The thousands of envelopes containing fake California Employment Development Department (EDD) claims, which were posted to several people, are said to have been part of an elaborate scheme to defraud people of millions of dollars.
An investigation by the news channel KCRA 3 revealed that the scheme was built around identity theft, the dark web, and an international network of organized criminals.
On tracking down recipients of the fraudulent EDD claims, investigators were led to persons living in North Carolina and Florida – with possible matches showing up in Oklahoma, Wyoming, and Arkansas.
All names indicated in the envelopes sent to the California mailboxes belonged to real identities.
The case was marked by a probe by the Beverly Hills Police Department whose agents discovered a striking pattern of debit cards from the California EDD showing up in public – pedestrian stops, traffic stops and other avenues of service provided a glimpse into the burgeoning fraud scheme.
Reportedly, lots of people were moving into the State of California from other locations in the U.S. with the intention of fraudulently acquiring EDD debit cards through an elaborate identity theft plan.
The police estimated the monetary value of the cards to be as much as $20,000, with the fraudsters being able to make card withdrawals of about $1,000 dollars each day in a conspiracy estimated to run up to $2.5 million.
Essentially, suspects would obtain several EDD cards using stolen identities and possess large sums of money to be used to make purchases, including renting posh cars, buying expensive items and dining at restaurants.
Several Arrests Have Been Made
Although investigations seem to be at their infancy, the authorities have managed to arrest several people in connection with the EDD fraud scheme that reflects on the state of dark web-facilitated identity theft.
According to a media release that was published on Facebook by the Beverly Hills Police Department, law enforcement agents apprehended 44 people in the Beverly Hills area.
It was revealed that a majority of the arrested persons hailed from other states and only travelled to California to rent expensive vehicles and buy merchandise on the area’s high-end Rodeo Drive.
In highlight, the agents recovered 129 credit cards loaded with more than $2.5 million, and $289,000 in U.S. dollars from the suspects at the time of the arrest.
KCRA 3 Investigates revealed that a string of expensive shopping sprees spooked the police and led to the arrests after store clerks noted the surge in luxury purchases using the EDD debit cards and alerted the police.
In addition, officers came across EDD debit cards, money, firearms and money orders in the several traffic stops that yielded Lamborghinis, Maseratis and several other kinds of expensive sports cars.
Nonetheless, even as the case took as high profile approach, EDD has not provided a full account of how much money in lost funds were attributed to the fraud and identity theft scheme – including what steps they have taken to contain the situation.
Social Engineering for Fraud
According to court documents that were accessed by KCRA 3 Investigates, the Secret Service has been running a probe into a similar fraud scheme since May.
Reportedly, the criminals employed social engineering techniques to trick oblivious targets into online romantic relationships. The plan worked since the criminals convinced their victims to open their bank accounts and enable the loading of unemployment monies.
As soon as the employment funds were transferred, subjects operating in the U.S. would send the money overseas or the criminal organization would simply empty the account. The case led to a request by the U.S. Attorney’s Office to seize up to $50,000 from credit union accounts in July.