Federal prosecutors charged two people with fraud for helping at least three other people create false credit histories, which in turn allowed them to acquire millions of dollars in mortgage loans. The case marks the first time the Department of Justice has charged individuals with providing customers fake credit histories, according to U.S. Attorney Beth Phillips.
The defendants are Gerald William Bartlett, 38, of Tampa, Fla. and Karen Washam-Hawkins, 48, of Carson, Calif. Each faces charges of interstate transportation of funds obtained through fraud and conspiracy to defraud the U.S. government. Washam-Hawkins also faces two additional wire fraud counts.
According to the indictment, in late 2004 or early 2005, Washam-Hawkins was paid to provide false Social Security numbers to Shade Jerome Howard, who lived in California at the time. Howard purchased numbers for his own use and aided two others - Ron Brown of Gladstone, Mo. and Daryle Edwards of Overland Park, Kan. - in obtaining false Social Security numbers.
Bartlett is accused of using his companies, Consumer Financial Group and South Florida Management Group, to artificially increase the credit scores of fake Social Security numbers by reporting false payment and account records to credit bureaus.
Brown, Howard and Edwards are accused of purchasing six homes valued at more than $2.7 million with the false numbers and credit information.
The three men all were sentenced earlier this year for participating in a $12.6 million mortgage scheme in Kansas City that involved 25 high-priced homes. It was that scheme that led FBI investigators to the credit card fraud.
"Credit history fraud poses a significant threat to our financial institutions and undermines our economy,” says Phillips. "Using a false Social Security card or in any way misrepresenting your financial history is a significant crime with significant penalties.”
Federal investigators recently have discovered a proliferation of companies that sell stolen Social Security numbers disguised as credit repair tools called credit profile numbers, also known as credit privacy numbers.
Investigators say children are key targets because most will not use their Social Security numbers to get credit for several years, which means fraudsters can use their numbers for long periods of time undetected.