Feds Foil Dummy Card Charge Scam

The Federal Trade Commission has announced it has uncovered a $10 million identity theft ring that affected more than a million consumers.

The Blog WalletPop reported that scammers created realistic sounding company names and took personal information from U.S. victims, then charged their credit cards $10 or less. When consumers called a toll free number to ask about the charges, they found it was disconnected.

Steve Wernikoff, an FTC staff attorney, told the Cleveland Plain Dealer that the criminals lifted tax identification numbers of real nonprofits and businesses, set up dummy companies and established a fake Web site and call forwarding apparatus.

Payment processors and online job seekers then played into the scheme, with 14 job applicants being tricked into serving as "money mules." They set up bank accounts to act as “finance managers” and create limited liability companies to handle U.S. accounts for a foreign employer. They deducted their own salaries and forwarded the rest of the payments taken from victims’ credit cards to bank accounts in Lithuania, Estonia, Latvia, Bulgaria, Cyprus or Kyrgyzstan.

“I've characterized this as a really patient scam," said FTC staff attorney Steve Wernikoff. "They were able to go under the radar."

A federal judge in Illinois froze the accounts linked to the 16 fake companies, but those accounts contain only about $100,000.