Abagnale: ID theft, fraud 4,000 times easier today

By Alex Goldman on June 24, 2009 8:14 PM

NEW YORK — Frank Abagnale, whose life story was the inspiration for the movie “Catch Me If You Can” about an imposter on the run from the FBI, spoke about crime today at the technology management conference of the Securities Industry and Financial Markets Association (SIFMA).

The former imposter and thief has now worked for the FBI for 35 years, helping the agency fight the kind of crimes he committed as a teenager years ago. “What I did is now 4,000 times easier,” Abagnale said.

“I needed a Heidelberg press. I needed to handle color separations, chemicals, and typesetting,” he added. “Now a criminal can go into a hotel and choose their victim from the advertising outside their window, say Continental Airlines. They can get the logo from the company Web site. They can type the company name to repeat in the background. They can pull a picture of an airplane taking off. In 15 minutes, they can make a four color check that’s prettier than the check that Continental actually uses.”

Abagnale said there’s too much information. When he committed fraud, he invented bank names and addresses, but today’s criminals don’t need to. A criminal could call accounts receivable and say they wanted to pay an invoice and get not just Continental’s bank but also the account number and routing numbers. “Tell a company you want to pay them and they’ll tell you everything,” he said.

A criminal can call corporate communications and ask for the annual report. “On page three are the signatures of all the company officers. It’s black on white glossy, camera-ready art,” he said.

Advising the FBI

Of course, Abagnale has been advising the U.S. government on how to prevent this sort of thing for some time. “I worked with the Treasury Department to redesign the currency. In 1996, we changed it for the first time in 72 years,” he said.

He added that the effort continues with a new $5 bill this year and a new $100 bill soon, but the Treasury cannot withdraw old bills.

He works on other projects regularly. “I do the same thing today that I did then. Corporations give me their ATM machine and I see if I can get around it.”

But systems are only as secure as the people who run them. “I get to walk around the TSA today but all I’d need to do is get to one person and if they lack character or ethics, the system is doomed and I get on board with the bomb. In 2008, white collar crime cost America $900 billion and it’s growing every year. When I was asked about aid to Katrina victims, I predicted that 40 percent would go to fraud. Crime is now easier, faster, and harder to detect.”

He said that young people should be taught ethics and values. “It has nothing to do with religion; it’s about character and ethics,” he said.

The biography

Abagnale had been invited to the conference to tell his life story, and he did so:

“I was born in Bronxville, N.Y. and attended a Catholic school. One day, I was taken out of class and sent to White Plains because my parents were divorcing. I had no idea what was going on or what family court was. When I got there I was told to go up the steps and meet my parents. I found them in a court room. The judge beckoned me forward and he read from a paper. He never acknowledged me. He said I would have to choose a parent to live with. I ran out. My mother didn’t see me for seven years and I never spoke to my father again.”

“I took the New Haven and Hartford Railroad, as it was then called, to New York City. My father had a stationery store here. I got jobs in stationery stores making small amounts of money but I soon realized I couldn’t support myself.”

“I was six feet tall and had a little grey hair. I was 16 years old but decided to lie about my age. I altered my IBM card and changed my birth date from 4/48 to 4/38. I was making more money, but I was still drawing on an account my parents had set up for me. When I needed money, I would write myself a check for $5 or $10. The checks started to bounce.”

“One day at 5 PM I was walking down 42nd Street past the Hotel Commodore, now the Hyatt, and I saw an Eastern Airlines flight crew. I heard a noise above me. It was a New York Airways helicopter landing on the Pan Am building.”

“I decided to call Pan Am. I told them I needed a uniform. They said don’t you have a spare and I said yes, but it’s in San Francisco. They said you know this will come out of your paycheck and I said yes. They said go to the Well Built Uniform Company.”

“A Mr. Rosen fitted a uniform for me. I asked to pay by check and he said no. I asked to pay with cash and he said no. He asked me to fill out a form and my employer would pay and I said that was better.”

