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Identity Fraud Kingpin Caught Because He Flunked Geography

Posted By George (Clint) Frederick CPA PLLC, George Frederick CPA PLLC, Friday, March 11, 2016

Hieu Minh Ngo (Pronounced No), a 26-year-old identity theft kingpin made a million or more a year by selling identity information to other identity thieves, who in turn used the information to comprise individuals’ identities.  Ngo started when he was 16. He hacked retail sites and made as much as $10,000 a day. Hacking credit card information was too much work, so he looked for another swindle.  He created a web portal and combined with social engineering was able to create a massive database by hacking into vulnerable companies that contained data of consumer information.  The information was sold to criminals.  He resold his information to criminals for $1. 

Ngo was caught when another hacker agreed to help him restart his business after his web portal identity had been compromised. Unknown to Ngo the other hacker was working with the Secret Service so his sentence would be reduced.  Ngo turned down meeting in New Zealand since he was wanted there and was afraid he would be handed over to the US since he was also wanted there.  He agreed to meet the undercover agent in Guam.  Only after landing in Guam for the meeting did he realize Guam was a US Territory.  He was promptly arrested and is now serving a prison term.

Ngo’s identity files were sold to at least 1,300 criminals and contained a database of at least 200 million Americans.  The potential revenue: 1,300 times the 200 million files, and when you consider the US Population is about 323 million, chances are your identity is compromised.

As a Certified Fraud Examiner I am constantly aware of the enormous amount of identity thefts that exist today.  As Frank Abernathy, of ‘Catch Me If You Can Fame’ stated, “…if your identity has not been compromised it’s just a matter of time before it is!”

Now, for me it becomes personal.  I filed my daughter’s 1040 tax return this last weekend.  I use a sophisticated tax program favored by CPA’s (according the AICPA Journal of Accountancy). I filed her return using the E – filing system of the program. Her return is a joint return with her husband.  Within 30 minutes of filing the return I was notified the IRS had rejected the return.  The problem “Spouse SSN in the Return Header must not be equal to the Primary SSN on another tax return”.  In other words, the IRS thinks she has already filed her tax return and received a refund.  Note: the average refund for an electronically filed 1040 tax return is averaging $3,100 so far for the 2015 tax returns. 

Stay tuned for further developments – currently the problem rests with the IRS to determine what happened. We are anxiously awaiting an IRS response.

Information obtained from the ACFE Fraud Newsletter of March 7, 2014

 

 

 

Tags:  Identity Fraud  security  small business  taxes 

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