Payments scam nets fraudster $50,000 from online brokers

A California man has been charged with multiple counts of fraud for allegedly stealing more than $50,000 from online brokerages by opening thousands of accounts using the names of cartoon characters.

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Payments scam nets fraudster $50,000 from online brokers

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Michael Largent of Plumas Lake, California, is accused of writing a computer script to fraudulently open over 58,000 online brokerage accounts with false names, addresses and social security numbers at E*Trade, Schwab and elsewhere between November 2007 and May 2008.

Among the names he used were Johnny Blaze from Marvel Comic's Ghost Rider and Rusty Shackelford and Hank Hill from cartoon series King of the Hill.

Largent allegedly then took advantage of a procedure used by the companies which sees small "micro-deposits" of between one cent and two dollars made into new customers' accounts to verify the information.

The deposits were made into online bank accounts he opened with Capital One, Metabank and E*Trade, among others. Largent is accused of siphoning off more than $50,000 in micro-deposits, which he tried to load on to pre-paid cards.

Investigators say Largent was caught out by the USA Patriot Act's requirement that financial firms verify the identity of their customers.

Schwab was notified in January that more than 5000 online accounts had been opened with bogus information, leading to an investigation by the secret service. It is thought this probe uncovered over 11,000 accounts under the name "Speed Apex" from the same five IP addresses, all of them tracing back to Largent's Internet service.

It is thought that Largent also used the same trick with the Google Checkout service and accumulated thousands of dollars in numerous accounts held at Bancorp Bank.

Largent has been charged on counts of computer, mail and wire fraud. He is currently free on bail and is scheduled to reappear in court on 19 June.

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