Authorities link 100 people in US, Egypt to ‘phishing’ identity theft scheme

By Thomas Watkins, AP
Wednesday, October 7, 2009

Agents arrest dozens for theft scheme in US, Egypt

LOS ANGELES — Authorities said Wednesday they have arrested 33 people in breaking up a crime ring in the U.S. and Egypt in which an elaborate “phishing” scam bilked bank customers out of at least $1 million.

Federal authorities said a total of 53 people were named in an indictment, while authorities in Egypt have charged 47 others in connection with the scheme. The 33 arrests so far in the U.S. were mostly in Southern California but also in Nevada and North Carolina.

All the U.S. suspects were charged with conspiracy to commit wire fraud and bank fraud, which potentially carry up to 20 years in federal prison, Assistant U.S. Attorney Wes Hsu said.

Some suspects, including alleged ringleader Kenneth Lucas, face additional charges including bank fraud and international money laundering. Lucas was awaiting an initial court appearance Wednesday and authorities didn’t know if he had been assigned a defense lawyer.

“This may sound like run-of-the-mill bank fraud but it is much more serious,” said Keith Bolcar, acting assistant director in charge of the FBI in Los Angeles. “This form of theft presents us with a new and elaborate form of con artist.”

At the center of the scam were spam e-mails masquerading as legitimate requests from banks and asking customers to submit personal information online. As part of the scam, millions of these so-called “phishing” messages were sent out using automated programs, authorities said.

According to the indictment, hackers in Egypt worked with cohorts in the U.S. to collect bank account information, then illegally accessed those accounts and transferred money to newly created fraudulent accounts.

FBI Special Agent Jason Smolanoff said there were thousands of victims in the U.S. The amount of cash stolen was somewhere between $1 million to $2 million, primarily from Bank of America and Wells Fargo accounts.

Federal authorities in Los Angeles praised the cooperation they received from their Egyptian counterparts, and said the indictment represented the largest identity-theft operation ever in terms of the number of defendants.

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