The Canadian Credit Card Scam: How Did It Happen?
Credit card scams are nothing new. It's true that they can cause angst and frustration among consumers, but most issuers of credit cards today have fraud protection for their cardholders. Plus, the overwhelming majority 
of credit card swindles are small scale-operations where the financial losses aren't that high.
Periodically, a data breach will be reported at a large company. These cases are often more costly because they allow thieves to gain access to consumers' credit card numbers and/or sensitive information. This data can be used to open bogus accounts and run up charges under a false identity.
But even these schemes pale in comparison to a recent case of credit card fraud overseen by a Canadian man. The proof is in the final damage tally: 22 banks billed, 600 fake bank accounts opened, up to $5 million in fraudulent charges, and some 38,000 victims who had their sensitive information stolen.
Last month, 30-year old Adekunle Adetiloye was sentenced to more than 17 years in a U.S. prison for masterminding one of the most far-reaching financial fraud plots in American history. The Nigerian native was arrested in Toronto in December of 2007 and has been in U.S. custody since March of 2010. At the time of his capture, he reportedly owned a luxury condo and a Range Rover and had taken several trips to England - all while unemployed and receiving welfare.
So how did Adetiloye do it?
- He incorporated Commet Consultant Inc. and Syspac Financial Services in the state of Delaware as debt collection companies.
- Through these entities, he gained access to ChoicePoint, Lexis Nexis, and other commercial data providers which only exchange information with debt collection firms, financial institutions, and law enforcement agencies.
- He used that access to retrieve the private and sensitive information of tens of thousands of people, most of whom were professionals in the health care industry.
- Posing as these individuals, he opened bank, debit card, and credit card accounts and used these accounts to rack up fraudulent charges.
Investigators are saying that Adetiloye organized one of the most massive and complex financial scams ever perpetrated. The case has taken five years to investigate and then litigate, and the sentencing phase alone produced some 12,000 court documents. The crime fell under American jurisdiction because US Bank intercepted some calls made by Adetiloye. When he was confronted, he had two credit cards in his wallet with names other than his own.
Despite the successful prosecution of Adetiloye, numerous questions still remain about how he was able to pull off such a wide-ranging criminal enterprise.
- How did he convince data providers that his businesses were legitimate in order to access sensitive information?
- Why weren't his businesses audited or even suspected of wrongdoing until well after the bogus accounts were opened?
Hopefully in the coming months, answers will be found as to how Adetiloye was able to succeed in his colossal criminal plot -- and then measures will be taken to ensure that it does not happen again.
5-7-2012
by Chris Martin
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4-6-2012
by Dan Seitz
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12-5-2011
by Neil Hayashi
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