The Federal Trade Commission was granted an injunction by US District Court Judge Ronald Guzman that the agency filed against 16 “sham” companies that allegedly used a identity theft scheme to make unauthorized charges from debit and credit card accounts.
The FTC said that the defendant companies, dummy corporations based in the US, wired more than $10 million in unauthorized funds from the debit and credit cards to bank accounts in Lithuania, Estonia, Latvia, Bulgaria, Cyprus, and Kyrgyzstan.
According to the FTC, these dummy corporations were formed by “money mules” – 16 people in the US recruited via spam e-mail to establish the corporations and open bank accounts for money transfers. These same mules also used debit cards, linked to the accounts, to create the aura of legitimacy via corporate telephone numbers, addresses and websites used to trick card processors.
The injunction will apparently put a halt to the scheme pending trial, as the court has frozen defendants’ assets and halted operations until the case is resolved.
The FTC says it’s not entirely sure how the identities were stolen, and noted that due to the relatively low amounts being withdrawn – ranging from 20 cents to $10 – most victims were unaware the money had been taken. Even in cases where the theft was reported, victims who contacted the toll-free numbers appearing on their bills and statements found either the number was disconnected or led to a pre-recorded message.