Weekend I.D. Theft Blotter

The following identity theft stories appeared this week around the country:

• Harvard, Illinois bank to conduct document shredding event (see Harvard plans ID theft events),
• Is risk of I.D. theft higher if you have a common name? (see A Common Name Could Make ID Theft Easier, or watch Video - CBS4 TV, Denver; click "Play"),
• 33 states, D.C., allow consumers to place "security freeze" on credit files; more states consider similar laws (see States, Uncle Sam Combating Identity Theft),
• Links to individual laws and instructions on how consumers can file a credit freeze (see List of state laws related to data privacy),
• Texas AG sues consumer money lender for exposing customers to I.D. theft by dumping personal business records containing addresses, dates of birth, Social Security numbers, etc., in trash bins behind stores (see Attorney General sues EZCORP over identity theft),
• Document shredding event in Montgomery (see Shredding campaign targets identity theft),
• Authorities identify illegal scanning devices installed at ATMs as key in stealing personal info in recent arrest (see Men indicted in Pa. ATM identity-theft scheme),
• Federal government exposing tens of thousands to I.D. theft risk (see Recent Cases of Missing Data, and see also Identity theft continues to haunt the American people),
• Wheeling, WV AARP group sponsors document shredding event (see Group Shreds Paper To Curb Identity Theft),
• Alleged beach thief accused of stealing identities of beachgoers who left wallets inside their cars while taking a swim (see $500,000 identity theft),
• Yonkers, NY woman used 6 month temp job at Kraft Foods to "serve up" info on 100's of co-workers to I.D. theft gang (see Macaroni & Sleaze In 'Identity Theft'),
• Victims must often solve their own crimes (see ID theft takes a toll on residents, police force - In Gwinnett, victim often must solve crime)

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Canada Cities Fight Identity Theft With "Community Shredding Day"

Local police and the Better Business Bureau in Vancouver, British Columbia marked the end of Fraud Prevention Month with "Community Shredding Day" as a way to encourage the shredding of personal documents to combat identity theft, as reported on the website of CKNW-AM Radio 980. For more, see Beat identity theft by shredding.

The Guardian (Charlottetown, Prince Edward Island, Canada) reports:

• "To mark the end of Fraud Prevention Month, Capital One and Shred-it have teamed up to sponsor the National Canadian Community Shred. This was the second year the two companies have joined forces."
• "The event was held Saturday in more than 20 cities across Canada. Citizens could bring all of their unwanted personal documents to the event to be shredded."
• "In Charlottetown, there was a Shred-it truck parked in the Wal-Mart parking lot."

For more, see Identify theft a growing problem.

(revised 4-1-07; 11:22 am)

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Kentucky Fights I.D. Theft With "Free Shred Day"

In an effort to combat identity theft, a "Free Shred Day" is being held in Frankfort, Kentucky today and again on April 27, allowing citizens to bring sensitive documents for shredding, reports The State Journal. For more, see The shredders are coming to fight identity theft.

For a related shredding article, see Internet age means erasing paper trails (Shredding event a good reminder that amidst identity theft and on line scams, wise people cover their tracks).

Go here for more on Community Shredding Days to fight identity theft.
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Weekend I.D. Theft Blotter

I stumbled into these identity theft related stories that caught my eye:

