Five men have been indicted on charges of participating in an identity theft ring targeting wealthy Americans. The defendants – four of whom were arrested today and are in custody in Michigan, Texas, Florida and Kentucky -- have been charged with stealing $1.5 million and attempting to steal another $10.7 million from their victims’ financial accounts. Another defendant was arrested in May and is in custody in New York.
The defendants charged are: IGOR KLOPOV (New York), WESTLEY WATSON (Michigan), LEE MONOPOLI (Florida), JAMES DALTON (Texas) and RICHARD HOSKINS (Kentucky).
The investigation leading to today’s actions revealed that the ringleader of the conspiracy was IGOR KLOPOV, a 24-year-old Russian with an expertise in mining the internet to obtain personal information about potential victims. KLOPOV was arrested in May after he came to New York in an effort to claim $7 million in gold that he thought had been purchased with money stolen from one of his victims.
The indictment alleges that KLOPOV generally targeted the home equity line of credit (HELOC) accounts of people who owned expensive properties and whose lines of credit were large. Among the victims are a Silicon Valley couple, the head of a major credit reporting agency, and a wealthy Texas businessman. KLOPOV found many of his victims through the Forbes 400 list. Many of the victims lived in states – such as Texas and California -- where property deed information is available on-line and KLOPOV was able to gain information easily about the value of property, size of outstanding mortgages and existing lines of credit.
The year-long investigation -- a joint effort by the United States Secret Service, the New York City Police Department and the Manhattan District Attorney’s Identity Theft Unit – began in 2006 when an undercover investigator with the Manhattan District Attorney’s Identity Theft Unit assumed the on-line identity of a KLOPOV accomplice and pursued an on-line correspondence with KLOPOV.
KLOPOV, who used many cyber identities -- “kirill”, “trancer”, “239855403”, “326193078”, “rayescrowchk”, “jamesbruesith”, “topfinancegroup”, “stayintheshadows”, “universalescrow” -- interacted with his co-defendants and co-conspirators only via e-mail or instant messaging. For that reason, it was difficult for law enforcement to uncover his true identity and a significant investigation was undertaken.
The undercover investigator, in the guise of KLOPOV’s recruit’s on-line identity, developed a relationship with KLOPOV and to maintain and solidify his relationship with KLOPOV, the undercover led KLOPOV to believe he was engaging in illegal activities to further the scheme.
The undercover investigation revealed that KLOPOV obtained personal identifying information by trolling the Internet. He created dossiers of background research on his targeted victims and even hired private investigators to provide him with additional information on his targets. He used on-line job hunting sites, such as Monster.com and CareerBuilder.com, to recruit accomplices. He provided his recruits, such as LEE MONOPOLI and other co-conspirators, with fake identification and documents, background information on the identity theft victims and even made all their travel arrangements, including reservations at five-star hotels and town car limo services. KLOPOV paid for the recruits’ travel expenses using stolen credit card numbers.
WESTLEY WATSON was hired by KLOPOV to create high-quality counterfeit identification for the recruits. WATSON also forged documents that the recruits would need in order to steal funds from the identity theft victims’ financial institutions In addition, WATSON forged other documents, for example, powers of attorney and funds transfer request forms which were necessary for KLOPOV’s schemes. The fraudulent transfer request forms were used to transfer the stolen funds to accounts held by RICHARD HOSKINS and other co-conspirators. JAMES DALTON was hired by KLOPOV to receive and distribute unauthorized checks and other items in connection with these fraudulent account withdrawals.
For example, on December 15, 2005, KLOPOV contacted Fidelity Investments, and requested that approximately $1 million worth of stock held in the account of a Silicon Valley couple be sold. On that same day, a recruit showed up at the Fidelity Investments office in San Jose, California with a counterfeit power of attorney, ostensibly signed by the couple. On December 20, 2005, $1,050,000 was wired from the couple’s account to an account at Washington Mutual Bank in the name of one of KLOPOV’s co-conspirators. Later that same day, at KLOPOV’s direction, almost $1 million was transferred by wire to bank accounts in Russia.
In another scam, in September 2006, KLOPOV gave one of his recruits the personal identifying information of a wholesale food broker from Dallas. KLOPOV set up the recruit’s travel arrangements to New York, instructed him to go to a branch of Washington Mutual in the East Village and withdraw $220,000 from the victim’s accounts. The recruit had counterfeit identification bearing the victim’s information but using the recruit’s photograph. The bank manager was suspicious and would not permit the transaction to be completed at that time.
Similarly, in October 2006, KLOPOV tried to steal $620,000 from a Merrill Lynch account held by an Oregon resident. In this case, KLOPOV provided a recruit with a copy of victim’s signature, a fake driver’s license with the victim’s personal identifying information and a photograph of the recruit. WATSON prepared the counterfeit documents, as well as documents requesting a wire transfer of $620,000 from the victim’s Merrill Lynch account. WATSON then sent the wire transfer request form to Merrill Lynch in Mount Laurel, New Jersey. Merrill Lynch, working with law enforcement prevented the transaction from being completed.
In November 2006, KLOPOV sent WATSON another victim’s personal identification, including the victim’s signature. WATSON created fake documents with the name of the victim, Anthony Pritzker who is President of Trans Union Credit, using co-defendant LEE MONOPOLI’s picture. MONOPOLI then went to a Manhattan branch of JP Morgan Chase with Mr. Pritzker’s fake identification and requested information on the victim’s accounts. Again, because of law enforcement involvement and alert bankers, the defendants were unable to obtain any money.
