ID Theft Scheme Strikes Close to Federal Reserve

Bernanke's personal bank account struck by ID theft

WASHINGTON -- An elaborate identity theft scheme has reached the highest levels of the U.S. financial system, striking the personal bank account of Federal Reserve Chairman Ben Bernanke and his wife.

Bernanke's checking account became entangled in an elaborate identity-theft scheme after his wife Anna's purse was stolen last August at a Capitol Hill Starbucks. According to a District of Columbia police report, it contained her Social Security card, checkbook, credit cards and IDs.

It's not been revealed how much money was stolen from the Bernankes' account, but someone started cashing checks on their bank account just days after the purse was stolen from her chair.

The thefts helped fuel an ongoing investigation into a sophisticated ring.

Losses from the fraud totaled more than $2.1 million and involved at least 10 financial institutions, court documents said. Clyde Austin Gray Jr., of Waldorf, Md., a suspected ringleader in the scheme, pleaded guilty on July 22 in Alexandria, Va., federal court.

The banks bore primary responsibility for the losses and the victims' accounts, including the Bernankes, were most likely made whole.

"Identity theft is a serious crime that affects millions of Americans each year," Bernanke said in a statement. "Our family was but one of 500 separate instances traced to one crime ring. I am grateful for the law enforcement officers who patiently and diligently work to solve and prevent these financial crimes."


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Prosecutors wrote that Gray hired pick pockets then made counterfeit IDs for the participants. The coconspirators conducted the bank transactions, and Gray took a cut of the proceeds.

At least one check from the Bernanke account for $900 was deposited Aug. 13, 2008, into the account of another identity theft victim at a Bank of America branch in suburban Maryland, according to an affidavit filed in D.C. Superior Court. Authorities alleged that George L. Reid, 41, of Washington, cashed checks that day amounting to at least $9,000 in a string of transactions after the fake deposits inflated the related account balances.

"We're looking into it," Bank of America spokeswoman Tara Burke said Thursday. "We're still gathering facts."

It's not unusual to hear of high-ranking officials caught up by identity theft, said Brian Lapidus, an identity theft expert with Kroll Fraud Solutions. His firm has worked with celebrities, senators and others who have been victims.

"To an identity thief, we're all just names, Social Security numbers and dates of birth," Lapidus said. "Identity theft is the fastest growing crime in America."

Beth Givens, director of the Privacy Rights Clearing House in San Diego, agreed, saying some Fortune 500 executives have been targeted because they have considerable financial resources. Still, she said, the Bernanke case sounds unique.

"I find this case interesting because it's a crime ring engaged in activities that have been primarily the purview of petty individual criminals -- purse snatching," she said.

Ten defendants, including Reid, have been identified in the investigation conducted by the U.S. Postal Inspection Service, the Secret Service and D.C. police. The scheme involved using stolen IDs, bank records, personal checks and other items to impersonate victims at bank branches, according to an affidavit signed by Postal Inspector William J. Aiello.

Victims were targeted in D.C., Maryland, Virginia, Illinois and elsewhere. Part of the scheme involved checks stolen from the Combined Federal Campaign for the National Capital Area, an official federal government-sponsored charity.

Court filings show Reid has confessed to depositing checks from an account that belonged to someone named "B.B." He was first charged in D.C. Superior Court for identity theft and had confessed to law enforcement officials, according to the June 8 affidavit filed in federal court in Alexandria, where the case was

An arrest warrant for Reid, though, is outstanding in the current case, according to court records. Sylvester Vaughn pleaded guilty on July 6 and is scheduled for sentencing with Gray in September.

A message to an attorney who represented Reid in the D.C. case was not immediately returned. Court records didn't show an attorney for Reid in the current case.

AP Business Writers Christopher S. Rugaber and Marcy Gordon contributed to this report. 

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