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Thread: Corporate ID thieves mining the store

  1. #1
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    Default Corporate ID thieves mining the store

    http://www.denverpost.com/business/ci_16149416

    Net-based swindle surprisingly easyDozens of businesses in Colorado, and probably thousands more nationally,
    are victims of a new and frighteningly easy breed of identity theft in which corporate information is hijacked and millions of dollars in phony credit purchases are made.

    All it takes is an Internet connection and, in some cases, as little as a $10 fee to alter the name of a corporate officer or the address of a company's registered agent on public records.

    Once that is done, thieves acquire corporate credit that typically runs in multiples much higher than the average consumer can get.

    And most companies might never know it's happening until it's too late and credit ratings have been trashed.

    The nation's secretary of state offices — the agencies that usually register corporations and maintain public databases on them — have few protections to stop the Internet-based theft. In Colorado, for example, anyone can access the online databases and make changes since there is no password protection.

    "We're just now getting a handle on the problem," said Kay Stimson, spokeswoman for the National Association of Secretaries of State.

    Such inaction has business owners fuming and, in turn, scratching their heads.

    "What's screwy is information on my fantasy football team is better protected with a password than the information for my business," said Richard Chuapoco, whose company's identity was stolen in February by someone using a fictitious name and address.

    Thieves are also relying on Dunn & Bradstreet — the business equivalent of a consumer credit reporting bureau — as unwitting accomplices. The company provides credit ratings on businesses and corroborates any reported changes through secretary of state offices — where the fraud occurs in the first place.

    "It's a terrible circle that one business is relying on another business, which in turn is using bad information from another, and so on and so on," said Agent-in-charge Robert Brown of the Colorado Bureau of Investigation, believed to be the country's first to delve into the crime.

    "We're on them," he said, "and we're catching up."

    Police investigators have so far identified 48 Colorado businesses — many of them easily recognized — affected by the crime and expect to find dozens more.

    Handling the problem

    Most states are looking to Colorado for guidance on how to handle the problem.

    Colorado officials say putting password protection on corporate data — where only a business owner or representative can make changes — is prohibitively expensive. Instead, the state has opted to use e-mail notification any time information is changed to a business' records.

    The problem is that only 170,687 of more than 800,000 companies registered in Colorado have signed up for e-mail alerts. That's up only slightly from July, when the state flagged businesses about the potential problem.

    What's worse is that thieves are now taking on the identities of dormant companies whose information is still readily available online even though the firms are no longer doing business.

    Officials say they're trying to protect businesses, but the crime is so new and its methods change so quickly that today's fix merely exposes a new flaw tomorrow.

    "This is likely to keep morphing, almost faster than we can keep up," said Colorado Secretary of State Bernie Buescher. "We can do some things, but there are so many parts that just won't do any good."

    In Nevada, officials expect to roll out a $5 million password-protected solution in March, complete with three new employees to manage it.

    "We accept filings at their face value, but we need to ensure there are some protections in place," said Pam duPre, spokeswoman for the Nevada secretary of state.

    Chuapoco's company, a 10-year-old Denver firm that buries communications lines, was victimized shortly after his annual registration was renewed in January. He asked that his company name not be disclosed to prevent additional thefts.

    Chuapoco, 48, learned of the theft when he contacted Dunn & Bradstreet to ensure an address change was recorded properly.

    "I wouldn't have caught it for another year, when the next registration was due," he said.

    His business was looking to acquire some new equipment, and the credit-rating information needed to be up to date.

    New agent and address

    That's when he learned of a new registered agent and address — an Aurora mail drop that was set up to forward everything to California.

    "I asked Dunn & Bradstreet how they checked the information, and they said the secretary of state," said Chuapoco, who, with his wife, founded the company out of their home.

    "In just a few seconds, 10 years of hard work was going down the drain," he said. "I was terrified."

    The thieves also had changed key information about Chuapoco's company on Dunn & Bradstreet's database, such as increasing the number of his employees from 15 to 150 and his company's annual revenues by a factor of 10.

    Why?

    "You get more credit that way, and my company credit profile is sterling," Chuapoco said.

    Though the damage to his credit history was limited because he caught it early, he said he is more concerned that his business records could be changed so easily.

    "I'm a businessman and think, 'This is the secretary of state. They've got my back,' " he said.

    Merchants slammed by the thefts — Home Depot and Lowe's are among the most victimized — have sold millions of dollars in merchandise to the thieves on credit, according to investigators.

    Most of the thieves aren't local. Identities of a Colorado company might be swiped here, but they are used elsewhere because business is global.

    In one case, according to interviews, a Home Depot in Palm Springs, Calif., was out $60,000 worth of copper wire purchased in the name of a Boulder technology company.

    Catching the perpetrators is proving difficult. When investigators in July raided a California address connected to Colorado companies, they arrested one individual who said he was hired to troll the Internet in search of vulnerable companies.

    Around his desk were files teeming with information about Colorado companies.

    On his computer screen, as police arrived, was the Colorado secretary of state's website.

    David Migoya: 303-954-1506 or dmigoya@denverpost.com

    Protect yourself

    Corporate identity theft is emerging as the latest criminal enterprise. Here are some tips to combat the problem:

    • Check your corporate filings regularly to ensure they're up to date and accurate.

    • Sign up for e-mail alerts. If a change is made — even to your e-mail alert — you'll be flagged.

    • Watch for signs that there could be a problem, such as unsolicited credit cards in the mail or calls from collectors.

    • Check listings that you have on government databases — such as a bidder list — to be sure nothing has been changed.

    • If you find a problem, call local law enforcement and the Colorado Bureau of Investigation's major-crimes unit at 303-239-4211.


    Read more: Corporate ID thieves mining the store - The Denver Post http://www.denverpost.com/business/c...#ixzz10NjVng8N

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  2. #2
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    Default

    Its kind of horribly fascinating to watch how fast new forms of crime have evolved. Even worse, the Internet can allow some crook to rip you off from some building in Kazahkstan or the Solomon Islands - so good luck even prosecuting anyone under state anti fraud laws.
    “What fresh hell is this?”

    "A man who picks a cat up by the tail learns something which he can learn in no other way." - Mark Twain

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    Nerds.

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