• Used computer donated by Illinois city contains names and social security numbers of about 130 city employees (see Identity Theft Scare or watch WCIA-TV Channel 3 Video report),
• Woman discovers she's an I.D theft victim when hospital bills her $17,000 for surgery she never had (see Hospital bill alerts woman to identity theft),
• Computer hackers set up shop next door to Internet cafes; set up "evil twin" websites to lure victims (see NBC2 Investigates: New forms of identity theft or watch NBC2-TV Video Report),
• Anne Arundel (Maryland) Police Community Relations Council is holding a countywide document shredding event on May 12, 2007 (see Shred-a-rama to protect against identity theft - County will set up free shredding machines),
• Children, ages 3 weeks and 7 years, victims of I.D. theft; victims under 18 increasing every year (see ID Theft: A Growing Problem For Children or watch Video - Child ID theft),
• NYC airline employees charged with using stolen passengers' credit card information to run up charges (see JetBlue Workers Charged In Identity Theft Scam or watch Video - JetBlue ID Theft Scam),
• I.D info stolen by office temp while working at insurance company used to borrow $12K to buy motorcycle (see Charges filed against man accused of identity theft),
• School administrator accused of stealing co-worker's identity; caught writing herself check for $3,500 in co-worker's name, resigns her position (see School administrator will likely avoid jail in identity theft case),
• 2007 list with personal info of about 450 graduates of local Texas college accidentally put in server easily accessible on public computers on campus, (see ID theft a concern for Montgomery College students - Identity theft a worry after data is put on an open server on campus)

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Washington State To Have Its First Statewide "Shred-A-Thon"

The Washington State Office of the Attorney General, in conjunction with Washington’s Law Enforcement Group Against Identity Theft, better known as LEGIT, have announced Washington’s first statewide shred-a-thon to take place on Saturday, April 28. Events at 29 locations statewide will help raise awareness of identity theft prevention and assist the public in keeping sensitive documents out of the hands of crooks. Reportedly, nine professional shredding companies are offering free shredding at those locations. For more, see:

• LEGIT Statewide Shred-a-thon,
• You can help foil ID theft Saturday (reported by The Daily Herald),
• Go here for Shred-A-Thon locations.

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Weekend I.D. Theft Blotter

The following identity theft stories this week caught my eye:

• Deceased car accident victim has identity stolen within a week after death (see Even death no defense against ID theft - Survivors should contact creditors immediately),
• Jury duty I.D. theft scam (see Identity theft scam linked to jury duty),
• U.S. Senate warns against I.D. theft by income tax preparers (see Grassley Urges Tougher Sanctions Against Tax Prep 'Sharks'),
• Alabama I.D. theft victim now has hassles with tax collector (see Montgomery Woman Fights IRS Over Alleged Identity Theft),
• The emergence of the identity theft protection industry (see Is ID theft protection worth it? - Make sure services have really got you covered),
• Texas Attorney General sues CVS Pharmacy for exposing customers to I.D. theft; employees at one store threw out hundreds of customer records into a store dumpster, records that included customers' names, addresses, Social Security numbers, credit card numbers, prescriptions and doctors (see CVS Pharmacy cited for exposing hundreds of customer records),
• Hospital billing service employee and another use stolen I.D information of more than 400 patients at midwest hospitals in tax refund scam (see Man sentenced in identity theft and tax fraud),
• Alleged I.D theft ring accused of hiring waiters and waitresses to steal credit card info from restaurant customers by use of small skimming devices; ring accused of making millions of dollars of credit card charges, over 1000 victims identified (see Authorities indicted 13 in alleged identity theft ring),
• Over two dozen supermarket customers tell cops that they are victims of I.D. theft ring that tampered with a personal identification number, or PIN, keypad at check-out line (Supermarket identity theft case expands to Alameda store),
• Credit freeze laws have been passed and go into effect in 12 more states and D.C. in 2007 (see Innovative Credit Freeze Laws Tackle Identity Theft: Credit Reports Access is Reinvented),
• Local Sartell, Minnesota community group sponsors "Senior Shred Day" to promote battle against I.D. theft (see To do: Event help seniors avoid identity theft),
• Two Yakima, Washington area retailers promote "Shred Day" to highlight battle against I.D. theft (see Shredding is Key to Preventing Identity Theft),
• City of Cape Coral, Florida and Riverside Bank consider promoting regular “Shred Day” events to battle I.D. theft (see Protect yourself against identity theft),
• Washington's Law Enforcement Group Against Identity Theft is organizing 29 "Shred Day" events throughout the state to battle I.D. theft (see Free shredding offered to help prevent identity theft)

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Notorious S. Florida Foreclosure Mill Gives Hundreds Of Employees The Boot As Storm Clouds Continue To Darken Over Alleged Robosigning Racket

In Plantation, Florida, The Miami Herald reports:

• The Law Offices of David J. Stern laid off hundreds of employees on Thursday, the latest sign that a state investigation, the loss of major clients amid scandal and the incriminating testimonies of former employees are bringing the foreclosure-processing giant to its knees.

