NEWARK, N.J. — Many scam artists are looking for ways to get rich quick.
Then there are the 18 people authorities said spent years meticulously creating fake identities, building up their credit scores and credit card limits, and borrowing money they never repaid in what may be one of the nation's largest credit card fraud rings.
The 18 were charged last week in what authorities said was a sprawling international scam in which at least $200 million was stolen using at least 7,000 identities and 25,000 credit cards. The enterprise spanned 28 states and eight countries, authorities said.
The elaborate fraud involved an outlay of patience and meticulous planning rarely seen in such a large credit card fraud case, authorities and industry analysts said.
"What they did was very painstaking, very sophisticated and took a lot of time," said Paul Fishman, the U.S. attorney in Newark, who announced the arrests Tuesday.
The scam started at least as early as 2007, Fishman said. The group created thousands of fake identities, sometimes using real Social Security numbers. One credit card was opened with the identity of a 6-year-old boy; others used Social Security numbers of people who were willing to leave the United States for a fee, Fishman said.
"You have to pull a lot of stuff together. You have to have a phone service and address where you're paying bills," said Avivah Litan, a vice president and analyst at Gartner Research. "They have to do a lot of background work to look like a real person."
The group then opened credit cards with small credit limits. The users purchased everyday items like groceries and paid off the bills so they could increase their credit score. That way, they were able to give the impression that they were a trusted customer, giving them access to a higher credit limit and cash advance checks.
Litan said one of the most impressive aspects of the scam was that the defendants were able to access so much credit during the financial crisis. They probably had to appear to be sterling customers in order to pump up their credit limits so high.
"They did this the last few years when credit was hard to come by," Litan said. "The banks don't give you $50,000 right away."
Authorities allege the defendants added one another and sham businesses as authorized users on credit card accounts, giving more people access to good credit. They received credit card machines with the scam businesses and paid themselves with the cards, Fishman said, and three jewelry stores in Jersey City were allegedly complicit in the scheme.
The defendants then maxed out the cards, buying electronics, jewelry and luxury cars. They also took out loans or cashed the checks and never paid back the money, authorities said.
Authorities did not directly say how the fraud came to light, but a co-conspirator was named in court documents, indicating that someone may have been cooperating.
Al Pascual, senior analyst at Javelin Strategy and Research, said it would be very unlikely for credit bureaus to have caught such a fraud if the cards were initially being used responsibly and paid off. Red flags also would not have been raised if accounts were opened using legitimate Social Security numbers that did not have any prior credit accounts, like a child.
"The activity itself shouldn't have garnered any notice until they stopped paying the bills," Pascual said.
18 accused in huge credit card scam were patient, authorities say
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18 accused in huge credit card scam were patient, authorities say
