NY Arrests 7 in $1M Consumer Identity Theft

Seven suspects have been arrested in an identity theft scheme that netted more than $1 million in products and gift cards by tapping consumer charge accounts in four states, New York Attorney General Eric Schneiderman said Thursday.

Schneiderman has accused them of using the stolen information to make fake driver's licenses in a smoke shop in Greenwich Village and impersonate consumers with credit at major retail stores in New York, New Jersey, Pennsylvania and Connecticut.

He said the scheme has been in place since at least 2008. It was investigated by his office, federal Homeland Security agents and the southern New York U.S. attorney's office.

"The multistate identity theft ring that we dismantled today jeopardized the financial livelihood of vulnerable Americans already struggling in these economic times," said agent James T. Hayes Jr. of Homeland Security Investigations in New York.

Officials accuse the suspects of fanning out into the four states to hijack the credit of consumers at retail stores including Home Depot, Sears, Kmart, and Kohl's.

Agents say that gift cards were sometimes sold at about 70 percent of face value, and that other times members told checkout clerks they had forgotten their store credit card, then would use a fake driver's license and the victim's Social Security number.

Investigators used court-ordered wiretaps to interrupt some phone calls.

U.S. Attorney Preet Bharara called identity theft a particularly insidious crime.

"Victims are often unaware they've been robbed until days or weeks later, when they are hit with credit card bills for mysterious purchases made by criminal impersonators," he said. "Identity theft results in hundreds of millions of dollars in losses to unsuspecting victims and businesses, and victims may have to spend countless hours just to get their lives back in order."

The suspects from New York City and Long Island are charged with various counts of conspiracy to commit access device fraud, conspiracy to produce fake driver's licenses, and aggravated identity theft. All are felonies that carry prison sentences. Their lawyers haven't been identified.

"Today's arrests send a strong message to identity thieves in this state: they will be caught and prosecuted," Schneiderman said.