Citigroup Security and Investigative Services

Loan Application Fraud Robert Stanton

Sr Investigator

410-332-7745

• Citi Investigative and Security Services (CSIS) – North America/LATAM/Mexico/Asia Pacific (APAC)•Eastern Europe Middle (EMEA) and Central Eastern Europe, Middle East and Africa (CEMEA)

• Investigations and physical security

• Corporate Investigators cover Citi entities globally

• CitiFinancial, Citibank, Citi Mortgage, Citi Auto, Primerica, Citi Cards, CitiFinancial Retail Sales, etc.

• External and Internal Fraud and policy violations

• Forensic capabilities – ECrimes – Electromagnetic and Digital Media – Digital Forensic Examinations

•CSIS Units and Subsidiaries –

•AML – Anti Money Laundering

•Due Diligence Unit

•FICA – Financial Crimes Analysis Support

•Fraud Management Program – Zero Tolerance to fraud

•Employee Pre-screening

• Reviewing loan applications isn’t “Rocket Surgery” ?

• Look for the obvious – behavior (rushing/anxioustime of sale (store closing/peak season/sales event)

• Perform your due diligence/“Do your homework”.

• Verify information independently when possible, two Forms of photo ID.

• Look for consistency.

• Know your customer.

Fraudulent Loan Applications

• Insure employees are familiar with identification used(driver’s licenses) during loan closings.

• Obtain CURRENT month ORIGINALS of utility bill, bank Statement, credit card statement in the applicant’s name.

• Identify abnormalities, poor quality, out of focus finish, No holograms, state seals, etc.

• Recent issue dates, expiration dates don’t match dob.

• Cropped photo, no overlapping codes, seals, etc.

• Do the numbers make sense?

• Pay stub reflects bi-weekly pay period?

• Indicates 336 total hours worked during that time period.

• There are only 336 total hours in a two week period?

• Taxes, Social Security, fonts, cut and paste, etc.

• Female applicant using the same name with multiple ID’s, with various photo’s at different branches located in the same general metropolitan /geographic area.

• Branches failed to note recent multiple credit bureau inquires or new accounts on the credit bureau reporting.

• Fraud Alerts/Warnings/SSN issued in the last five years.

• Red Flag - Victim has excellent credit and qualifies for Maximum level loan (Premier).

• Red Flag - Applicant purchases “ALL” of the available insurance packages offered by the lender – quick to agree to extended warranty or not concerned with the price.

ORGANIZED FRAUD RINGS

• Ring targeted CitiFinancial branches in GA, FL, NC,CA, IN and LA.• Suspects recruited from homeless shelters in CA.•Suspects would register at local hotels/motels and await FedEx package that would contain ID and other necessary materials (paystub/SSN card/DL/etc).• Premier Loans (15K) Insurance products/single Loan Proceeds Checks.• Two suspects almost every time – applicant and driver(lookout) waiting in parking.• Cell phone communications back and forth – warningon the arrival of law enforcement. • Buffer maintained between operators and organizers.• Suspects would cash checks at local check cashingstores.

What is more valuable than your own good name?

Identity Theft is the fastest growing white-collar crime in the country.• It is estimated that 5-10 million Americans are touched by the effects of Identity Theft a year.

• Experts estimate that it takes customers approximately 600 hours and $1,495 in possible direct losses to restore one’s good name and credit.

LexisNexis, a worldwide leader in global legal and business data, said it discovered in the past 10 days that thieves had stolen data, including names, addresses, Social Security and drivers' license numbers, on up to 145,00 U.S. consumers

ChoicePoint data loss may be higher reported, In its regulatory 8-K document, filed on March 4, ChoicePoint said that it had restricted its search to a 15-month period, during which records on 145,000 consumers were purchased by 50 fraudulent companies. Now the figure is over 300,000.

Personal Data Theft: I t's Outrageous

It's long past the time to hold companies that collect personal info to higher legal standards when it comes to protecting that data Americans seem to be concerned, but not outraged, by news in recent

weeks that two big data collectors sold detailed personal information on nearly 500,000 people to buyers who had absolutely no business getting it. (BusinessWeek--APRIL 15, 2005)

InterceptionWhere does the fraudster get the information?Where does the fraudster get the information?

• Dumpster Diving• Public Record Information• Skimming• Phishing/Hacking • Theft of information from a workplace• Purchased information• Social engineering• Mail theft/Phony postal change of address • Theft of wallets containing personal information

Dumpster Diving

•One outside camera on dumpster location

ID Take Over“IT can happen to anyone”

Suspect targeted

ELDRICK “TIGER” WOODSELDRICK “TIGER” WOODS

in a credit scheme

USEOnce the information is obtained, how can it be put to use?Once the information is obtained, how can it be put to use?

“Show me the money!”“Show me the money!”

• Credit/Debit/ATM/Gift Cards • Consumer Loans• Fraudulent Applications • Wire transfers• Stolen or false Driver’s License• Full identity take-over• Utilities/Cell Phones

How Can I Tell if I’m a Victim of Identity Theft?•Monitor the balances of your financial accounts.

•Look for unexplained charges or withdrawals.

Other indications of identity theft can be:•Failing to receive bills or other mail signaling an address change by the identity thief.

•Receiving credit cards for which you did not apply.

•Receiving calls from debt collectors or companies about merchandise or services you did not buy.

•Denial of credit for no apparent reason.

What can you do to avoid becoming a victim?

• Don’t Carry Social Security Card, passports or birth certificates• Use a blue Postal mailbox for outgoing mail• Limit your Credit Cards• Do not give account number over the phone• Shred all credit card receipts• Order a credit report at least once per year• Remove Social Security number from your DL or checks• Cancel unused cards• Call your credit card company if you did not receive a new

one

Credit Bureau Contact Numbers

Equifax 1-800-685-1111Experian 1-800-682-7654Trans Union 1-800-916-8800