Arrests target home-equity scam

Federal authorities this week announced a series of arrests and convictions in connection with a global identity theft ring that stole millions of dollars by hijacking home-equity lines of credit issued to thousands of consumers.

On Monday, state and federal law enforcement officials arrested four men who were part of a group that allegedly combined high-tech equipment with old-fashioned con artistry to drain home-equity lines.

According to charging documents unsealed this week in New Jersey’s U.S. District Court, the men and four others arrested earlier this year tricked multiple banks and credit unions into wiring more than $2.5 million from home-equity lines to accounts controlled by members of a fraud ring in Canada, China, Japan, Vietnam and South Korea, among other countries.

On Nov. 20, three people who authorities say were connected to the New Jersey gang pleaded guilty in the U.S. District Court for the Eastern District of Virginia to conspiracy to commit bank fraud and related charges. Officials say they stole at least $10 million through home-equity scams.

The cases highlight what the FBI calls an “emerging scheme” afflicting the struggling real estate and mortgage market. In such crimes, thieves target people with good credit and large, untapped home-equity lines of credit, digging through public records -- such as property deeds and mortgages -- as well as publicly available Internet databases to obtain credit applications, credit reports and victim signatures.

“Home-equity lines of credit are an expanding front in the battle against mortgage fraud,” said New Jersey U.S. Atty. Christopher Christie. “Homeowners should carefully review their statements to make sure their hard-earned equity is not disappearing from under their noses.”

According to the criminal complaint, the defendants and alleged co-conspirators used fee-based Web databases to find documents that included names, birth dates and Social Security numbers of people with large balances in home-equity credit accounts.

The government alleges that the group also used other online databases to locate answers to common security questions, such as the victim’s mother’s maiden name, and used the combined information to order credit reports in the victim’s name to verify account balances.

Authorities say the defendants then would phone the victim’s bank or credit union and ask it to wire a substantial portion of the line of credit to banks in Asia and Canada.

In the Virginia cases, the defendants acknowledged using caller-ID spoofing services, prepaid cellphones and PC wireless cards to hide their location and identity online.

The government alleges that the defendants transferred victims’ home telephone numbers to alternate lines they controlled to stay one step ahead when banks called to verify transfer requests.

Law enforcement officials say the New Jersey group operated in much the same way. Hakeem Olokodana, 41, one suspected ring member awaiting trial in New Jersey, is accused of asking a victim’s bank to wire $675,000 to an account in Tokyo. Olokodana allegedly called Verizon posing as the victim, complaining of problems with his home phone line. He then persuaded Verizon to forward all incoming calls to a separate number that he controlled, according to officials.

Verizon spokesman Eric Rabe said the company’s customer support technicians employ a number of methods for verifying such requests, asking about information on the customer’s last phone bill, or the amount of the last payment.

“We are a frequent target of these kinds of attacks,” Rabe said. “And while we may not be 100% successful at stopping them, we certainly have lots of measures in place to prevent this sort of thing.”

Arrested Monday were Derrick Polk, 45, of Los Angeles; Oludola Akinmola, 37, and Oladeji Craig, 39, of Brooklyn, N.Y.; and Oluwajide Ogunbiyi, 32, of Springfield, Ill. All four face charges of wire fraud.

Between August and October, charges were brought against Olokodana and Yomi Jagunna, 44, both of Queens, N.Y.; Abayomi Lawal, 45, of Brooklyn; and Daniel Yummi, 40, of New York. They also face wire fraud charges.

Yummi’s court-appointed attorney, Marc Leibman, said: “Mr. Yummi is presumed innocent until he pleads guilty. . . . But we will strive for the most just result.”

Last week, Precious Matthews, 27, of Miami, and Ezenwa Onyedebelu, 20, and Brandy Anderson, 30, both of Dallas, pleaded guilty to conspiring to possess personal identification information with intent to commit wire fraud, conspiring to commit wire fraud and conspiring to gain unauthorized access to computers.

An attorney for Olokodana said he had just been retained and could not speak about his client or the case. Calls to attorneys for the others charged were not returned.