• Jeffrey Tew, a lawyer for the firm, confirmed the layoffs Thursday. [...] Tew would not say how many employees were let go on Thursday, but said the firm has shrunk to about 400 employees, a decrease of about 50 percent in the past 10 days. Earlier this year, the firm had more than 1,100 employees. An e-mail memo sent out Thursday morning advised the employees of the layoffs.

• On Thursday afternoon, an employee for a document management and shredding company was unloading hundreds of empty boxes from a truck and carting them into the office complex at 900 S. Pine Island Dr. in Plantation, where Stern's firm occupies four floors.

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• On Monday, the stock price for DJSP [Enterprises, the public spinoff firm handling foreclosure document processing launched last year by Stern] closed below $1 for the first time. It had been trading at $13.65 in April. It closed at 77 cents on Thursday.(1)

For more, see Foreclosure law firm cuts staff (Hundreds of employees were laid off at the Law Offices of David J. Stern on Thursday, as the embattled company struggles amid the foreclosure document scandal).

See also, South Florida Sun Sentinel: Mass layoffs at Stern as foreclosure law firm loses top clients (Plantation attorney eliminates 560 jobs —70 percent of staff — citing 'recent turbulence in the mortgage industry').

(1) According to this story, a Chinese-American investment banking firm named Chardan Capital acquired a controlling interest in what is now a DJSP subsidiary on Jan. 15 for $64.8 million in cash and the assumption by the subsidiary of about $3.4 million in DJSP expenses.

Weekend I.D. Theft Blotter

The following recent reports involve alleged identity theft stories involving:

• a pizza delivery driver (Pizza delivery man accused of identity theft),
• a manager of an antiques business, for running up over $1,000 in charges on an account belonging to his ex-girlfriend (Police make arrest in identity theft case),
• a hospital employee who, according to police, used a hospital computer to steal social security and credit card numbers from 20 hospital patients (Guilty Plea in Identity Theft Case),
• a former Social Security Administration employee charged with illegally disclosing personal information she took off a government computer that was then used to rack up $2.5 million in credit card charges (Social Security Administration Worker Charged In Identity Theft Scheme),
• Nurse charged with stealing patient info and identity theft.

In addition, Credit Cards GB reports that a study by Visa reveals, "[t]he most common place where 40% of identity theft is found is in restaurants." The problems are caused by fraudsters who hack into the restaurant computers, which contain all of the customer details and transactions. To read more, see "Where do you think identity theft is most commonly started?"

Also, KOAA-TV in Colorado reports that Pueblo, Colorado police say that "[e]very year people learn they've fallen victim to identity theft after they file their taxes and find out they owe money for work they've never done." One identity theft victim may have had his identity stolen while he was in prison, since he recently learned he owed nearly $20,000 in back taxes for income the IRS says was earned during a period of time in which he says he spent in a state penitentiary. For more, see Pueblo man falls victim to identity theft.

Also, a Community Shred Day was held in Flint, Michigan yesterday. Dan Milliken, owner of iSHRED, an on-site document destruction company, supplied an industrial-sized document shredder, a monster machine inside a 35-foot semitrailer to promote document shredding as a way to combat identity theft. (Monster machine helps tear identity theft fears to shreds).