“I went to La Guardia because that was the closest airport and tried to figure out how to get on a plane. Finally I got hungry and went to a bar and ordered a sandwich. Two TWA pilots sat down next to me and asked me what equipment I was on. I did not know the jargon. I said, ‘GE,’ which was the wrong answer. They asked me what Pan Am was doing at La Guardia since it only flew out of JFK and I said I was on my way there and left quickly.”

“I learned that as good as it was to have a uniform, it was useless without an airline ID. I looked up ‘Identification’ in the Yellow Pages. I called some places and finally one told me that the airline IDs were made by the 3M company so I called them up to discuss quantity and price for a large order. I asked for a sample but the paper they handed me had ‘SAMPLE’ written across it. I said will we also have to buy this equipment? If so, why don’t you show me how it’s used and for a demonstration, make a card for me.”

“I had a card but it had no logo. I couldn’t type, print, or write on the glossy card. I passed a hobby shop and bought a jet liner model. I threw away the parts and used the sheet of decals. Pan Am says I flew a million miles but I never stepped on board one of their flights and that’s true because I was afraid that someone would ask me why their ID was different than mine. So I flew everyone else.”

“When I got there, I found out where the flight crew stayed and I signed in a binder. Pan Am was billed for my cash and meals. Also, I could cash personal checks at the hotel. I learned that every airline honors each others’ personal checks.”

“At 18, I quit because the FBI took out a John Doe warrant on me. Based on interviews with people, they thought I was 30 years old. I moved to Atlanta Geogia and into the Riverbed Apartments. On the application form, it asked my profession and I nearly wrote ‘airline pilot’ but then it asked about my employer and supervisor. I thought about it and realized I needed a profession that would explain why I had a car and a nice apartment so I said I was a doctor. At the condo, a nosy interviewer asked what kind of doctor I was. I said, ‘medical doctor.’ Eventually, I said ‘pediatrician.’ I thought I was safe because it was an apartment for singles, so there would be no children”

“One day a real pediatrician moved in. He was separated from his wife and lonely. He kept trying to talk to me. I went to Emory University and read the latest medical journals. I was waiting for him every day. I’d follow him into his apartment. ‘Hey, you know what they’re doing up at Mayo?’ If he went to the bathroom, I’d talk through the door. Eventually, he started avoiding me, which is what I wanted.”

“But one day I got a call from the hospital where he worked. They said that they needed to have a full doctor overnight in an administrative capacity. I said I wasn’t licensed to practice in Georgia, but they got me a temporary license. I gave it a shot and no one doubted I was a doctor.”

“I passed the bar in the state of Louisiana and became a lawyer. I studied the law there, which is based on the Napoleonic code, for two months, and passed the bar exam. I was licensed by the state and worked for the Attorney General.”

“I did things nobody had ever done before. I bought a Burroughs 1000 magnetic encoder and put it in a bank and for one day everyone deposited their checks into my account.”

“One day I arrived late at O’Hare airport in Chicago and it was closing. I noticed that everyone — Hertz, Avis, Eastern, Delta — was putting their cash in a night box. I rented a bank guard uniform from a costume store and hung up a sign that said, ‘Box out of order. Leave cash with guard on duty’ and they did! How could a box be out of order? Nobody asked me.”

“But every criminal gets caught. I was arrested in the French town of Montpellier on an Interpol warrant from the Swedish police. I was convicted of forgery. I entered the Maison d’Arret weighing 198 pounds and left weighing 109 pounds. Steven Spielberg told Barbara Walters that he felt it was important for me to go back and see my exact prison cell and that he was shocked to find it was a blanket with a hole in the floor for the bathroom.”

“Then I was extradited to Sweden and served in a penitentiary in Malmo. Then I was arraigned in the U.S. and sentenced to 12 years. I had served four years in Virginia when the U.S. government offered to take me out and into service until my sentence was complete or my parole was served.”

“This February, I celebrated 35 years with the FBI. I’ve been married for 33 years and have three sons.”

“Spielberg said he chose to tell my story not to glorify what I did but because of what I did for my country for over thirty years.”

