Make us your home page
Instagram

Street gangs migrate from drugs to white-collar crimes

A New York City police detective shows a credit card skimmer that a street gang used to copy metadata from legitimate cards and then manufacture counterfeit credit cards.

Associated Press

A New York City police detective shows a credit card skimmer that a street gang used to copy metadata from legitimate cards and then manufacture counterfeit credit cards.

NEW YORK — The Van Dyke Money Gang in New York made off with more than $1.5 million this year — but it wasn't in gunpoint robberies or drug running. It was a Western Union money order scheme.

In New Jersey, 111 Neighborhood Crips used a machine to make dozens of fake gift cards for supermarkets, pharmacies and hardware stores. In South Florida, gangs steal identities to file false tax returns.

These aren't members of an organized Mafia or band of hackers. They're street crews and gangs netting millions in white-collar schemes like identity theft and credit card fraud — in some instances, giving up the old ways of making an illicit income in exchange for easier crimes with shorter sentences.

"Why would you spend time on the street slinging crack when you can get 10 years under federal minimums when, in reality, you can just bone up on how to make six figures and, when you get caught, you're doing six months?" said Al Pasqual, director of fraud security at the consulting firm Javelin Strategy and Research.

Law enforcement officials say they see increasingly more gangs relying on such crimes. This year, more than three dozen suspected crew members have been indicted in separate cases across the country. Grand larcenies in New York City account for 40 percent of all crime last year, compared with 28 percent in 2001. About 5 percent of Americans nationwide have experienced some kind of identity theft, with Florida leading the country in complaints.

New York police Commissioner William Bratton wrote in an editorial in the city's Daily News last week that white-collar crime was being committed by gang members "to an astonishing degree."

Crews recruit bank account owners to help cash phony checks, they pay off crooked employees who skim credit card information using handheld readers and they buy identities online.

Pasqual said for some, it was a replacement for other crime. "For some it's a supplement. They're earning the money to grow the other side of their business, using white-collar crime to fund gun-running. For a lot of them this becomes their day-to-day. They travel the country when they get really good at it."

Florida crackdown

A task force created by federal officials in Florida has charged more than 400 people with causing more than $140 million in losses — including more than 60 charged three weeks ago — and officials say that increasingly, those arrested are gang members.

It's an organized crime — but not "Organized Crime," said Bill Maddalena, assistant special agent in charge of the white-collar branch of the Miami FBI office. "They're very well organized. They have to recruit people to help steal devices, cash the checks."

And because gang members are engaging more in fraud, there are fewer turf wars.

"There's still an element of violence," Maddalena said. "There's less head-to-head competition. They're attacking the government."

This violence can be more directly related to the crime, not like a drive-by shooting over a turf war that injures dozens. A postmaster killed over a key to open the post office boxes in Florida. In a Manhattan case, authorities found a scrap of paper in the pocket of a gang shooting victim that had the identification of another person.

"There's often violence surrounding the crime, but not necessarily in committing the crime," said David Szuchman, chief of the investigation division at the district attorney's office in Manhattan.

One step ahead

As officials crack down on one type of scam, criminals move on to the next. Gang members learn the craft from each other — but many are also millennials, "raised in a computer age, and they know how to use it," said Lt. Greg Besson of the NYPD's financial crimes task force.

The nation's largest police department has revamped how it responds to financial crimes after officials started noticing street crews with recoded credit cards. Now, the grand larceny division brings in detectives from the gang unit and other divisions to work together.

The Outlaw Gangsta Crips in Brooklyn made about $500,000 this year in a paycheck fraud scheme that involved obtaining a legitimate paycheck and then using the information to create and quickly cash phony checks before they were taken down. But they also robbed check-cashing stores and were charged with conspiracy to kill two people, authorities said. Most cases are pending.

In Union County in New Jersey, the 111 Neighborhood Crips made tens of thousands in fake tax returns — and four of the 12 indicted this summer were also charged with murder and attempted murder in separate incidents. Their cases are pending.

The Van Dyke crew operated out of a public housing development. Its scheme, uncovered this year, stretched along the East Coast, as far north as Boston and as far south as Washington. They recruited bank account holders and then used more than 350 accounts to deposit fake money orders. A dozen suspected gang members and associates were arrested and charged by federal officials with bank fraud and aggravated identity theft. A trial for some of the defendants is scheduled for early next year.

Street gangs migrate from drugs to white-collar crimes 12/21/15 [Last modified: Monday, December 21, 2015 9:54pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Law firm's Russia ties prove nothing about Trump

    Business

    The statement

    "Law firm @POTUS used to show he has no ties to Russia was named Russia Law Firm of the Year for their extensive ties to Russia. Unreal."

    Sen. Chris Murphy, D-Conn., stands during a media availability on Capitol Hill, Monday, June 20, 2016 in Washington. A divided Senate blocked rival election-year plans to curb guns on Monday, eight days after the horror of Orlando's mass shooting intensified pressure on lawmakers to act but knotted them in gridlock anyway — even over restricting firearms for terrorists. (AP Photo/Alex Brandon)
  2. Pasco county lawyer disbarred for taking woman's money

    Real Estate

    NEW PORT RICHEY — The Florida Supreme Court on Thursday disbarred Pasco County attorney and former congressional candidate Constantine Kalogianis.

    The Florida Supreme Court on Thursday disbarred Pasco County attorney and former congressional candidate Constantine Kalogianis. 
[2016 booking photo via Pasco County Sheriff's Office]
  3. Rick Scott signs package of tax breaks

    State Roundup

    TALLAHASSEE — Gov. Rick Scott signed a tax cut package Thursday that — while vastly scaled back from what he wanted — eliminates the so-called "tampon tax" and offers tax holidays for back-to-school shoppers and Floridians preparing for hurricane season.

    Florida Governor Rick Scott signed a tax cut package that will cost state coffers $91.6 million during the upcoming year. [Joe Raedle | Getty Images]
  4. FBI probes fraudster's alleged church scam following Tampa Bay Times report

    Real Estate

    PLANT CITY — Once again, the FBI is investigating felon fraudster Victor Thomas Clavizzao.

    The FBI is investigating convicted mortgage fraudster Victor Thomas Clavizzao on new allegations following a Tampa Bay Times report.
[TImes file photo]

  5. Tampa Bay is ground-zero for assignment of benefits cases over broken auto glass

    Banking

    When Rachel Thorpe tried to renew her auto insurance last year for her Toyta RAV4, she was stunned to see her monthly premium had nearly doubled to $600. The Sarasota driver was baffled since her only recent claim was over a broken windshield.

    Auto glass lawsuits filed by a third party (through what's known as assignment of benefits) are skyrocketing in Tampa Bay.
[Times file photo]