Synthetic Identity Theft ExamplesWhat Do Synthetic Attacks Actually Look Like in Practice?
High-Profile Examples to Help You Understand Synthetic Identity Theft
“Synthetic identity fraud.” It almost sounds like something out of a science fiction thiller… or at least a creation of artificial intelligence. In reality, it’s neither. It’s worse.
A real and growing threat, synthetic identity fraud impacts merchants, consumers, and financial institutions, all in different ways. For criminals, it’s a cash cow: like we mentioned in the last chapter, consumers and companies currently lose between $20 billion and $40 billion to synthetic identity fraud per year.
When it comes to consumers, some demographics get hit harder than others. KPMG and Carnegie Mellon University estimate that children’s social security numbers are 51 times more likely to be stolen by synthetic identity thieves. The elderly and homeless, populations who are less likely to monitor their credit profiles, are likewise more exposed to higher identity theft risks.
Meanwhile, financial institutions and merchants are driven to invest more in fraud prevention tools and personnel than they would otherwise have to. If your business or bank is unable to safeguard customer data may also suffer from reputational harm and lose their trustworthiness.
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It’s a huge negative impact. So who’s causing it? Here are a few examples of high-profile cases:
New York Bank Scam Ring Steals Nearly $1 Million
Let’s start with the case of 43 year-old Adam Arena. He and a dozen alleged co-conspirators were indicted for using synthetic identity fraud to try and scam New York banks out of nearly $1 million.
The group fabricated new identities by mixing fake names with real Social Security numbers. Hiding behind the credit ratings of these non-existent personas, they borrowed larger and larger amounts of money from banks. Repaying the loans was, of course, never part of the plan.
It took investigators over 2 years to close Arena’s case. But, that’s not the end of the story; Arena and a partner had been caught just a few months earlier using synthetic identities to swindle the federal government out of another million dollars. The duo used fake IDs to claim benefits meant for people who were unemployed or had lost their businesses as a result of the pandemic.
Synthetic identity fraud schemes can get quite complex, but that doesn’t mean they will require a lot of manpower to operate. A single person or small group can do a massive amount of damage.
Atlanta Fraud Ring Busted
In 2022, Corey Cato of Atlanta, Georgia, was sentenced to more than seven years in federal prison for participating in a nationwide synthetic identity fraud ring. The group used fabricated personas to open lines of credit, create shell companies, and steal nearly $2 million from financial institutions.
Cato had been part of the scam ring since 2017. The ring maintained space at a commercial mail receiving agency, thereby insulating themselves from detection for years. Cato had even rented an apartment for himself using a stolen identity.
Florida Men Steal Covid Relief Funds
In another case, two Florida men were charged with bank fraud conspiracy for allegedly using synthetic identities to commit crimes, including defrauding banks and stealing over $3 million from Covid-19 relief programs.
Jean Fleuridor, Hasan Brown, and other co-conspirators used approximately 700 synthetic identities to create bank accounts and shell companies. They then used the fake profiles to apply for federal loans meant to help small businesses make it through the covid-19 pandemic.
Nearly Decade-Long Sceme Busted in Ontario
Synthetic fraud is not just a US problem, either. In 2024, for example, Toronto Police arrested 12 persons alleged to have created more than 680 unique synthetic identities for the purpos of opening accounts and credit lines at banks across Ontario.
The investigation had started two years earlier, but revealed that the fraudsters had actually been operating since 2016. As of this writing, the scheme has resulted in confirmed losses of about $4 million.
As of this writing, the investigation is still ongoing, with Toronto Police confident that more accomplices are yet to be uncovered.
