News Analysis: The details of seven initial arrests, part of "Operation Rolling Stone," show that Federal investigators are learning to grapple with the details of cyber-crime.
In sharing information about an undercover federal investigation of Web frauds involving credit cards and stolen tax refunds, the Secret Service demonstrated that it can adapt with the times.
The seven initial arrests stemming from what the Secret Service has dubbed "Operation Rolling Stone" show that federal investigators have started to learn how to crack through deceptive IP addresses and encrypted IM communications.
"Cyber-crime has evolved significantly over the last two years, from dumpster diving and credit card skimming to full-fledged online bazaars full of stolen personal and financial information," Assistant Director Brian Nagel of the U.S. Secret Services Office of Investigations said in a statement.
"We continue to adapt our investigative techniques to progressively combat emerging threats to our nations financial infrastructure," Nagel said.
Of the seven announced arrests, five are being prosecuted by the U.S. Attorneys office covering the Buffalo/Rochester New York area, one is being handled by the Los Angeles District Attorneys office and one is apparently being handled by the U.S. Attorneys office in Nashville.
The Los Angeles arrest was Shawn Mimbs, 27, said Deputy Los Angeles District Attorney Jeff McGrath.
The Buffalo/Rochester arrests were: Mohammad Dolah, 34, of Brooklyn, N.Y.; Benjamin Wade Pinkston, 24, unknown address; Elvis Berrios, 28, of Washington; Larry Hardiman, 52, of Toronto; and Bradley Robert Sokol, 19, of Selinsgrove, Pa., according to federal affidavits filed with the U.S. District Courts Western District. Those documents were sealed the afternoon of April 4.
No information was available on the arrests being handled by Nashville, said Deb Phillips, senior counsel to that offices U.S. Attorney. Authorities said the Nashville arrests might still be sealed.
Although these cases were all investigated by the Secret Service, one official involved in the prosecution, who did not want to be identified, said these were multiple unrelated investigations and that the Secret Service created the Rolling Stone code name afterwards to group them together.
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The investigative details of the cases given in interviews and court documents support the suggestion that these cases were indeed unrelated and were not part of a single undercover operation. That said, the investigators still employed very similar tactics aimed at piercing the Web-enabled secrecy of the identify-theft and credit-card stealing rings.
In Los Angeles, prosecutors have accused Mimbs of grand theft of U.S. property. Specifically, officials are charging that he went to public libraries and Internet cafes and used their Web access to visit the H&R Block tax return service Web site, McGrath said.
Once on the H&R Block site, he used stolen Social Security numbers and addressesoften from dead peopleto file bogus tax returns and request that the tax refunds be wired to bank cash cards that he could access, McGrath said.
Mimbs "found loopholes in the system," the prosecutor said, describing him as just "another thief using the Internet." Among the exploited loopholes, McGrath said, was that the IRS system didnt match its records with death certificates.
McGrath said Mimbswho was the sole defendant in the 14-count criminal complaint filed in Los Angeleswas discovered when some of the names he used for the tax returns were tied with people who were alive and who then tried filing for real tax returns. The IRS said they had already filed, the real taxpayers complained and the Secret Service started to investigate, he said.
Next Page: Feds investigate bogus credit cards.
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.