A US national and an Italian national were sentenced to 18 months and 20 months, respectively, for their roles in operating an identity fraud service over the Darknet marketplaces AlphaBay Market and Dream Market. Both plead guilty to selling fraudulent New York state driver’s licenses, fraudulent identity information, full “identity packages” including social security numbers and birth certificates, credit card holograms, and ATM skimmers in exchange for cryptocurrency. The criminal group is estimated to have conducted between $250,000 and $400,000 worth of transactions on AlphaBay Market alone between May 2015 and October 2017. The investigation was conducted jointly by the FBI and the US Postal Service. Approximately $135,000 of proceeds were seized as part of the criminal justice proceedings.
Fraudulent identity packages and documents sold over Darknet marketplaces are widely available and a growing source of criminal financial fraud, which can involve both private and government organizations in the United States. The liability for such fraud falls upon the organization and represents a significant source of financial loss – for example, in the US, consumers are only liable for $50 of properly reported fraudulent credit card charges as mandated by the Fair Credit Billing Act. Therefore, consumers should be encouraged to regularly monitor credit reports and employ identity theft monitoring services.
Binary Defense Counterintelligence analysts monitor Darknet criminal forums and markets to detect information relevant to our clients, and frequently observe these and other instruments of fraud offered for sale. Financial institutions operating ATMs should consider security practices to detect and prevent fraud from ATM skimmers, including anti-tampering protection, changing the ATM cabinet access lock from the default key, and regularly inspecting ATM installations. Businesses that rely on identifying clients for legal purposes should have processes in place to detect fraudulent identification documents.