As fraud detection technology and electronic payment methods make some of the most common embezzlement schemes more difficult to perpetrate without getting caught, fraudsters are resorting to increasingly creative tactics to get what they want. A quite recent, and intricate, example of this type of dishonest ingenuity involves credit history fraud. In July 2010, two individuals were indicted for their roles in a credit history fraud that allegedly contributed to a multi-million dollar mortgage fraud. One of the individuals, a real estate agent, purportedly obtained and sold false Social Security numbers (SSNs) to individuals to use when applying for mortgages. The agent also incorporated two companies — under the guise of financial institutions with fairly generic names — to report positive payment histories for the individuals to the credit bureaus, which increased the borrowers’ credit scores. The resulting stellar credit reports were then used by the borrowers to obtain home loans. Although this case has not yet been resolved, it brings up some critical questions: How can people perpetrate this kind of crime and fool mortgage lenders into giving such large amounts of money? And, more importantly, how can such schemes be prevented and detected?
http://www.acfe.com/newsletters/fraud-examiner.asp?copy=sept10-credit-history-fraud
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