victims per day.
The scheme has even cost lives -- at least 15 people have been murdered after traveling to Nigeria to meet with the scammers.
Most victims lose some money. Later, they can lose their identities from disclosing personal and financial information to the con artists who use it to open fraudulent bank and credit card accounts.
Identity theft cost consumers and businesses $53 billion in the past year, according to a new report by the Federal Trade Commission.
Nearly 10 million Americans said they were victims of identity theft in the last 12 months, costing them $5 billion, and businesses and banks some $48 billion.
During the past five years, an estimated 27.3 million Americans fell victim to some form of identity theft, the FTC said in the first comprehensive study of the fraud.
Identify theft is a big-ticket item in terms of money and time, said Howard Beales, director of the FTC's Bureau of Consumer Protection.
Critical information
ID thieves typically use another person's information -- such as their name, Social Security number and credit cards -- to open bank accounts, obtain new credit cards, take out loans, rent housing and receive medical care.
ID theft can be hard to track down because the con artists are often nowhere near their victims.
Many people don't realize their identities have been stolen until creditors contact them to pay bills the crooks run up, or until a copy of their credit report reveals new accounts.
And most people don't even report ID theft. In the FTC survey, just 25 percent said they notified local law enforcement about the theft. Only 22 percent contacted a credit bureau to check their reports.
Beales said there is a simple reason why ID theft has boomed in recent years.
It is a fairly easy way to make money, he said.
In the past year, 3.23 million Americans discovered that new accounts had been opened in their names. In those cases, individuals said they lost an average of $1,180, while businesses and financial institutions lost $10,200 per case.
While laws limit consumers' liability in cases of identity theft, not all costs are covered. Victims averaged a loss of $160 for misuse of existing accounts, such as unauthorized charges on credit cards or telephone bills, while businesses lost an average $2,100.
Victims also lost countless hours trying to clear up their financial records.
Florida ranked sixth in the country in cases of identity fraud, with nearly 162,000 incidents, according to the FTC report. Miami was among the top five cities for ID theft.
When you have illegal immigrant activities, someone who steals your identity will sell it off the street to someone who needs a Social Security number and date of birth, and might sell it multiple times, said Theresa Adlam, a victim's advocate for ID theft with the Florida Attorney General's office.
More than 1,200 complaints have been filed with the state Attorney General since it opened a fraud hotline in January, she said.
Cases are referred to local law enforcement officials or to the Office of Statewide Prosecution if it involves organized crime rings.
Last month the Charlotte County Sheriff's Office charged two women with using ID theft to buy more than $13,000 worth of jewelry, phones and other items.
Jami Lee Walsh of Arcadia and Virginia Lee Hogg of Port Charlotte were charged with felony grand theft and criminal use of identification. Walsh allegedly obtained the bank account of a Port Charlotte woman off a personal check, then used the personal identification of a West Virginia woman to set up accounts.
Crime rings
While many ID theft cases are similar, some involve organized crime rings that steal from numerous victims.
The Florida Office of Statewide Prosecution currently has 96 active ID theft cases with up to 700 defendants, said Tom Sabaka, special counsel for computer crimes and identity theft.
The rings often use an insider, say at a credit card or insurance company, who sells personal financial information for $500 or more per name.
The names of those individuals, often holding top credit ratings, are used to apply for three or four credit cards with high limits.
They can exploit those for $30,000 or $40,000 with little to no effort, Sabaka said.
Last November authorities busted an identity-theft ring in New York that stole credit histories from at least 30,000 people. An employee of a software company was selling credit information he was able to download from Equifax, one of the three major credit bureaus.
Arrest and prosecution of identity theft cases can be difficult because the thieves often move through different law enforcement jurisdictions.
Sabaka is prosecuting a South Florida ring that he said ran its scam up and down the East Coast.
The group would get a large truck and head north, stopping in various cities and sending teams with bogus credit cards into malls to buy merchandise. They would fill the truck, then return home to distribute it.
Some critics say financial institutions need to do a better job of checking the identities of people who open bank accounts and credit cards. Consumer advocates want Congress to pass laws making it easier for victims to sue banks.
The profits from issuing credit cards fraudulently outweigh the costs to the companies, so they ignore the real plight of the victims, said Ed Mierzwinski of the U.S. Public Interest Research Group.
Banks contend they are working hard to cut their fraud losses, including better verification of customers.
New frontiers
The Internet has become a new hunting ground for ID thieves. Scams known as spoofing or phishing deceive consumers into disclosing their private financial details.
The con artists use bogus e-mails and Web sites that appear to come from legitimate companies. An e-mail will state there is a problem with the consumer's bank account or with an order from an Internet store.
The e-mail provides a link to a Web site designed to look like the real company's. The consumer is directed to fill out a form that asks for credit card numbers, bank account information, Social Security and other data.
In July the FTC brought its first case in this type of scheme. Consumers received authentic-looking e-mails saying they had to update their AOL accounts. The message included a fake AOL billing center link.
A 17-year-old teen used stolen information to collect at least $8,000. He paid a $3,500 fine and agreed to a lifetime ban on sending junk e-mail.
The Nigerian scam remains one of the longest-running schemes, and it's tapping higher technology.
It is also known as advance fee fraud or 4-1-9 schemes, for the section of the Nigerian penal code that addresses such crimes.
The thieves initially sent their urgent letters by conventional mail or fax, but now they are reaching many more potential victims via mass e-mailings. The Secret Service says it gets up to 500 pieces of scam literature every day from consumers.
The scammers use various names and pitches. Some say they are government officials in Nigeria or executives from official-sounding organizations like the National Electric Power Authority.
They claim to have access to millions of dollars in government or business funds, and they offer to transfer money into the target's personal bank account.
But right before the prize is to be transferred, the target is asked to send several thousand dollars in advance to cover attorneys' fees, insurance costs or taxes.
Sometimes they will ask for money three or four times.
The scam has been run for years out of Nigeria, the west African country where the government seems little inclined to pursue such fraud.
It has expanded to Asia, Europe, South America and even North America, making it tougher to track down, officials say.
Herald Trib
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