Pricey Pumps the Price for Lawyer’s Advice to ID Scammers

More than 100 people, including a New York attorney, have been indicted in what is being termed the largest identity theft case ever prosecuted in the United States. The ring allegedly involved corrupt insiders at banks, stores and restaurants stealing customer data.

The suspects, members of five criminal gangs that operated primarily out of Queens County, New York, have ties to gangs in Asia, Europe, Africa and the Middle East, and were allegedly responsible for fraud losses that amounted to more than $13 million in the 16-month period between May 2010 and September 2011. Eighty-six of the defendants have been arrested, while the remainder are still being sought, according to the Queens County District Attorney’s office.

New York attorney Susan Persaud, who was arrested Oct. 4, is accused of aiding some of the defendants by providing them with information about how to conduct their crimes and evade authorities. Persaud, 34, allegedly received payment for her services in the form of expensive designer shoes. Persaud did not respond to a call for comment.

“This is by far the largest and certainly amongst the most sophisticated identity-theft credit card fraud cases that any of us have ever seen,” said Queens district attorney, Richard A. Brown, in a statement.

According to an Operation Swiper press release (.pdf), restaurant and store employees used hand-held skimming devices to swipe the bank card details of customers in some cases, while bank employees stole data in other cases.

That data was then passed to criminal colleagues who embossed the data onto blank cards and passed them to mules who went on high-end shopping sprees in New York, Florida, Massachusetts, California and elsewhere. The mules racked up charges, buying iPads, iPhones, and other Apple electronics, as well as designer handbags from Gucci and Louis Vuitton, and designer shoes and jewelry, much of which was fenced online for cash.

Not all of the defendants engaged in card crimes, however. At least four defendants were plotting an old-fashioned bank robbery — targeting a branch of the Flushing Savings Bank in Queens — but were thwarted after investigators learned of the plan through intercepted telephone calls and placed a marked police car in front of the bank to deter them.

Five defendants also were charged with stealing more than $95,000 worth of cargo containing drill bits and power tools from Quantas Airways at Kennedy Airport, and seven have been charged with stealing about $850,000 worth of computer equipment from the Citigroup Building in Long Island City. One of the defendants, Angel Quinones, worked at the building as a security guard for Allied Barton Security Services, while another defendant was a former employee of Citicorp.

A number of the suspects were living large while conducting their crimes, staying at five-star hotels like the Fontainbleau and Royal Palm in Miami Beach and at Las Casitas Village at El Conquistor in Puerto Rico, charging their rooms to victims’ credit card accounts. They also used fraudulent cards to rent luxury cars such as Lamborghinis and Porsches and, in one case, to lease a private jet to fly from New York to Florida.

The police and prosecutors told the New York Times that they received no tips from credit card companies or retail businesses when the fraudulent activity began, even though balances on stolen accounts were skyrocketing and should have set off alerts.

The investigation, dubbed “Operation Swiper,” began in October 2009 when police officers in Queens County launched a joint investigation with the district attorney’s office into an identity theft ring that was operating locally. The investigation quickly ballooned to involve physical surveillance, as well as wiretaps on dozens of phones. Authorities say they intercepted thousands of calls that had to be translated into English from Russian, Mandarin and Arabic.

Imran Khan, Ali Khweiss, Anthony Martin, Sanjay “Rocky” Deowsarran and Amar Singh were the alleged “bosses” of the criminal enterprises based in the U.S., who received lists of bank card data from skimmers in the U.S. and from associates in Russia, Libya, Lebanon and China. They allegedly contracted with others to embed the stolen data onto fraudulent cards. In some cases, the fraudulent cards included artwork and logos from financial institutions to make them look like legitimate cards. In other cases, the fraudsters also made forged government identification — such as a New York State driver’s license — to match the name on the forged credit card to make it easier to use.

Authorities raided 15 locations throughout New York City and Long Island — including several “mills” where fraudulent documents were manufactured — and seized about $650,000 in cash, seven handguns, and a truck full of electronics, shoes and watches, skimmers, card readers and card embossers.

Photo: James Merithew / Wired.com

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DoJ’s WikiLeaks Probe Widens to Include Gmail, ISP

The U.S. government’s investigation against WikiLeaks and its supporters went beyond its efforts to obtain data from Twitter. A new report reveals that the government also used secret orders to obtain information from Google and internet service provider Sonic.net pertaining to the accounts of U.S.-based, former WikiLeaks spokesman Jacob Appelbaum.

The orders, issued last January for Google and in April for Sonic, remained secret until Sonic succeeded to convince a court to lift the seal on its order so that Appelbaum could be informed about it, according to the Wall Street Journal.

The order to Google directed the search giant to hand over the IP address Appelbaum used to log into his Gmail account as well as the email and IP addresses of anyone he communicated with going back to Nov. 1, 2009. That’s the month that former Army intelligence analyst Bradley Manning is believed to have first made contact with WikiLeaks before allegedly leaking two U.S. military videos, as well as more than a million classified and otherwise sensitive military and U.S. State Department documents. The order to Sonic sought the same type of information, including the email addresses of people with whom Appelbaum communicated, but did not seek the content of that correspondence.

Sonic told the Journal that it sought to fight the order but lost, and was forced to turn over the requested information. Challenging the order was “rather expensive, but we felt it was the right thing to do,” Sonic’s chief executive, Dane Jasper, told the newspaper.

It’s unclear if Google fought the order it received.