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End Drawing Near For S. Fla. Foreclosure Mill? Stiffs Landlord On Office Rent; Affiliate Enters Into Loan Forbearance Over $12M Credit Line Default

In Plantation, Florida, The Miami Herald reports:

• The Law Offices of David J. Stern, which has helped banks seize thousands of homes from homeowners who missed mortgage payments, is now having trouble paying its own bills. One of its subsidiaries is seeking bank forbearance for defaulting loans, and the shrinking company has fallen behind on rent payments at its Plantation offices, according to a regulatory filing Monday.

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• The law firm has already stopped paying some of its bills. The company also has not paid its rent for the month of November at its office space at 900 S. Pine Island Road, in Plantation. [...] Much like the troubled real estate market, Stern's firm has been enduring a post-boom decline of its own recently. After the growing five-fold in the last five years to more than 1,100 employees, a lightning round of negative news has leveled the foreclosure-processing giant in the last few months.

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• The same day layoffs were announced, employees from a document shredding company spent hours taking boxes from the firm to a truck parked outside. The DJSP stock price fell 32 percent on Monday to close at $0.48. It has plunged more than 95 percent since April, when it peaked at $13.65. In a letter announcing the layoffs to Florida Agency for Workforce Innovation, a Stern representative wrote that a complete closing of the firm "remains a possibility.''

For more, see Foreclosure attorney Stern struggling to pay his bills.

"Produce The Note" Success Story Featured In Media Report Describing Foreclosure Scandal As "Clash Over Who Gets Stuck With $1.1 Trillion In Loss"

In Boca Raton, Florida, BusinessWeek reports:

• In 2002, a Boca Raton (Fla.) accountant named Joseph Lents was accused of securities law violations by the Securities and Exchange Commission. Lents, who was chief executive officer of a now-defunct voice-recognition software company, had sold shares in the publicly traded company without filing the proper forms. Facing a little over $100,000 in fines and fees, and with his assets frozen by the SEC, Lents stopped making payments on his $1.5 million mortgage.

• The loan servicer, Washington Mutual, tried to foreclose on his home in 2003 but was never able to produce Lents' promissory note, so the state circuit court for Palm Beach County dismissed the case. Next, the buyer of the loan, DLJ Mortgage Capital, stepped in with another foreclosure proceeding. DLJ claimed to have lost the promissory note in interoffice mail. Lents was dubious: "When you say you lose a $1.5 million negotiable instrument—that doesn't happen." DLJ claimed that its word was as good as paper. But at least in Palm Beach County, paper still rules. If his mortgage holder couldn't prove it held his mortgage, it couldn't foreclose.

• Eight years after defaulting, Lents still hasn't made a payment or been forced out of his house. DLJ, whose parent, Credit Suisse, declined to comment for this story, still hasn't proved its ownership to the satisfaction of the court. Lents' debt has grown to about $2.5 million, including unpaid taxes, interest, and penalties. As the stalemate grinds on, Lents has the comfort of knowing he's no longer alone. When he began demanding to see the I.O.U., he says, "I was looked upon like I had leprosy. Now, I have probably 20 to 30 people a month come to me" asking for advice. Lents is irked when people accuse him of exploiting a loophole. "It's not a loophole," he says. "It's the law."(1)

• The Lents Defense, as it might be called, doesn't work everywhere.(2) Thousands of Floridians have lost their homes in lightning-fast "rocket dockets." In 27 other states, judges don't even review foreclosures, making it harder for homeowners to fight back. Now, though, allegations of carelessness and outright fraud in foreclosures has become so widespread that attorneys general in all 50 states are investigating. So are the feds.

For more, see Mortgage Mess: Shredding the Dream (The foreclosure crisis isn't just about lost documents. It's about trust—and a clash over who gets stuck with $1.1 trillion in losses).

(1) Lents' story has also been reported in a February, 2008 Bloomberg News article. See Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish.

