You may know all about personal identity theft, where scammers pretend to be you so they can buy stuff or take out loans in your name.
Now, identity thieves have taken the crime to the next level by impersonating companies, not just consumers. And why not? Impersonating a company isn’t that much harder or riskier than impersonating an individual, and the potential take is huge in comparison. It’s like the difference between stealing just one cookie or taking the whole jar.
The recent West Virginia case
The first public case of corporate ID theft was just discovered in West Virginia. State auditor Glen Gainer, while reviewing the books, found that his office had paid out $2 million into accounts opened by fraudsters pretending to be state vendors. The criminals, who remain at large, submitted phony invoices to West Virginia that appeared to be from legitimate companies – Deloitte Services and Sedgwick Claims Management. West Virginia paid out the invoices by making direct deposits into the accounts opened by the criminals, who in turn took the money and ran.
Because government contracts with private companies must legally be made public, they are an easy target for identity thieves to exploit.
It remains unclear if vendors Deloitte and Sedgwick will ever be legitimately paid. Gainer says the state certainly won’t be reimbursing them for the missing funds. They may not even receive restitution from the state because the law is pretty fuzzy (possibly even non-existent) concerning the rights for victims of corporate identity theft.
Ultimately, this is a case of West Virginia taxpayer money completely wasted by going straight into the pockets of fraudsters. Identity thieves are pros at recognizing easy money; Until government, businesses, and consumers do more to prevent the crime from happening, our “cookie jar” continues to be at risk.