“Obviously, we follow the law like any other company,” a Google spokeswoman told CNET. “When we receive a subpoena or court order, we check to see if it meets both the letter and the spirit of the law before complying. And if it doesn’t, we can object or ask that the request is narrowed.”

Both Sonic and Google asked the court to lift the seal on the orders so that Appelbaum could be told about the requests, a source told the Journal. A court agreed to unseal the Sonic order on August 31.

The government is seeking the records under 18 USC 2703(d), a provision of the 1994 Stored Communications Act that governs law enforcement access to non-content internet records, such as transaction information. More powerful than a subpoena, but less so than a search warrant, a 2703(d) order is supposed to be issued when prosecutors provide a judge with “specific and articulable facts” that show the information sought is relevant and material to a criminal investigation. But the people targeted in the records demand don’t have to be suspected of criminal wrongdoing themselves.

Prosecutors also used a 2703(d) order last December to seek information from Twitter about accounts belonging to Appelbaum, as well as WikiLeaks founder Julian Assange, Bradley Manning, Dutch hacker and activist Rop Gonggrijp and Birgitta Jonsdottir, a member of Iceland’s parliament.

That order sought full contact details for the accounts (phone numbers and addresses), IP addresses used to access the accounts, connection records (“records of session times and durations”) and data transfer information, such as the size of data files sent to someone else and the destination IP.

The EFF and the ACLU had sought to fight the Twitter order, arguing in part that it violated the accountholders’ First Amendment rights. But in March, Judge Theresa Buchanan, in the Eastern District of Virginia, ruled that because the government was not seeking the content of the Twitter accounts, the subjects did not have standing to challenge the government’s request for the records.

It has long been suspected that the government used similar orders to obtain information about WikiLeaks supporters from ISPs, e-mail providers like Google and social networking sites like Facebook, but this had remained unconfirmed until now. Google had previously refused to comment about whether it had obtained an order in the WikiLeaks investigation.

A number of sealed dockets in U.S. District Court in Alexandria, Virginia, suggested that there were at least four Justice Department records demands issued in the same manner as the December 2010 demand sent to Twitter. Last May, the American Civil Liberties Union, in conjunction with the Electronic Frontier Foundation, asked a federal judge to open those dockets to the public.

The orders are part of a grand jury investigation into leaks of classified information provided to WikiLeaks. Of all the people being targeted in the investigation so far, only Bradley Manning has been charged with any crimes. Manning has been in prison since May 2010 and is awaiting trial on charges that he improperly downloaded classified documents and passed them to a third party.

Image: Jacob Appelbaum speaking on behalf of WikiLeaks at The Next HOPE conference in New York in July 2010. Courtesy Cosmiclint/flickr

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Calif. Governor Veto Allows Warrantless Cellphone Searches

California Gov. Jerry Brown is vetoing legislation requiring police to obtain a court warrant to search the mobile phones of suspects at the time of any arrest.

The Sunday veto means that when police arrest anybody in the Golden State, they may search that person’s mobile phone — which in the digital age likely means the contents of persons’ e-mail, call records, text messages, photos, banking activity, cloud-storage services, and even where the phone has traveled.

Police across the country are given wide latitude to search persons incident to an arrest based on the premise of officer safety. Now the nation’s states are beginning to grapple with the warrantless searches of mobile phones done at the time of an arrest.

Brown’s veto message abdicated responsibility for protecting the rights of Californians and ignored calls from civil liberties groups and this publication to sign the bill — saying only that the issue is too complicated for him to make a decision about. He cites a recent California Supreme Court decision upholding the warrantless searches of people incident to an arrest. In his brief message, he also doesn’t say whether it’s a good idea or not.

Instead, he says the state Supreme Court’s decision is good enough, a decision the U.S. Supreme Court let stand last week.

“The courts are better suited to resolve the complex and case-specific issues relating to constitutional search-and-seizure protections,” the governor wrote.

Because of that January ruling from the state’s high court, the California Legislature passed legislation to undo it — meaning Brown is taking the side of the Supreme Court’s seven justices instead of the state Legislature. The Assembly approved the bill 70-0 and the state Senate, 32-4.

The bill’s sponsor, Sen. Mark Leno (D-San Francisco), was flummoxed by Brown’s action. “It was a curious veto message suggesting that the courts could resolve this more effectively than the state Legislature,” he said in a telephone interview.

Under California statehouse rules, neither Leno nor any other lawmaker may introduce the legislation for at least a year.

Orin Kerr, one of the nation’s leading Fourth Amendment experts, said Brown should have backed the state’s Legislature. “I think Governor Brown has it exactly backwards. It is very difficult for courts to decide Fourth Amendment cases involving developing technologies like cellphones,” he said.

In 2007, there were 332,000 felony arrests in California alone — a third of which did not result in conviction.

Brown’s veto also shores up support with police unions and the Peace Officers Research Association of California, a police union that opposed the legislation and recently donated $38,900 to Brown’s campaign coffers. “Restricting the authority of a peace officer to search an arrestee unduly restricts their ability to apply the law, fight crime, discover evidence valuable to an investigation and protect the citizens of California,” the association said in a message.

That support would be key if Brown decides to seek a second term.

In the last year alone, at least seven police unions donated more than $12,900 each to Brown. Those unions, including the California Association of Highway Patrolmen and the Sacramento County Deputy Sheriff’s Association, had given Brown more than $160,000 in combined contributions.

Photo: DonkeyHotey/Flickr