“I was a child. I did immoral, illegal, and unethical things and they will always be a burden to me. Few men are worthy of being called ‘daddy.’ I needed a father and mother and it’s not popular to say so, but divorce is a devastating thing to deal with. I cried myself to sleep every night until I was 19. I spent Mother’s Day and Father’s Day in foreign countries in hotels. Only a fool would think they could break the law and not get caught. My kids ask my wife why I get up in the middle of the night and go downstairs and sit in front of the TV and don’t turn it on.”

“I have a lot to regret. When I was in jail I was thinking about my dad and how I’d see him again and say I was sorry but one day while I was in jail he slipped on a subway staircase and hit his head and died.”

“I owe everything to this country. This country gives everyone a second chance. I’ve turned down three pardons, including one from the last President.”

“I met my wife while working undercover. I broke protocol and told her who I was. She married me against the wishes of her parents. God gave me a wife and she gave me three kids and she changed my life. Prison didn’t rehabilitate me — she did. Anyone here who’s a parent, you know that the last thing you worry about every night as you head hits the pillow if your kid. The definition of a man — I’d like to say this since it’s just been Father’s Day — is not money, skills, or achievements. A real man loves his wife and is faithful.”

Today

Today, Abagnale has a Web site and has written five books on identity theft. He works for the FBI and also takes speaking engagements.

He gave attendees three pieces of advice on avoiding identify theft.

1) Don’t write a lot of checks. He noted that checks are stored in a data warehouse in the clear and are handled by people making a low hourly wage.

2) He told everyone to buy a shredder and not just any shredder. He said that ribbon shredders produce garbage from which the FBI can reconstruct a bank statement in 60 minutes. He said crisscross shredders produce garbage from which the FBI can reconstruct a bank statement in 8 hours. He said that microcut shredders produce confetti from which the FBI cannot reconstruct the original. Although all are for sale, “what’s to think about,” he asked.

3) He told attendees to use a credit monitoring service that will provide immediate alerts, instead of monthly or quarterly letters and that monitors all three credit services.

“I live my life 99.5 percent risk free,” he said. “I don’t use checks and I don’t use a debit card. I spend the credit card company’s money. If someone runs up a $1,000 bill on my cell phone, I don’t dispute it with AT&T — I dispute it through Visa. In the TJ Maxx case, people who lost debit cards waited 2 months for their money, and people who lost credit card numbers got a new credit card within 10 days.”

“For my kids, I gave them a supplemental credit card attached to my account and the bills came to me. I told them if they were spending a lot of time in a bar, I’d know about it. I paid the bill on time every month and when they graduated from college, they had a credit score of 770 and were able to buy a car and a house,” he said

“I’m not worried about shopping online,” Abagnale said. “I use my credit card. My liability is zero.”

Abagnale said he even uses his credit card instead of a bank card to get cash from an ATM machine.

Companies must do better

“Every company should be asking what it can do to protect the identity of its customers. Why do banks allow tellers to see information like a social security number? They should have to go to a separate screen to request that information. There’s software from companies like IBM and Novell that costs $100,000. Why can’t banks differentiate based on how they protect their customers? There’s no excuse not to have that,” Abagnale said.

“There should be only five instances when you need to use your social security number: to get a driver’s license, to get a loan or open an account at a bank, to put your children in school, to get health care, and to pay taxes,” Abagnale said.

He added that government can do better too, certainly with voting machines. “I like optical reader systems,” he said. “Once you introduce software, you introduce the ability to manipulate it.”

He concluded by saying that most problems are about morals and ethics. “We can build in security, but that won’t solve the issue of the character of the younger generation. Crime is getting worse,” he said. “I was raised Catholic and taught right and wrong. I chose the wrong path but my parents had given me the ropes I needed to pull myself out of that world. We live in a society that doesn’t teach Ethics in school. Many Fortune 500 companies have no code of ethics.”

 

If you are concerned about Identity Theft , want to get some protection, and/or been a victim or know someone who has, please log onto http://www.greatworkplan.com/betterlife4u or call 1-866-510-7907 to get some help.

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