Finally, the investigation revealed that KLOPOV planned to steal a large sum of money and needed a method to launder the funds. He decided to steal money from an account at JP Morgan Chase Bank and buy gold with the funds. So, starting in late November, 2006, KLOPOV began maneuvering to steal $7 million from Charles Wyly, Jr. that could be used to purchase gold. He contacted Wyly’s financial institution, JP Morgan Chase Bank and, posing as Charles Wyly, Jr., he requested that a new checkbook be sent to a Houston address associated with his co-defendant JAMES DALTON. DALTON then sent the checkbook, which was linked to Wyly’s HELOC account, to WATSON. WATSON drafted a check from Wyly’s account in the amount of $7 million and sent it to a gold dealer in Westchester, New York. To verify the authenticity of the $7 million check, the gold dealer contacted its bank which also happened to be JP Morgan Chase Bank. JP Morgan Chase contacted Mr. Wyly directly and he informed them that he had never signed a $7 million check to purchase gold.
JP Morgan Chase notified members of the Manhattan District Attorney’s Identity Theft Unit and the United States Secret Service who were already investigating KLOPOV and investigators crafted a plan to arrest KLOPOV. Using the undercover investigator who had already developed a relationship with KLOPOV, the defendant was led to believe that the funds had actually been stolen from Mr. Wyly’s account and used to purchase gold bars. The United States Secret Service even arranged to have a picture of an undercover NYPD detective taken with the gold bars which was e-mailed to KLOPOV as proof of his purchase.
The undercover and KLOPOV then began making arrangements for KLOPOV’s travel to the United States in order to retrieve and sell the gold. KLOPOV did not want to travel directly to the United States so he made plans to travel via the Dominican Republic. He traveled to the Dominican Republic in mid-May and was met by U.S. Secret Service and NYPD undercover investigators. KLOPOV and the undercovers traveled by private plane to New York -- KLOPOV believed he was entering the United States illegally. On May 15, 2007, KLOPOV and the undercover agents landed in New York and he was arrested. He has been held in custody since his arrest.
The defendants have been charged with Conspiracy in the Fourth Degree, Grand Larceny in the First Degree, Attempted Grand Larceny in the First Degree, Money Laundering in the First Degree, Attempted Money Laundering in the First Degree, Grand Larceny in the Second Degree, Attempted Grand Larceny in the Second Degree, Money Laundering in the Second Degree, Attempted Money Laundering the in the Second Degree, Grand Larceny in the Third Degree, Attempted Grand Larceny in the Third Degree, Identity Theft in the First Degree, Forgery in the Second Degree, Criminal Possession of a Forged Instrument in the Second Degree, Criminal Possession of Stolen Property in the Fourth Degree and Criminal Possession of Forgery Devices. Money Laundering in the First Degree and Grand Larceny in the First Degree are both a class B felonies which are punishable by up to 25 years in prison.
Assistant District Attorney Jeremy Glickman presented the case to the Grand Jury under the supervision of Assistant District Attorney Antonia Merzon. ADA Merzon and ADA Aaron Karczmer are co-Chiefs of the Unit. Investigative Analyst Michelle Ragusa also assisted in the investigation.
The District Attorney’s Office thanked the following agencies for their work on this investigation: the United States Secret Service, including agents from the following offices: Washington D.C., New York, Michigan, Florida, Texas, California and Kentucky, and their Electronic Crimes Task Forces, as well as United States Postal Inspection Services; NYPD Officers from the 9th Precinct, the District Attorney’s Office (NYPD) Squad, the Evidence Collection Team and Forensic Lab, as well as local law enforcement agencies in Michigan (Wayne County Police Department), Florida (Florida Office of the State Attorney and the Broward County Sheriff’s Office, Economic Crime Unit), Texas (Montgomery county District Attorney’s Office) and Kentucky (City of London Police Department).
This investigation relied on the extensive cooperation of many financial institutions and businesses. The District Attorney’s Office thanked JP Morgan Chase Bank, Washington Mutual Bank, Merrill Lynch, Fidelity Investments, Bank of America, Deutsche Bank, FedEx, UPS, Ritz-Carlton Hotels, Hyatt Hotels, Park Central Hotel, Sofitel, Expedia.com, Ebay/Paypal, Yahoo!, America on Line and Comcast.
Update to Identity Theft Laws Proposed The Department of Justice has submitted to Congress new proposed legislation that seeks to update and improve current laws aimed at protecting Americans from the increasingly sophisticated crime of identity theft.
Combating Identity Theft The strategic plan is the result of an unprecedented federal effort to formulate a comprehensive and fully coordinated plan to attack this widespread and destructive crime. The plan focuses on ways to improve the effectiveness of criminal prosecutions of identity theft; enhance data protection for sensitive consumer information maintained by the public sector, private sector, and consumers; provide more comprehensive and effective guidance for consumers and the business community; and improve recovery and assistance for consumers.
The Identity Theft Task Force Developing reliable methods of authenticating the identities of individuals, such as “biometrics,” would make it more difficult for identity thieves to misuse existing accounts or open new accounts using other individuals’ information. The Task Force recommends that agencies gather together academics, industry experts and entrepreneurs who are exploring ways to encourage greater development and use of authentication systems, and hold a workshop or workshops focused on developing and promoting improved means of authenticating the identities of individuals.
Identity theft case filed in Los Angeles One of the largest identity theft cases filed in Los Angeles County involving 16 victims, five banks or credit card companies and losses in excess of $4 million - all part of the ongoing ChoicePoint investigation, Dist. Atty. Steve Cooley announced.
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