Thousands of envelopes containing fake California Employment Development Department claims have been mailed. Several people received this fake mail which is said to be a part of an elaborate scheme. This scheme intended to defraud citizens for millions of dollars.
The EDD Fraud Scheme
KCRA 3, a local news channel investigated the situation. In the end, multiple details about the scheme have been revealed. This scheme is said to not target people at random. In-fact it is built around an advanced identity theft network. This international criminal network run by organized criminals and is hosted on the dark-net.
Investigators tracked down recipients of the fraudulent EDD claims. This led investigators to people living in Florida and North Carolina. Possible matches also showed up in other states including Oklahoma, Wyoming and Arkansas.
In California, all the envelopes, contained real personal identities of the recipients.
The Beverly Hills Police Department launched a prove into the case. The agents discovered a few striking patterns of debit cards from the California EDD. These cards appear in public places such as pedestrian crossings, traffic stops, and more. This provided a glimpse into the large fraud scheme.
It was also found that many people were moving into the State of California with fraudulent intentions. Many people from all over the US move with the intention of acquiring an EDD debit card. This is done through an elaborate identity theft plan.
Police estimated the value of the fraudulent scheme. It was said that a card can have the value of as much as $20,000 USD. Fraudsters are apparently able to make up to in $1,000 card withdrawals each day. This fraud schemes estimated value is over $2.5 Million.
Suspects essentially use stolen identities to obtain several EDD cards. This allows criminals to possess large sums of money and make purchases. Many criminals use this to rent cars, buy expensive items and dining.
Taking Down the Fraud Scheme
Although investigations are still in early stages, authorities have managed to make some arrests. Several people connected with the EDD fraud scheme have been arrested. This fraud scheme reflects on dark-web facilitated identity theft and crime.
The Beverly Hills Police Department posted a press release on facebook. Law enforcement agents apprehended 33 people in the Beverly Hills area. All in connection to the fraudulent scheme.
More information was revealed on the arrested suspects. It was discovered that the criminals only traveled to California for the fraud. They rented expensive vehicles and purchased merchandise in the area.
The agents involved in the case managed to recover a lot of evidence. 129 credit cards have been seized. In total, these cards contained over $2.5 million.
KCRA 3 found that a large number of shopping sprees spooked the police. This led to the arrests after the store clerks noted the surge in luxury purchases using EDD debit cards. The employees then alerted the police. Additionally, offices encountered EDD debit cards, money and firearms in several traffic stops. These traffic stops were conducted on luxury cars such as Maserati's and Lamborghini's.
Eventually the case became a high profile investigation. EDD has not yet provided a number indicating the amount of lost funds. No comments have been made about by EDD about the fraud scheme, or about steps taken to contain the situation.
KCRA 3 also accessed court documents related to the scheme. It was found that the secret service was also running an investigation into a similar fraud scheme. This investigation has been active since May.
It was reported that the criminals employed multiple social engineering techniques. Social engineering was used to target online romantic relationships. Criminals convinced victims to open their bank accounts. They were then told to enable the loading of unemployment monies.
Once the unemployment funds were loaded onto the victims accounts the suspects took actions. The funds would be send overseas. The criminals would also empty the account of the victim. This case led t made it to the U.S. Attorney's Office. The office then instructed authorities to seize up to $50,000 from credit union accounts.
This fraud scheme is not a new problem. It has been around for a long while. This is an example of risk-taking criminals. Using credit cards acquired through identity theft is one of the riskiest things a criminal can do. Especially in this case where criminals used the cards to live a luxury life. This is also another example of dark-net facilitated crime. Without the dark-net, the stolen identities would have not been acquired. This means that it would be impossible to posses such cards without access to the dark-net.