Thieves based in Chicago made off with nearly $50,000 by running a scam that gave them access to a Newberry Township man's home-equity line of credit, according to police.
Newberry Township Detective Sgt. Steven Lutz tracked down the bank account the stolen money was transferred to and on Jan. 6 filed charges against two Chicago men for the scam. But he was unable to recover the cash.
"The money was gone," Lutz said.
The detective has been working with Secret Service agents in Illinois, who had previously arrested one of the men Lutz was searching for, according to charging documents.
Arrested again: "He was just picked up (Wednesday) in Chicago by the Secret Service," Lutz said, and will be extradited to York County.
After being extradited, James K. Brown, 53, of 7750 S. Emerald Ave. in Chicago, will charged with theft by unlawful taking, theft by deception, access device fraud, identity theft, criminal use of a communication facility, computer trespass and criminal conspiracy on each count.
Brown had been arrested sometime last summer by Secret Service for allegedly running similar scams, according to court documents, but apparently had been allowed to remain free.
Still wanted is Larry Popoola, 43, of 5 E. Carriage Way Drive in Hazel Crest, Ill. He faces the same charges, Lutz said.
The scam: In August, Kris Mailey of Newberry Township alerted police after learning $49,000 had been transferred from his home-equity line of credit without his knowledge or consent, according to charging documents.
"This came out of nowhere," Mailey said. "It's scary how easy it is for people to get this (personal) information -- (and) for them to be able to impersonate me."
Lutz said it appears the scammers obtained Mailey's information either through the Internet, or paid for it through a legitimate credit-checking service.
By creating a "dummy" or "shell" corporation, criminals can use legitimate credit-check services to obtain people's financial information by requesting credit checks, the detective said -- and the information they pay for includes actual account numbers for people's line-of-credit accounts.
Phones compromised: A scammer then calls a victim's phone provider, claims to be having phone problems and asks the provider to forward all incoming calls to a new number, Lutz said. The new number, unbeknownst to bank officials, is an untraceable cell phone, he said.
Then the scammer calls the victim's bank, pretending to be the victim, and says he wants to transfer money from his home-equity line of credit to a different bank account, Lutz said. The scammer has enough personal information about the victim to sound legitimate.
As a safeguard, banks routinely call back the victim, using a phone number on file at the bank, he said. But because the victim's phone has been compromised, the call goes right to the scammers, and some banks are then satisfied the request is legitimate, according to Lutz.
Scam account: Mailey's line of credit was through AmeriChoice Federal Credit Union, according to charging documents, and the stolen money was transferred to a Bank of America account in the name of "J. Brown Ventures."
The fraudulent account has a listed address in Lancaster but was opened in Chicago, Lutz said.
Brown has told Secret Service investigators he opened fraudulent accounts for Popoola with the understanding Brown would be given cash to open a music studio, documents state.
It doesn't appear the scammers knew Mailey, Lutz said.
Worldwide: "Within a three-week time frame there were several other local police departments who received complaints about similar (scams)," he said, including three in Dauphin County and one in Lancaster County. "Most of the victims had their home phone numbers compromised, and one of them had their money wired to a bank in the United Kingdom."
Lutz said it's his understanding that because his investigation determined Mailey wasn't at fault, he is not liable for the $49,000.
Greendot cards: The scammers often use Greendot prepaid credit cards to pay for the credit checks they request, according to Lutz, who said the company does not require users to register names to buy cards.
"So they are virtually untraceable," he said. "The cards are a very hot commodity on the streets. They're traded on the street for pennies on the dollar."
Carol Fastrich, vice president of marketing for AmeriChoice Federal Credit Union, said that in the wake of the scam, credit-union officials reviewed their procedures.
"We followed all of our very stringent procedures, and the member suffered no loss," she said. "It was truly a case of identity theft."
-- Reach Liz Evans Scolforo at firstname.lastname@example.org.