2 Arrested in 'Massive Scheme'

Investigators Recover Skimmers, Fake Cards, 1,000 Pages of ID's
2 Arrested in 'Massive Scheme'
The Wakulla County, Fla. Sheriff's Office has arrested two men for involvement in what's described as "a massive scheme" to defraud thousands of victims across the United States via identity theft.

Nigel Raymond Humphrey, 19, and Paul Adams, 46, are in custody and face multiple charges.

Humphrey has been charged with 28 counts of fraudulent use of a credit card, criminal use of personal identification, passing counterfeit credit cards and fraud. He is being held on $400,000 bond.

Adams, currently in the custody of the U.S. Secret Service, faces 11 counts of possession of counterfeit credit cards, 11 counts of criminal use of personal information, one count of criminally forged identification and one count of organized scheme to defraud.

Their alleged scheme involved creating counterfeit credit cards with stolen personal information. The suspects are said to have used the stolen information to purchase gift cards and ship the cards (as well as merchandise purchased with the cards) around the world. Police are investigating whether the suspects are part of any larger scheme, as well as whether they are using their true identities and in the U.S. legally.

"We're still working with the Secret Service and other state and local agencies," says Detective Drew Vass. "There's still a lot of work yet to be done."

Suspects 'Picked the Wrong Community'

Detectives Vass and Sean Wheeler were tipped off to the scheme when they got a call from a local Wal-Mart store manager in early July. The store manager had been contacted by an Arkansas woman who told him that her credit card had been used fraudulently at his store.

On July 6, investigators arrested Humphrey, who had been identified on a Wal-Mart security video buying 28 $100 gift cards with six different counterfeit "cloned" credit cards. Vass and Wheeler brought him in for questioning. "By the time we went back to the house, [Adams] had packed his truck and fled, taking everything with him from the house," Vass says.

Adams was apprehended in Ohio by state and federal law enforcement on July 22. In Adam's vehicle, officers found more than 1,000 pages of notes listing identities of victims, along with card counterfeiting equipment and skimmers. Vass says that the total number of identities hasn't been fully determined, but they number at least 25,000. The list of victims and possible co-conspirators taken from the vehicle and the residence were traced to Texas, Oklahoma, Nebraska, New York, Ohio, Georgia, Ukraine and China.

The Secret Service was also involved in Adam's arrest, and investigators also discovered more than 15 cellular telephones, as well as a skimming device used to get personal information from credit cards and computers.

During the search of the suspects' residence, blank credit cards were discovered in the home and yard, as were applications for credit cards, computer printers and other equipment used to create bogus credit cards.

Charges are still being compiled on the two suspects, including federal charges of identity theft. "Once the forensics come back on the equipment, both the state and federal prosecutors will determine the extent of the case, other suspects, and more possible charges," Vass says.

Vass says the relationships among law enforcement, retail merchants and financial institutions make all the difference in catching such crimes. "We may not be able to stop them from happening, but we certainly are right on top of it when it does occur, because of the alert response from retailers and institutions."

The two suspects picked the wrong community to set up shop, the detective says. "They thought they were in a place they could do some serious business in," Vass says. "From indications we found at the house, it looked as if they considered this area to be a sleepy backwater area. They thought wrong."

About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.

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