Fed Friday: Ben Bernanke targeted by an ID theft ring

It is with no small amount of schadenfreude that I report that our esteemed and despised Central Banker, Ben Bernanke has apparently become entangled in an elaborate identity-theft scheme after his wife’s purse was stolen containing a checkbook from their joint account. The story was broken by Newsweek on Wednesday and they’re claiming that the Bernankes were not specifically targeted. (It’s only a coincidence. It’s only a coincidence. It’s only a coincidence!) But I’m not so sure.

Last August Anna Bernanke’s purse was stolen off the back her chair at a Starbucks near the couple’s Capital Hill home. The purse contained her Social Security card (which you’re not supposed to carry with you), credit cards, diver’s license and a checkbook from the couple’s joint Wachovia checking account (I’m guessing Wachovia gets a bailout whenever they want). Printed on the checks was the Bernankes’ account number, home address and phone number. The thief began issuing checks from the family’s bank account within 6 days.

This wasn’t just a case of an opportunistic purse snatcher. This was part of a sophisticated nation-wide crime syndicate that was operating in Washington D.C. and major cities in Maryland, Virginia, Illinois and others. Federal agents in several states had been investigating them for months. According to court documents, the identity fraud ring stole over $2.1 million from at least 10 different financial institutions around the country.

The group called itself “Cannon to the Wiz” (“Cannon” being street slang for pickpocket.) and the ringleader Clyde Gray (a.k.a. “Big Head”) employed an army of pickpockets, mail thieves, and office workers to swipe checks, credit cards, bank records, military IDs and various other personal information. One member of the ring had infiltrated an office of the Combined Federal Campaign, the official U.S. government-sponsored charity, and supplied the crime ring with stacks of checks mailed in by federal workers. Another worked in a Washington D.C. doctor’s office, with access to patients’ records and their bank-account information.

Is it just me or does this not sound just a little bit like Project Mayhem from the movie Fight Club? It reminds me of that quote from Tyler Durden to the investigator:

“We cook your meals, we haul your trash, we connect your calls, we drive your ambulances. We guard you while you sleep. Do not fuck with us.”

The thieves brought the stolen records to cars equipped with laptop computers, scanners and printers which they used to quickly produce counterfeit driver’s licenses and IDs with photos of their members, then they would walk into bank branches, impersonating the victims who’s records were stolen. But here’s the interesting thing. George Lee Reid, the guy caught issuing checks from the Bernankes’ account, was not withdrawing Ben’s cash. He walking into a Bank of America branch, impersonating a pervious identity theft victim, deposited $900 from the Bernanke account and withdrew $9,000 from that account. Do see the genius of it? They are using the accounts of some victims to launder the money stolen from others. It’s almost like a ponzi scheme. If they kept refilling the accounts of old victims with the money stolen from new victims it could be months before the old victims notice the money missing. But just like a ponzi scheme it requires larger and larger financial resources to keep it going. So, why not go after the guy with the bottomless checking account?

Here’s why I think Bernanke was targeted. Although most of the victims’ names were concealed, all the victims who were named were in some way connected to government, and Washington D.C. was not the only place. Donna Pedergast, an assistant Michigan attorney general, had her wallet snatched right out of her purse without her knowing it while she was at a basketball game in Detroit. She said, “They took it right out of my purse while it was on my shoulder. I didn’t feel a thing.” So they target a charity that gets a lot of donations from federal workers, a doctor that gets a lot of government patients, a basketball game attended by an assistant attorney general, and a Starbucks patronized by the wife the Federal Reserve Chairman. I see a pattern. And if they’re infiltrating these places as employees, I don’t think it’s beyond their capacity to case a specific target, especially one as lucrative as Ben Bernanke.

Gray pleaded guilty to conspiracy to commit bank fraud, and Reid confessed as a co-conspirator, but any good cybercriminal knows that the way to keep an operation up and running is to keep leadership distributed. Project Mayham would go forward without Tyler Durden, and I’m sure Cannon to the Wiz will go on without Clyde Gray.

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