Legal News

?War Driving? 101: Feds Unveil Prosecution of Huge Identity-Fraud Case

By Dan Slater

Good morning, Law Blog readers, and welcome to the story of the biggest identity-fraud scam ever prosecuted in the United States. Eleven people from around the globe — the U.S, Estonia, Ukraine, Belarus and China — have been charged with with stealing more than 41 million credit and debit card numbers. The government said the defendants made “tens of millions” of dollars from the scheme, using the stolen data to make cards that withdrew “tens of thousands of dollars at a time” from ATM’s.

Here’s a front-page story from the WSJ; here’s a story from the NYT.

According to reports, a principal organizer of the ring was Albert Gonzalez, who was indicted by a federal grand jury in Boston on charges of computer fraud, wire fraud, aggravated identity theft, conspiracy and other charges. If convicted on all counts, he would face life in prison.

Here’s how the scam worked: Gonzalez & Co. allegedly drove around and scanned the wireless networks of retailers to find security holes — a scheme known as “war driving.” Once the thieves identified technical weaknesses in the networks, they installed so-called sniffer programs that tapped into the retailers’ networks for processing credit cards and intercepted customers’ PINs and debit and credit numbers that were stored there.

The affected retailers include T.J. Max, Barnes & Noble, Office Max and Sports Authority.

Gonzalez’s lawyer, Rene Palomino Jr., told the WSJ that Gonzalez plans to fight the charges and added that the government “has from a factual and legal point of view a very substantial and uphill battle proving the charges against” his client.

Full post as published by Law Blog - WSJ.com on August 06, 2008 (boomark / email).