NSW Police have arrested and charged four members of an alleged organised crime ring that used online banking to create fraudulent accounts.
Detectives from the State Crime Command’s Financial Crimes Squad swooped on several Sydney locations last week to hit the group’s activities following an eight-month investigation.
The raids come after the Financial Crimes Squad set up Strike Force Kurraka in January to target large-scale identity theft and fraud against financial institutions.
Police will allege that the syndicate “created more than 300 fraudulent accounts through an online banking portal to apply for credit and loans to the value of more than $2 million”.
The fraudulent credit cards were then used to purchase various goods, including luxury cars and jewellery, and withdraw cash to pay for day-to-day expenses.
Police arrested a 46-year-old man from the south-west suburb of Wiley Park last Tuesday before carrying out two search warrants at Wiley Park and Mascot.
Various items were seized during the search, including “$27,000 cash, credit cards in various names, identity documentation, financial documentation, and a Mercedes Benz, a Mitsubishi, a BMW, and various items believed to be proceeds of crime”.
Police later seized a further $256,300 cash, watches, documentation and an electronic storage device from two safety deposit boxes at a vault in Sydney, as well as a cross trainer and watches from a storage unit at Belfield.
The 46-year-old man is charged with knowingly participate in criminal group assist crime, knowingly deal with proceeds of crime intent to conceal, possess identity info to commit indictable offence, dishonestly obtain property by deception, and dishonestly obtain financial advantage by deception.
Three other individuals were also arrested in connection with the syndicate, including a 42-year-old Wiley Park woman, a 56-year-old Mascot man and a 39-year-old Mascot woman.
The arrests follow a broader increase by banks and card issuers using online onboarding for customers seeking new bank and credit card accounts.
While online automation has saved banks millions in labour costs, it has also arguably created a new and cheaper vector for crooks that don't need to walk into a branch and can outsource activation.
Part of the growing challenge that banks and police face is that until digital identities backed by biometrics become mainstream in financial services, fraud will organically shift to what criminals perceive as the weakest link - in this case online applications using false or stolen identities.
It is understood that some institutions and card schemes expect a 'clearance' style push by carders to activate fraudulent accounts and cards using harvested credentials ahead of a systemic clean-out on the back of digital identity deployments and a shift to biometrics.