This week, a large organized identity theft scheme was uncovered against the State of Texas by a Chinese Crime gang operating out of New York.
The Texas Department of Public Safety (DPS) revealed that the Chinese criminal organization specifically targeted Asian Texans on its driver’s license website and got them to send 3,000 ID’s out of state fraudulently.
Those licenses were sold for thousands of dollars to people from China who would use them to come to the country illegally. Many of those same immigrants were forced to become indentured slaves once they arrived.
The Fraud Ring Targeted Texas.Gov And Duped Them Into Sending Duplicate Licenses
The perpetrators carried out their scam via Texas.gov, the state’s government portal. The Chinese gang created over 4,000 different Texas.gov accounts
Although the agency uncovered the plot in December, it will only send notifications to victims via letters beginning this week, according to the agency head.
The criminal group obtained Texan driver’s licenses by initially sourcing personal information on individuals with Asian surnames. This was accomplished by scouring the “dark web” and other black-market data-trading platforms.
Having gained access to vital details such as prior residences and family names, the perpetrators could respond accurately to security questions on the Texas.gov website by guessing the right answers.
“The identity questions could be something you may have shared with a credit card company or something like your mother’s maiden name, your first vehicle that you ever had, your favorite sport,” DPS director Steve McCraw said
Once they hacked in, they used stolen credit cards to order duplicate licenses. Duplicate licenses can be ordered online for $11 a piece when drivers lose or misplace them.
The ID Fraud Spans Four States, and Now The FBI Is Investigating
The probe into the stolen driver’s licenses stretches across at least four states and encompasses fabricated licenses replicated from Texas and out-of-state victims.
The FBI and the Department of Homeland Security are also conducting their own inquiries into the fraud.
DPS representatives have chosen not to classify the occurrence as a “data breach” due to the absence of hacking and because significant quantities of data were not extracted.
Instead, the criminal gang leveraged information acquired from illicit sources to circumvent a rudimentary password protection system, revealing a security flaw that McCraw insisted “never should have occurred.”
The Scheme Was Uncovered When CardHolders Started To Dispute Charges
The scheme was initially detected when a vendor of Tex.gov notified the DPS of an uptick in chargebacks against credit card charges for certain internet transactions.
After further investigation, they uncovered that all of the requests for duplicate licenses using those stolen cards were also fraudulent.
The scheme would have likely been stopped before the licenses were sent, but the state did not appear to do nominal checks such as checking the CVV2 codes and other easy fraud checks.
The Identities Were Sold To Look-Alike Chinese Immigrants
DPS suspects that the fraud ring targeted Asian surnames because they could easily resell those “Real ID” cards to people who looked similar to the person’s picture.
Since they found the information on the dark web, they could profile people based on age and other factors that might match the illegal aliens that were buying the ID cards.
Victims of the identity theft are currently being notified by DPS.