(2) Not only that, but a "produce the note" victory by another Boca Raton, Florida homeowner in State St. Bank & Trust Co. v. Lord, 851 So. 2d 790 (Fla. App. Ct. 4th Dist., 2003) (litigation in which the losing lender was represented by the foreclosure mill, Law Office of David J. Stern) led to a change in the applicable statute (section 673.3091, Florida Statutes - Enforcement of lost, destroyed, or stolen instrument) (no doubt lobbied for by the financial industry) to make it easier to foreclose in Florida without having physical possession of the promissory note.

The 1999 version of Sec. 673.3091(1)(a), Florida Statutes (the statute at the time State St. Bank was originally filed in a Palm Beach County Circuit Court) read as follows:

• (1) A person not in possession of an instrument is entitled to enforce the instrument if:
  
  (a) The person was in possession of the instrument and entitled to enforce it when loss of possession occurred.

The 2004 version of Sec. 673.3091(1)(a), Florida Statutes (after the change in the statute), read (and now read - see current section 673.3091, Florida Statutes) as follows:

• (1) A person not in possession of an instrument is entitled to enforce the instrument if:
  
  (a) The person seeking to enforce the instrument was entitled to enforce the instrument when loss of possession occurred, or has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred.

By the way, the Florida Bankers Association appears to tacitly acknowledge their role in lobbying for the statutory change arising out of the State St. Bank case (at pages 4 thru 6 of their comments to the Florida Supreme Court made in connection with Emergency Rule and Form Proposals of the Supreme Court Task Force on Residential Mortgage Foreclosure Cases), when it "confesses" that it is common for lenders to deliberately destroy the promissory notes not long after the real estate closing, after converting them into electronic form. See also Naked Capitalism: FUBAR Mortgage Behavior: Florida Banks Destroyed Notes; Others Never Transferred Them.

More On Maryland Forecloure Rescue Operator Facing Class Action Suit

(original post 8-26-07; updated 8-29-07)
The Washington Post reports on the following in connection with the investigation on and class action lawsuit against lead defendant, foreclosure rescue operator Metropolitan Money Store:

1) The $800,000 fairy tale wedding between two of the primary defendants, former exotic dancer Joy Jackson and popular ex-disc jockey in Prince George's clubs, Kurt Fordham in June 2006,

2) Among those who performed at the wedding were singer Patti LaBelle -- who gave a seven-song concert with "Lady Marmalade" as her finale -- gospel harpist Jeff Majors and R&B crooner Raheem DeVaughn performed, as did a Howard University choir.

3) How Jackson, Fordham & others used straw buyers in their alleged scheme to purportedly help homeowners in foreclosure save their homes,

4) How Jackson & Fordham, & others allegedly siphoned off all the equity in the homes of the unwitting owners, who were often unable to repurchase their property; some said they were unaware they were signing over their deeds.

5) How Metropolitan Money store began laying off employees by the end of the summer in 2006 and how it stopped airing ads,

6) How one employee realized something was wrong when he returned to his office one afternoon in October, 2006 and found employees having a "shredding party." All the documents on his desk, he said, were missing. The company shut down in December.

7) How Jackson and Fordham have moved out of their house, and efforts to locate them were not successful. They also did not respond to requests from The Washington Post for comment,

8) How the U.S. Secret Service, the FBI, and Maryland regulators are all investigating Metropolitan Money Store,

9) In May, Jackson and Fordham put their house up for sale; in early June, an "estate sale" sign went up: Beds, expensive lamps, jewelry, designer clothes, even a rack of fur coats were for sale, neighbors said.

10) In a development in this saga that seems both fitting and somewhat poetic, the house that Jackson and Fordham called home is reportedly now in foreclosure.

For more, see Prince George's Fairy Tale Unravels For Woman at Center of Fraud Probe.

Go here for other posts on Jackson, Fordham, & Metropolitan Money Store.

Go here for a significant Federal criminal prosecution of a Southern California foreclosure rescue operator who was charged with victimizing over 100 homeowners facing foreclosure, not unlike what Metropolitan Money Store allegedly did.

For criminal prosecutors, see Foreclosure Rescue - For Criminal Prosecutors Only.