Compliancex

One might not expect to become a scam victim by being in the files of the Minnesota Board of Psychology. But that’s what happened when the board’s confidential information was made available to Robin Dawn Finger, a 43-year-old receptionist.

Finger, who has just pleaded guilty in Minnesota federal court, became part of an identity theft and counterfeiting ring that ripped off $2 million from individuals, financial institutions, and retail stores across a 14-state radius.

The dollar amounts are miniscule by Wall Street standards. But the case may be instructive for compliance officers, because it shows how low the fruit can hang for smart but dishonest people.

Which leads to the question: How safe is the confidential information at your shop?

Last January, the Department of Justice announced that 19 Minnesota residents had been charged in the case that eventually involved Ms. Finger. Twelve were indicted and seven others had already been arrested and charged through the filing of criminal informations. They included men and women ranging in age from 19 to 56.

The scam operated this way: Most members of the ring had access to information on other people, primarily through their places of employment. The details varied, but often included the names, dates of birth, and Social Security and driver’s license numbers of unsuspecting people.

Other documents were also stolen through auto break-ins, burglary, and mail theft. The information was then used used to manufacture bogus identifications and counterfeit checks. The bad checks, in turn, were used to buy expensive retail goods that would later be returned – often on the same day – for cash.

Other times, counterfeit checks would be deposited in bank accounts belonging to legitimate, unwitting victims. Cash would later be withdrawn from the same accounts.

The scheme was successful from 2006 through 2011. Now, prosecutors are laboring through a list of defendants, all charged with counts ranging from aggravated identity theft to bank fraud.

Robin Finger pleaded guilty in the case on June 21. She could get a maximum of 30 years in prison, prosecutors said. Ten of her co-conspirators have pleaded not guilty, and are scheduled for an Aug. 20 trial.

Read an account of the federal indictments here.

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James Welsh is a financial writer specializing in compliance and securities fraud issues. He also authors the “Top 10” column at www.thestreetsweeper.org, and has held staff editing and writing positions at newspapers including The Times-Picayune of New Orleans and the Orange County (Calif.) Register.