Theft of Credit a Pervasive Problem Fraud

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Theft of Credit a Pervasive
Problem Fraud: Downey case reflects scams that rip off an estimated
$1 billion yearly nationwide in goods, cash. It’s becoming known as
crime of ’90s :[Ventura West Edition]. ” Los
Angeles Times (pre-1997 Fulltext)  [Los Angeles,
Calif.] 15  May 1994,16.
Los Angeles Times. ProQuest.  ***INSERT Library name or system, City,
State***.  28 May.
2007

 

Last year, LaGrone allegedly obtained [Debbie Gallegos]’ credit
card account numbers, a secret password on one account and new
credit cards. Authorities say LaGrone made $1,000 in withdrawals on
Gallegos’ account at an automated teller machine in Downey and
received $2,500 in cash advances that were charged to Gallegos’
account at various Sears stores, court documents show.

LaGrone’s attorney, Charles Mullis, scoffed at police
contentions that LaGrone masterminded a clever scheme. He said
authorities have no proof that LaGrone was the person who purchased
fraudulent goods over the phone through companies such as the Home
Shopping Network, which sell merchandise on television.

Police say they have identified [Debra LaGrone] in surveillance
photographs at an automated teller machine in Downey withdrawing
funds on the credit account of one of the alleged fraud victims,
Debbie Gallegos. LaGrone told police the card belonged to the
friend, who had asked LaGrone to withdraw money.


Full
Text (1598   words)

(Copyright, The Times Mirror Company; Los
Angeles Times 1994all Rights reserved)

Each time, the news came as a surprise.

One woman received a note from a department store thanking her
for buying $600 worth of cosmetics she knew nothing about. Another
discovered $3,200 in charges for jewelry she had never seen. A
third learned that someone used an automated teller machine to
withdraw $1,000 from her credit account.

Authorities say one person, Debra LaGrone of Downey, carried out
each transaction.

According to court documents, LaGrone allegedly stole credit
card numbers and other personal information while working at
various mortgage companies, then purchased thousands of dollars
worth of goods in the names of people she had never met.

When Downey investigators searched LaGrone’s townhouse in
January, they found credit cards with other people’s names and
account numbers, jewelry that had been fraudulently purchased, and
a spiral notebook filled with names, home addresses and credit
information of people who had recently refinanced their homes.

Authorities identified at least 15 individuals across Southern
California as victims, in addition to numerous small merchants,
department stores, credit card companies and banks that incurred
thousands of dollars in losses.

LaGrone, 39, who has held a variety of jobs in the loan business
in the past 20 years, faces 16 felony charges, including commercial
burglary and receiving stolen property. She is in jail in lieu of
$55,000 bail and awaits a June 9 pretrial hearing in Norwalk
Superior Court.

LaGrone has pleaded not guilty and contends that a friend who
was recently convicted of a similar crime left the questionable
credit cards at LaGrone’s house and gave her some of the
merchandise.

Investigators say the case is a brazen example of what they call
the crime of the ’90s-credit card fraud perpetrated by individuals
and organized rings who rip off an estimated $1 billion a year in
goods and cash nationwide.

Thieves have been known to steal credit information from
mailboxes and garbage bins, during home burglaries or after
purse-snatchings. But authorities are increasingly concerned about
insiders-bank tellers, real estate agents, automobile salespeople,
loan processors and others-who have access to confidential
information that can open doors to lines of credit and bank
accounts.

People with credit cards rarely lose huge sums of money when
their cards are used to make unauthorized purchases. Their
liability is limited to $50 per card. But it often takes months to
purge their credit reports-a process some have called a
bureaucratic nightmare.

Even worse, some victims say, is the anguish of knowing that
someone has tapped into their personal lives and has access to
their Social Security numbers, home addresses, dates of birth and
other family history.

“I feel violated,” said Orange resident Debbie Gallegos, an
alleged victim of LaGrone. “Someone (has) assumed your identity.
That’s what is terrifying. You don’t know who’s doing it or
why.”

Last year, LaGrone allegedly obtained Gallegos’ credit card
account numbers, a secret password on one account and new credit
cards. Authorities say LaGrone made $1,000 in withdrawals on
Gallegos’ account at an automated teller machine in Downey and
received $2,500 in cash advances that were charged to Gallegos’
account at various Sears stores, court documents show.

Downey investigators suspect that LaGrone gained access to
Gallegos’ credit information while working at a Newport Beach
mortgage company last summer. Gallegos refinanced her home through
the company early last year. When company officials checked
recently, they found that information was missing from Gallegos’
file, according to court records.

LaGrone is accused of obtaining confidential information on
numerous other people from files at companies in Los Angeles and
Orange counties. She allegedly contacted credit card companies,
reported cards missing and then requested replacements as well as
address changes, according to court records.

Posing as the cardholders, LaGrone allegedly applied for loans
and obtained cash advances in other people’s names, made cash
withdrawals and ordered merchandise through department stores,
jewelry boutiques and clothing catalogues, records show.

