A US prisoner has been accused of orchestrating an $11 million scam from his cell using a hidden… cell phone.
On June 8, 2020, an individual claiming to be billionaire film producer and philanthropist Sidney Kimmel contacted broker Charles Schwab by phone and stated that he had uploaded a transfer form using the service’s secure email service.
The only problem was that the call appeared to be from prison. Still, the caller was referring to a request made earlier that day by his wife to verify the transfer – a role allegedly played by a female co-conspirator.
The person allegedly posing as Kimmel had contacted a Schwab customer service representative three days earlier – on June 5, 2020 – about opening a checking account and was told that identification and a utility bill were required.
On June 6, a co-conspirator reportedly provided a picture of Kimmel’s driver’s license and a Los Angeles water and electric bill.
According to court records [PDF] The documents, filed by US Attorneys in the Northern District of Georgia, consisted of a request for funds to be transferred to an outside bank and a forged authorization letter — both of which appeared to be signed by Kimmel.
On June 9, the brokerage firm, confident that Kimmel had been adequately authenticated, transferred $11 million from Kimmel’s Schwab account to a Zions Bank account for Money Metal Exchange, LLC, an Eagle, Idaho-based seller of gold coins and others precious metals.
The real Kimmel was unaware of the transaction, which resulted in the purchase of 6,106 American Eagle gold coins. The person who orchestrated the fraudulent purchase of the coins reportedly hired a private security firm to transport the coins on a chartered plane from Boise, Idaho to Atlanta, Georgia on June 13, 2020. An employee of the scammer reportedly took possession of the coins three days later.
Meanwhile, suspected mastermind Arthur Lee Cofield Jr. was being held in a maximum-security prison in Butts County, Georgia, according to the government. Cofield is serving a 14-year sentence for armed robbery and faces a charge of attempted murder in Fulton County, Georgia.
Prison phones aren’t just for family
The day after the coins were purchased, prison staff reportedly searched Cofield’s cell and found a blue Samsung cell phone hidden under his arm. The prison’s forensic unit apparently determined that Cofield had used an account with the free voice and messaging service TextNow and matched the phone number with calls to the Money Metals Exchange.
On December 8, 2020, a federal grand jury indicted Cofield and two co-conspirators on conspiracy to commit bank fraud and money laundering. Cofield’s attorney, Steven Sadow, then attempted to suppress the cellphone evidence on Fourth Amendment grounds, arguing that the lawful search of the device by prison officials was unrelated to the legitimate function of prison security and maintenance. The government said otherwise, insisting Cofield had no authority to challenge the search because it had no “legitimate expectation of privacy in relation to the contents of a contraband cell phone”.
The judge in charge sided with the government [PDF] and certified the case to go to court. “Neither the Supreme Court nor Eleventh Circuit precedent recognizes an inmate’s expectation of privacy with respect to contraband belonging to him while incarcerated,” the judge wrote in her recommendation.
Sadow did not immediately respond to a request for comment.
The registry Charles Schwab asked if any changes had been made to his customer authentication procedures as a result of Kimmel’s impersonation.
“We want our customers to have the highest level of confidence when doing business with us,” a spokesman for Charles Schwab replied in an email. “Our Security Guarantee promises that Schwab will cover 100 percent of losses on any Schwab account due to unauthorized activity and in this case we have indemnified the customer and made their account full.”
“As soon as Schwab became aware of any suspected fraudulent activity, we began an investigation, took steps to protect the customer’s account, and notified the authorities. As you know, this is an ongoing investigation and we cannot comment further. ” ®
https://www.theregister.com/2022/10/13/prison_11m_schwab_fraud/ Prison inmate charged with $11 million cellphone fraud • The Register