DHS investigation uncovers cyber fraud ring members

Two Winona State University students are currently being investigated by the Department of Homeland Security and are suspected of having been members of a Vietnamese-based cyber crime ring that has been using stolen information to impersonate innumerable Americans and steal money from various online retailers.

The type of fraud practiced by these criminals is not new. They opened eBay accounts by using the stolen identities and offered popular software, video games, Apple iTunes gift cards, and other stuff at a heavily discounted price.

Buyers would pay for the merchandise and the money would land in the fraudster’s PayPal accounts, at which point the scammers would use the stolen identities to order the merchandise from various vendors and send them to the original buyers.

The buyers and the sellers/fraudsters are completely satisfied with that arrangement, but the people whose identities have been stolen and misused to order the (full pride) software and the retailers are left with dealing with the aftermath. And while the victims of identity theft can protest the charges and claim they didn’t place the orders, the retailers have no way of minimizing the losses.

According to the preliminary results of the DHS’ investigation – dubbed “Operation eMule” – the 22-year old Tram Vo and Khoi Van have been opening numerous eBay, PayPal and bank accounts using stolen identities, from which the received money was wired on to other accounts in Canada and Vietnam. All in all, it is believed that the two have wired some $1.25 million of the stolen funds to those overseas accounts.

In the search warrant affidavit filed regarding the case, DHS agent Daniel Schwarz says that Operation eMule was started all they way back in September of 2009 and that its aim was to investigate a number of these Vietnam-based fraudulent criminal rings.

“The underground economy involves an elaborate network of individuals playing various roles such as computer hackers, sellers of stolen personal identity, credit card and other financial information, fraud managers and facilitators, and mules/re-shippers,” he says. “The communication is conducted through a secured Internet website accessed by vetted members only. The illicit funds and high end electronic merchandise that are part of the Vietnam Underground Economy are estimated to exceed hundreds of millions of dollars. The illicit funds and stolen merchandise are then laundered and/or re-shipped through an extensive network of U.S. based ethnic Vietnamese ‘mules’ to Vietnam”.

Minnesota Star Tribune reports that Vo’s and Van’s residence has been searcher and the DHS confiscated various documents and computer equipment. The two students will probably be charged with wire fraud, identity theft and money laundering.

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