ERIE, Pa. — A tip from a Widget Financial employee has uncovered a massive nationwide fraud scheme.
The scam involves stolen identities that were used to open bank accounts, obtain credit cards and file about 2,400 fraudulent federal tax returns that cost the U.S. Treasury an estimated $10 million, some of which was funneled to Nigeria, according to the U.S. Attorney's office.
Five men have been indicted in U.S. District Court in Erie in connection with the alleged fraud, which, according to the indictment, dates to December 2005.
The fraud scheme was uncovered in 2012 when a Widget employee noticed that different out-of-state residents were filing applications to open CU accounts but using some of the same personal identification information, such as phone numbers. Widget CEO Gail Cook forwarded the details to the Federal Bureau of Investigation.
Trent Mason, CMO at the $253 million credit union, said no member data or money was compromised. "They thought opening an account in 'Anywhere, USA,' some small town, that we would not care. That is not the case at all. We were probably more vigilant," he told the Erie Times-News.
U.S. Attorney David Hickton said the investigation remains ongoing and that losses are expected to reach tens of millions of dollars, particularly when investigation of the fraudulent credit card activity is complete.
Hickton noted that it appears that the scam reached thousands of victims nationwide, some located in western Pennsylvania. He said authorities are still investigating the source of the stolen identification information used by the defendants.
Patrick Fallon, FBI assistant special agent in charge, said the indictment marks "the tip of the iceberg."
The defendants are: Doherty Kushimo, 52, of Providence, R.I.; Saburi Adeyemi, 56, of Memphis, Tenn.; and Abiodun Bakre, 49, Adetunji Gbadegeshi, 57, and Adebola Mejule, 54 — all of New York. Kushimo and Bakre face charges of conspiracy to commit fraud and aggravated identity theft, while the three other defendants face counts of conspiracy to commit fraud.
The men are all Nigerian nationals who were living in the United States. Three are U.S. citizens.
The defendants are also accused of obtaining false identification documents, including driver's licenses and Social Security cards, that were then used to open bank accounts at numerous locations throughout the United States, including at Widget, PNC Bank in Pittsburgh and Pennsylvania State Employees Credit Union in Harrisburg. Others banks listed in the indictment were located in Washington, D.C., Colorado, Washington, New Jersey, Michigan and Hawaii.
The government said the defendants used the bank accounts to deposit the fraudulently obtained tax returns. The defendants allegedly used the stolen identities to file false tax returns, which were completed in a way to make it appear that the filers were due tax refunds, the government said.
The defendants e-filed the fraudulent tax returns and used prepaid cell phones to hide their crime. The crooks also obtained software that allowed them to remain anonymous on the Internet and used wireless air cards to connect to the Internet, the indictment noted.
Kushimo was arraigned on the charges Monday before U.S. Magistrate Judge Susan Paradise Baxter and released to his home in Rhode Island. Mejule was arraigned Wednesday. The other three are awaiting further proceedings.