Police agencies break up bank fraud, identity theft ring in NJ; 53 people charged

A suspect is helped off an Essex County Sheriff's bus at the Federal Court House, Thursday Sept. 16, 2010 in Newark, NJ. Federal prosecutors in New Jersey say 53 people are charged in a widespread identity theft and fraud investigation. (Joe Epstein)

NEWARK, N.J. – Federal authorities in New Jersey say they've broken up a large-scale identity theft and fraud ring that stretches from the insular Korean enclaves of northern New Jersey to U.S. territories in the Pacific.

Fifty-three people, many of them Korean immigrants living in New York and New Jersey, are charged with helping people fraudulently obtain credit cards, bank accounts and loans using illegally obtained Social Security numbers.

Authorities say the ringleaders operated a scheme to buy Social Security cards from brokers who fraudulently obtained them from Asian immigrants — mostly Chinese nationals — working in American territories, including Guam, American Samoa and Saipan.

They then resold the cards to Korean immigrants in the territorial U.S. who used them to apply for U.S. driver's licenses in California, Pennsylvania, Illinois, Nevada, New York and elsewhere. Several of the defendants used their identifications to apply for credit cards. Some used all the credit they obtained, buying luxury goods such as vehicles, designer bags or liquor, some of it to resell.

"The activity in this instance was a virtual crime superstore, with one-stop shopping for a variety of criminal needs," FBI Special Agent in Charge Michael B. Ward said. "The criminal activity was sophisticated, and the extent of the fraud committed by this group is believed to be substantial, if not staggering."

Forty-seven defendants were arrested Thursday and another already was being detained by the state. Authorities still are trying to locate five defendants.

The one in state custody, Kang-Hyuk Choi, is in jail facing charges in the May 2008 triple slaying of a Korean family in their home in Tenafly, N.J.

Choi, of Valley Stream, N.Y., is charged with killing his 27-year-old friend Han-Il Kim, then waiting hours in Kim's room before killing his mother and uncle.

Bergen County Prosecutor John Molinelli said Thursday that detectives investigating the killings believe Choi and Kim had been arguing over money from a similar identity and credit card scheme.

After authorities learned such schemes were widespread, the investigation expanded to include the FBI, the U.S. attorney's office and local law enforcement agencies, Molinelli said.

Choi was charged Thursday in a separate complaint with identity and credit fraud. It was not immediately clear if he had a lawyer.

Officials from the FBI and U.S. attorney's office said Thursday that 43 of the defendants are charged with participating in a large-scale criminal enterprise of fraud and identity theft. Separately, 10 people are charged with similar offenses.

Authorities say the alleged ringleader, Sang-Hyun Park of Palisades Park, N.J., ran the operation by using shell businesses and advertising the sale of U.S. identity documents in local Korean-language newspapers.

Authorities say Park employed a staff that included identity document brokers, staffers that worked to increase credit limits and boost scores for customers using the fraudulently obtained credit cards, and local merchants who would swipe the cards at their businesses to get banks to transmit them money, according to court documents.

It was not immediately clear if Park had a lawyer.

The defendants would max out the cards, then write checks from bank accounts opened under the names on the Social Security cards to cover the bill, thus increasing their credit line, according to the charges. Several defendants would then max out the new line of credit before the checks would bounce, according to court documents. Banks, retailers and credit companies were unable to collect from the defendants, as they were operating under the identities listed on the Social Security cards.

The Social Security cards used in the scheme all began with the prefix 586, indicating they were limited edition numbers issued predominantly to laborers in U.S. territories, according to U.S. Attorney Paul Fishman.

Fishman said it wasn't clear why the cards, which he said were no longer being used, were accepted at driver's license agencies across the U.S.

"Any loophole or risk that allows people to get fake identities for this purpose, can be a loophole that's exploited to get fake identities for other purposes," Fishman said. He added that his office is working with other law enforcement agencies to examine that issue.

A message left with the Social Security Administration was not immediately returned.