Sunday, June 1, 2008

Micro-Deposits = Macro Time On Your Hands

If you've ever set up some sort of an account online that deals with cash (specifically, eTrade and/or Charles Schwab) you know how it goes. You give them every piece of information about you from the time that you were born and most of the days in between. Sometime after you have "securely" transmitted all of your information (including the middle name of your 3rd grade teacher and what you had for your birthday dinner when you were 11) you will have your account. But it won't be activated until you can prove to someone (the Internet, I'm guessing) that you can access that account. That is, you're not going to be able to get your money (and I'm sure you'll be making millions off of that Nigeria thing any day now) unless you can get into the account. So most of these institutions that set up these accounts make a micro-deposit into your account. "Micro-deposit" is the cutesy term (that really isn't) for "pittance". They deposit a small amount of money into the account that is usually less than a dollar, but apparently, sometimes more than that and up to a couple of dollars. Then you look at the account balance and report how much money is in the account by sending the company an email or releasing a carrier pigeon or something. Seems simple right? What could possibly go wrong?

Michael Largent is what could possibly go wrong. Largent, 22, from Plumas Lake in California, had an idea. If he could open a lot of accounts and get a lot of micro-deposits, he would eventually have a lot of macro-cash, of which he could then pile up and roll around in like Scrooge McDuck, top hat and all! So Largent set about the task of opening over 58,000 fake brokerage accounts and just pilfering the micro-deposits. If you're wondering what that amounts to in US dollars, it comes out to over $50,000 in just over 6 months. And I'm not trying to quibble here, but that seems like an awful lot of work., if you "work" at a real "job" don't they give you "money" for that as well? If one was going to do this much "work", wouldn't one just go get a "job" so that, in the long run, one doesn't get "arrested"? You would think, wouldn't you? Yeah, well, you would and I would, but Mikey there wouldn't. And didn't.

So dude wrote a computer script that would open these accounts with fake names. For the names, rather than take the extra time to make something up he decided to go with the names of cartoon characters. (Hey, he was pretty busy with all of the fraud scheming to get overly creative. And I just explained how time consuming it all must be, he's just trying to save himself some illegal activity, that's all.) Wait. What?

Some of the names that Largent used to open brokerage accounts are:

  • Hank Hill - "The King of the Hill" patriarch

  • Speed Apex - (He opened 11,385 Charles Schwab accounts under this name. Hmmm...I wonder what finally tipped them off?)
  • Johnny Blaze - aka "Ghost Rider"

  • Rusty Shackelford - aka "Dale Gribble", exterminator on "King of the Hill".

Now, to get the pilfered pennies, Largent had the money routed to eight different bank accounts. He cashed out $8225.29 in micro-deposits from Google alone! (By the way, when Bancorp asked him about the thousands of little, itty, bitty deposits, he just said that in Google's terms of service, it didn't say anything about prohibiting multiple e-mail addresses and accounts. And I don't doubt that. But I'm kind of thinking Google would be assuming that you weren't going to be committing fraud with those multiple accounts. And by "multiple" I'm going to have to guess and say that they probably thought "maybe three", not "maybe three thousand". But that's just a guess.)

Yeah, I always thought that the micro-deposit thing was a little odd, but I'll admit that the opening of 50,000+ accounts to get the micro-deposits fraudulently is more odd. And it's pretty freaking weak, too. Dude, if you have the time to open 50,000 accounts, you have the time to get up in the morning and go to work. And when you get out of prison, we'd all appreciate it if you'd do so.

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