"What began as a local law enforcement investigation ultimately exposed an extensive nationwide black market for airline tickets," said Beth Phillips, U.S. Attorney for the Western District of Missouri.
"Six federal indictments allege that 38 defendants used stolen credit and debit card information from thousands of identity theft victims to purchase tickets, which they sold to their customers at a steep discount," Phillips explained. "These separate criminal conspiracies resulted in an estimated total loss of more than $20 million to numerous domestic airline companies, financial institutions, other merchants, and cardholders."
Conspirators used several strategies to obtain the credit and debit card information of identity theft victims, according to the federal indictments. In some cases, conspirators allegedly purchased stolen information from unindicted co-conspirators in Bangladesh, Vietnam, and elsewhere. Some of the defendants allegedly stole customer information at hotels, a bank, and a customer call center where defendants were employed.
This stolen identity information was allegedly used by other conspirators -- identified as black market travel agents -- to purchase airline tickets at no cost to themselves. They used computers and cell phones to make online purchases through the websites of various airlines, the indictments say, utilizing not only private Internet connections but also public Internet connections at airports, hotels, libraries, and other businesses.
They often purchased reservations close to the time of departure in order to increase the likelihood their fraudulent purchases would not be detected, the indictments say. As a result, a passenger could often complete his or her trip before the credit or debit card was detected as being compromised.
According to the indictments, black market travel agents profited from the scheme by purchasing stolen credit and debit card information at a nominal cost. They would then use the stolen information to purchase the airline tickets at no cost to themselves, and then sell the ticket to their customers. Many of their customers, who usually paid $75 to $250 per ticket, knew the tickets were not legitimately purchased. Some of the customers have been charged in the indictments.
Some conspirators acted as passenger brokers or referral sources to carry out the scheme by referring customers to the black market travel agents, according to law enforcement agencies.
According to the indictments, the investigation began when twp co-defendants stole a Dell laptop computer from a residence in Overland Park, Kan., on Nov. 21, 2005, in order to use it in the fraud scheme. In related incidents, local police officers recovered numerous pieces of mail and credit card numbers that did not belong to the defendants. One of those credit card numbers had allegedly been used to purchase several airline tickets.
The two co-defendants allegedly obtained stolen credit and debit card information from hotels in Overland Park and the Atlanta metro area, where the identity theft victims had stayed as guests.
Investigators tracked the black market activities of these defendants from Kansas City to Atlanta. As the investigation continued, law enforcement officers developed leads to similar conspiracies operating throughout the United States.
According to the indictments, tickets were purchased for flights into or out of Kansas City International Airport, Springfield-Branson National Airport, and other airports across the country, primarily on Delta Air Lines, US Airways, and United Airlines.
A series of six indictments have been returned under seal by a federal grand jury in Kansas City during the past year. Four of the six indictments were returned under seal on July 1, 2010. All of the indictments have been unsealed and made public upon the arrests and initial court appearances of the defendants.
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