Employees Burned by ID Theft Often Turn to Insider Fraud

Earlier this week the Feds cracked down on one of the largest credit car theft rings ever. The ring created 7,000 false identities to obtain 25,000 credit cards. Then they ran the scam through real businesses in on the whole thing, in addition to 80 bogus companies using more than 1,800 addresses, according to the FBI.

Through a series of identity theft and fraudulent actions, they were swimming in the hard-earned cash of millions of other people and business owners like Scrooge McDuck did backstrokes in piles of gold.

“This is, as far as we can tell, one of the largest, if not the largest, credit card fraud cases ever prosecuted by the Department of Justice,” U.S. Attorney Paul Fishman said at a news conference earlier this week in Newark, New Jersey. “We have already documented losses of $200 million, and that number could quite well go higher.”

Authorities arrested 18 individuals in connection with the case throughout New York, New Jersey and Pennsylvania, though they admit there were likely others involved they have yet to apprehend.

This serves as another wake-up call for individual consumers and businesses alike – identity theft prevention should not be taken lightly! Remember when we said inside fraud can be a slow burn that turns a business to ash? Well, the same can be said of credit card fraud.

Everyone from the stay-at-home soccer mom to the small business owner working 80 hours a week to the CEO of a major corporation can be a victim of identity theft.

And since these scams often operate as clusters, if one of your employees just got taken for a ride, chances are others may have too. If multiple employees are put in precarious financial situations, they are much more likely to turn to insider fraud as a way to dig themselves out of a hole – and that doesn’t bode well for you or your company.

John Sileo is an identity theft expert and keynote speaker on internet privacy and risk management. His clients included the Department of Defense, Pfizer, and Homeland Security. See his recent work on 60 Minutes, Anderson Cooper and Fox Business.