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Internet crime spree broken 03/16/00
By Joe Tyrrell and Mark Mueller STAFF WRITER
Armed only with a computer, authorities say, Michael Diamond pulled heist after heist, enriching himself by tens of thousands of dollars.
As the 29-year-old real estate agent allegedly raked in PalmPilots, televisions, computers and other items, his victims, a disparate group of dozens from across the country, never knew what hit them, learning only later that they had been targets of an information-age fraud.
Diamond, authorities charge, is the quintessential identity thief, a man of many names and little conscience, one among a new breed of cyber-pirates who exploit the vulnerabilities of the Internet in the quest for easy money.
Finding personal information about people by trolling legitimate databases, Diamond allegedly used that intelligence to obtain easy credit over the Internet. Remaining online, he then allegedly ordered expensive merchandise using the pilfered identities.
Diamond's digital crime spree came to an end Tuesday morning, when an undercover detective posing as a deliveryman arrived at a Hillsborough condo with a laptop computer Diamond ordered under someone else's name, Somerset County Prosecutor Wayne Forrest said yesterday.
Once Diamond signed for the item, members of the Secret Service, the State Police, Hillsborough police and the prosecutor's office arrested the Brooklyn man.
Inside the condo, which belongs to the parents of Diamond's girlfriend, police uncovered evidence that Diamond had stolen the identities of about 60 people to fuel his Internet spending, Forrest said.
So far, investigators have traced only a handful of the credit accounts involved, Forrest said, "and already we're close to $20,000 in merchandise, so it could be a lot more by the time we're through."
Diamond, who also goes by the names Keith Diamond and Jermaine Burton, was charged with fraudulent use of a credit card, theft by deception, wrongful impersonation and theft of identity. Bail was set at $25,000.
Diamond also was wanted by the FBI on federal bank fraud charges for allegedly cashing about $415,000 in counterfeit checks from a Long Island bank. He was expected to be arraigned on the bank charges today in federal court in Newark.
The announcement of the Somerset County arrest came as government officials, law enforcement agents, business representatives and fraud victims gathered in Washington, D.C., yesterday for the first-ever national summit on identity theft.
The meeting underscored just how serious a problem the practice has become, with hundreds of millions of dollars stolen each year. Identity theft victims spoke of nightmarish struggles to rebuild their credit after thieves bought cars, jewelry and other goods in their names, then stuck them with the unpaid bills.
''Identity theft is now a growing and major criminal threat," Treasury Secretary Lawrence Summers told those at the summit, adding that the rise of the Internet has made it easier for thieves to obtain and use personal information.
In 1998, Congress made identity theft a federal crime punishable by up to 15 years in prison. Since then, 22 states have followed suit. New Jersey's identity theft law went into effect in May, snaring its first offender a scant one month later. Under the state law, the amount of money stolen dictates the penalties, which range from probation to 20 years in prison.
But catching the thieves remains a problem. At yesterday's summit, experts said that in general, fewer than 10 percent of identity theft cases result in an arrest. In some cases, the experts said, law enforcement agencies aren't sure who has jurisdiction, leaving little or no investigation.
The low arrest rate is sure to embolden identity thieves, who authorities say carry out their crimes with relative ease.
''It's very easy to go online and obtain a credit card," State Police Detective Skip Johnson said yesterday at a Somerville news conference announcing Diamond's arrest.
Investigators said Diamond had no apparent background in computer studies or work. The databases he accessed contain public information, though some charge fees to find addresses or other details about individuals, Forrest said.
Authorities do not yet know what happened to most of the merchandise. Forrest said he suspects Diamond sold it.
The case began about two weeks ago when police in Upper Makefield Township, Pa., where one of the alleged victims lives, contacted authorities in Hillsborough, Forrest said.
Afterward, Wal-Mart Corp. notified Hillsborough police about a computer shipped to a local address and charged to a credit card obtained in the name of a Kansas resident, Forrest said.
The FBI already had obtained a federal warrant for Diamond in the counterfeit check case, Forrest said. The Secret Service was brought in because the agency is responsible for interstate cases involving credit card fraud, Forrest said
-- Martin Thompson (email@example.com), March 16, 2000