Man sentenced for micro-deposit scam

Thursday, September 17, 2009

A 22-year old man was sentenced to 15 months in prison and restitution of $200,073.44 for fraud and related activity in connection with computers. After release from prison, Michael Largent will also face three years of strict restrictions on his use of computers and the Internet.

According to Assistant United States Attorney Matthew D. Segal, a prosecutor in the Eastern District California U.S. Attorney’s Office’s Computer Hacking and Intellectual Property (CHIP) unit, from November 2007 through May 2008, Largent wrote a computer program that allowed him to defraud E*Trade, Charles Schwab & Co., and Google by opening or attempting to open more than 58,000 brokerage accounts. He did this to steal the “micro-deposits.” A financial institution will make a micro-deposit when an account is opened to test the functionality of an account. The amounts deposited in this case ranged from $0.01 to $2.00.

Largent used false names, addresses, driver’s license numbers, and social security numbers, including the names of known cartoon and comic book characters to open the accounts. When the deposits occurred, he would transfer the funds into his own bank accounts or onto prepaid debit cards, without the authorization or knowledge of his victims. As a result, Largent fraudulently obtained or attempted to obtain tens of thousands of dollars, which he used for personal expenses.

E*TRADE and Charles Schwab detected the fraud and notified law enforcement independently of each other. Largent was originally indicted in May 2008.

In sentencing Largent, United States District Judge Morrison C. England Jr. observed that Largent’s scheme took some sophistication, and wondered why he had not used his skills and talents in a lawful way.

Original Source: http://www.databreaches.net/?p=7182
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