Biting Off Too Much Credit

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Credit scores plummet when people fail to pay off their debts, making them very unattractive to potential lenders. (When credit scores go down, interest rates go up and obtaining a loan gets much harder.) Identity thieves can also do a significant amount of damage to a credit report. Fortunately, credit repair services can help credit-challenged people or victims of identity theft improve their credit profiles. But, according to an article published by the Indianapolis Star, the owner of a credit repair service used stolen Social Security numbers to improve his clients’ ability to make large purchases. (Like his clientele, this guy clearly bit off more than he could chew, and eventually got caught by authorities.)

According to the article, the credit repair service owner claimed that his business could help individuals who wouldn’t normally qualify for a loan purchase new vehicles and other high-priced items. His repair fee ranged from $2,000-$3,500 per customer. (His clients would have been better off putting that money towards paying off their debt.)

The credit repair business owner was assisted by a Californian co-conspirator, who provided stolen Social Security numbers (SSNs) and other illegally obtained documents. The business owner referred to the stolen SSNs as ”credit profile numbers,” and matched them and other documents including utility bill payments and lease agreements to carry out his fraudulent scheme.

The 38-year-old credit repair service owner was sentenced to serve 92 months in prison and three subsequent years of supervised release. He also was ordered to pay $679,000 in restitution. (I bet he wishes he could claim someone else’s identity.)His 39-year-old accomplice was sentenced to 40 months in prison for her part in the scam.

This identity thief was definitely no Robin Hood. (Stealing the identities of people with good credit and selling them to those with bad credit was definitely not a charitable exercise.)Although he may have originally intended to help those with poor credit to improve their situation, he ultimately took advantage of them, eventually causing more financial distress in the end. Nonetheless, consumers struggling with debt can learn something from this story – often the best way to deal with bad credit is to simply pay off your bills and only buy what you can afford.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Indy man sentenced in identity theft case,” written by Justin L. Mack and published by the Indianapolis Star on November 30, 2015.

An Indianapolis man who used stolen Social Security numbers to allow individuals with poor credit to purchase big ticket items has been sentenced to seven years and eight months behind bars.

U.S. Attorney Josh J. Minkler announced Wednesday the sentencing of David Day, 38, for his role in the fraud scheme. In addition to the 92-month sentence, Day has been ordered to pay $679,000 in restitution and serve three years of supervised release.

”Identity theft costs our economy billions of dollars and destroys the credit history of legitimate consumers,” Minkler said in a statement. ”Mr. Day will spend the next seven years in federal prison pondering his mistake.”

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.