Businesses and consumers have better tools to combat identity fraud, which has spurred criminals to adopt more advanced methods of exploiting stolen personal data. Instead of simply stealing identities, criminals are creating new synthetic identities using real personal information such as social security numbers or birth dates.
Since synthetic fraud is based on real personal information, it can still impact an individual’s credit score and cost businesses millions, as evidenced by a recent Toronto synthetic fraud bust. After a lengthy investigation, Toronto Police arrested 12 alleged fraudsters on 102 counts. The ring caused estimated losses of around $4 million.
A Far-Reaching Scheme
The scheme had been operational since 2016, but the investigation didn’t begin until late 2022. A financial institution discovered several synthetic identities created by a former employee.
Further investigation found the extent of the scheme. The fraudsters created over 680 synthetic identities, which they used to open hundreds of banking and credit accounts.
Once they gained access to credit, they engaged in various activities, including in-store and online purchases, cash withdrawals, and electronic funds transfers to their other accounts. They even made fake payments on the credit accounts to keep them up and running.
Operating with Impunity
Though it’s alarming that the Toronto ring was able to operate with impunity for so long, it’s not uncommon. Fraudulent activity has continued to evolve, spawning threats that are often based on personal identity information.
More sophisticated technology has allowed criminals to fabricate realistic documentation. The Toronto police seized several dozen fake government IDs, as well as the electronic templates that were used to create them. They also seized hundreds of debit and credit cards that were connected to synthetic identities, and $300,000 in Canadian and foreign cash.
Even after the arrests, Toronto police don’t believe they’ve apprehended all the suspects or identified all facets of the scheme. Because synthetic identities aren’t fully tied to any real person, the fraud can go undetected for years. It’s possible that there are businesses affected by the Toronto fraud ring, and don’t know it yet.
