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Federal Investigators Break Up Identity-Theft Ring

The three alleged identity thieves have victimized more than 30,000 people, according to authorities.

NEW YORK (AP) -- The high-tech scam that exposed the finances of more people nationwide to identity thieves was a wakeup call for consumers and law enforcement authorities surprised by its size, a prosecutor says.

"We have stumbled upon something that is bigger than any of us imagined, judging by the tens of thousands of people who were ripped off here," U.S. Attorney James B. Comey said.

The prosecutor said more than 30,000 people were victimized, some of them discovering that their bank accounts were drained, addresses changed, lines of credit opened and new credit cards opened without their approval.

Authorities said the scheme began about three years ago when Philip Cummings, a help-desk worker at Teledata Communications, sold passwords and codes for downloading consumer credit reports to an unidentified person. Teledata, a software company, provides banks with computerized access to credit information databases.

Cummings was allegedly paid roughly $30 for each report, and the information was then passed on to at least 20 other people, who set out to make money from the stolen information, prosecutors said.

"The potential windfall was probably far greater than the content of a bank vault, and they didn't even need a getaway car; all they needed was a phone and a computer, or so they thought," said FBI Assistant Director Kevin P. Donovan.

More than 15,000 credit reports were stolen from Experian, a credit history bureau, using passwords belonging to Ford Motor Credit Corp., officials said.

They said thousands of other credit reports were stolen from companies such as Washington Mutual Finance Co. in Crossville, Tenn.; Dollar Bank in Cleveland; Sarah Bush Lincoln Health Center in Illinois; the Personal Finance Co. in Frankfort, Ind.; the Medical Bureau in Clearwater, Fla.; Vintage Apartments in Houston; and Community Bank Chaska in Chaska, Minn.

As he announced the arrests of three men blamed for giving others access to credit reports, Comey predicted Monday that the costs of the scam would rise "many, many millions" above the $2.7 million already counted.

In nearly every instance, individuals will recover the money they lost, sometimes after time-consuming and stressful efforts to prove they were victims and to clean their financial records, authorities said.

"Their liability will be limited," Comey said. "The people that take the hit ultimately will be all of us."

Comey said authorities are trying to determine how many individuals were victimized.

"With a few keystrokes, these men essentially picked the pockets of tens of thousands of Americans and, in the process, took their identities, stole their money and swiped their security," Comey said, urging consumers to pay closer attention to their financial statements and credit histories and learn how to protect themselves through the Federal Trade Commission's Web site.

Comey said there was no reason to suspect a terrorism connection, with simple greed the apparent motive. He said prosecutors were sending letters to the more than 30,000 victims, offering help.

He said the investigation was still in its early stages, though prosecutors had "found the guys who opened the fire hydrant of fraud."

Cummings, 33, of Cartersville, Ga., was released on $500,000 bond after an appearance in Manhattan federal court Monday at which he did not speak. His lawyer declined to comment on the charges. If convicted, Cummings could get up to 30 years in prison for wire fraud and millions in fines.

In addition to Cummings, the FBI also charged Linus Baptiste and Hakeem Mohammed in the fraud.

Baptiste allegedly downloaded hundreds of credit reports with Cummings' access passwords. Baptiste's lawyer declined to comment on the case. Mohammed has pleaded guilty to mail fraud for making changes to individual credit accounts.

In a company statement, Teledata officials said they had cooperated with the probe over the past eight months and were "pleased to learn that it has apparently come to a successful conclusion."

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