Fraudsters faking identities, duping banks

Instead of using the stolen identities of real people, a Toronto-based fraud scheme was based on the manufacture of false identities, which duped financial institutions for at least $4 million, according to police.

Toronto police said 12 people have been arrested and 102 charges laid in the wake of an 18-month investigation by its financial crimes unit, known as Project Deja Vu, which uncovered a so-called synthetic-identity fraud scheme that began in 2016.

“The investigation began with a report from a financial institution [that] located several synthetic accounts, most of which had been opened by a single person who had previously worked on behalf of the company,” police said.

In total, police allege that the more than 680 synthetic identities were created by the ring, which were then used to open hundreds of bank accounts and credit products at various financial institutions across the province.

These accounts were used for in-store and online purchases, cash withdrawals, and electronic fund transfers, generating $4 million in confirmed losses, police said. Police investigators believe there may be additional incidents of fraud and victims of the scheme.

In addition to the underlying fraud, such accounts created under synthetic identities can be used for money laundering from other serious crimes, such as human trafficking, drug trafficking and armed robbery, police warned.

None of the allegations have been proven.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.