In one instance, one of the victims had nearly the same name,
Dorothy LaGrone. Over a several-month period last year, Debra
LaGrone allegedly used Dorothy LaGrone’s name and credit history to
obtain a $2,500 loan and purchase thousands of dollars in goods,
including $9,300 in jewelry from a Costa Mesa store, court records
show.

Even an attorney hired to represent Debra LaGrone early in the
case was apparently caught in the web, police say. LaGrone
allegedly used someone else’s credit card number to pay $1,000 to
attorney John McDonald, court records show.

In all, authorities documented more than $50,000 worth of
purchases, many of them allegedly delivered to Debra LaGrone’s
Downey residence and to her mother’s former home in Bellflower. Her
mother, Kathleen Montgomery, said no goods were delivered to the
Bellflower home.

Downey fraud detectives, who spent 2 1/2 months on the case, say
the actual amount of purchases and number of victims may never be
known. “I think we uncovered the tip of the iceberg,” said Sgt.
Greg Griffin, who led the Downey police investigation. “There were
so many credit card numbers in (LaGrone’s) day planners that we
didn’t have time to check them all.”

Sheriff’s fraud detectives began an investigation last July
after a security officer from the Broadway department store in
Cerritos complained that someone had made several unauthorized
purchases on a customer’s credit card. Downey detectives later
began their own investigation after receiving a fraud complaint
from a credit card company.

LaGrone was arrested Oct. 4 and released on bail two days later.
She was arrested again Jan. 14 after police searched her Downey
residence. She told police that the goods found in her house had
been given to her or sold to her by a friend who had also worked at
some of the same mortgage companies.

LaGrone also said credit cards in other people’s names and
account information had been left behind by the friend. LaGrone
said the friend was having mail in other people’s names delivered
to the Downey address.

Authorities said the friend, who was recently convicted of
fraudulently using a bank card in an unrelated case in Orange
County, is not a suspect.

LaGrone’s attorney, Charles Mullis, scoffed at police
contentions that LaGrone masterminded a clever scheme. He said
authorities have no proof that LaGrone was the person who purchased
fraudulent goods over the phone through companies such as the Home
Shopping Network, which sell merchandise on television.

“If Debra LaGrone is such a sophisticated criminal, why was she
dumb enough to have all the stuff mailed to her address?” Mullis
asked. “Police assume it was Debra LaGrone because the merchandise
was shipped to her house, but it’s not an open-shut case.”

LaGrone’s daughter, Sheri, said her mother, a 1972 graduate of
Lynwood High School, would not jeopardize a career of more than 20
years in the loan business in which she rose from a secretary to
loan processor jobs earning more than $40,000 a year.

Sheri LaGrone, 18, also was arrested but was not charged. She
said she frequently turned away goods delivered to the condominium
in other people’s names. She insisted, however that her mother, who
is divorced, is innocent.

“I know my mom wouldn’t do this,” she said. “I’m watching my
mother go through this trouble for something she didn’t do. It
seems like the police can send her to jail, innocent or not
innocent.”

Police say they have identified Debra LaGrone in surveillance
photographs at an automated teller machine in Downey withdrawing
funds on the credit account of one of the alleged fraud victims,
Debbie Gallegos. LaGrone told police the card belonged to the
friend, who had asked LaGrone to withdraw money.

Two eyewitnesses also have identified LaGrone in court as the
person who purchased jewelry and applied for a loan using other
people’s credit or identification, court records show.

Also, Downey investigators found a credit report in LaGrone’s
townhouse belonging to a client of one company where she had
worked. LaGrone told police she had taken the file home to work on
it, records indicate. Details of the search and the victims’
accounts are documented in a stack of police reports nearly an inch
thick.

Consumer advocates say cardholders have good reason to be
concerned about whether their credit information is secure. Many
companies don’t do an adequate job of screening employees who have
access to personal information on customers, critics say.

Two of LaGrone’s previous employers, for instance, said they ere
unaware that she had been convicted in 1988 on charges of check
forgery and sentenced to 60 days in jail and three years’
probation. They said they would not have hired her had they known
of the conviction. Critics also say there are so many credit cards
in use that offenders can go undetected for months or years.

Credit card companies say they have tightened security during
the past decade. They use computers to detect unusual spending
activity on clients’ accounts, such as numerous expensive purchases
in a short period.

Some credit card companies place clients’ pictures on cards and
use three-dimensional images to make alterations more difficult.
But critics say those safeguards have limited value because so many
credit purchases are now made over the telephone.

Investigators also say that as the technology to fight the
problem improves, so will the crooks’ ingenuity.

“If we come up with the most foolproof system to beat credit
card fraud, somebody is going to find a way to beat the system,”
said Sgt. John Garcia of the Los Angeles County sheriff’s forgery
and fraud detail.

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