San Antonio Express-News
A former White House chief of staff and a former chairman of the Joint Chiefs of Staff were among the victims of an international identity theft scheme that officials said was the largest ever to target military members and veterans and their families.
John Kelly, who served in the Trump White House, and Gen. Martin Dempsey, who held the military’s top post in the Obama years, had their personal info captured by members of an international ring.
The scheme targeted more than 3,300 active military members and veterans, extracting more than $1.5 million from them. Not all 3,300 victims had money stolen, according to the Justice Department.
Word that the 3,300 whose information was compromised by the breach included Kelly and Dempsey became public Thursday as a member of the ring was sentenced for his role.
Fredrick Brown, 39, was a civilian employee of an Army medical brigade when he stole identifying information from Defense Department computers and distributed it to four co-defendants. They used it to access the victims’ veteran-benefits, bank and mortgage accounts — wiping some of them out completely.
Brown was sentenced to 151 months in federal prison. Chief U.S. District Judge Orlando Garcia also ordered Brown to pay $2.3 million in restitution — the total that prosecutors claimed the ring tried to steal.
Many of the accounts were at USAA and Randolph-Brooks Federal Credit Union, both based in San Antonio, records show.
Brown, of Las Vegas, pleaded guilty in late 2019 to wire fraud conspiracy and money laundering conspiracy, just two months after he and the four others were charged in San Antonio.
“I just want to apologize to the victims and the families,” Brown told Garcia on Thursday.
Neither Kelly nor Dempsey could be reached for comment Thursday, though both were alarmed by the breach.
Members of the ring rented hotel rooms in the Philippines using the name of Kelly or his namesake son, said Justice Department Trial Lawyer Ehren Reynolds.
Someone from the ring also posed as Dempsey over the phone to try to transfer money out of one of his accounts, according to a memorandum of the investigation by the Defense Criminal Investigative Service, the Pentagon’s criminal investigations arm.
Between July 2014 and September 2015, Brown took screenshots while he worked as a civilian records administrator with the Army’s 65th Medical Brigade at Yongsan Garrison, South Korea, according to his plea deal.
“But for this defendant’s conduct, none of this could have happened,” Reynolds told the judge.
The information included Social Security numbers, Defense Department identification numbers, dates of birth, and contact information of veterans, their relatives and others who have some affiliation with the military, including civilian employees.
Brown sent the information to co-defendant Robert Wayne Boling Jr., 38, an American living in the Philippines, knowing that Boling and other co-defendants would pose falsely as the victims to wipe out their bank accounts or divert their benefits to accounts set up by the fraud ring. They recruited “money mules” — people in the U.S. who allowed the ring to use their bank accounts for the fraud, records show.
The ring victimized active-duty members and veterans and their families. The ring also often targeted those with higher disability ratings because the perpetrators figured they received bigger amounts from their disability, resulting in bigger payouts for the ring members, according to Reynolds.
The memo from the Defense Criminal Investigative Service said the ring tried to take Dempsey’s money in the early months of 2015.
Impersonating Dempsey by phone, a member of the conspiracy was able to use information Brown stole, as well as information from Dempsey’s credit report, to bypass security measures and to take control of his bank account. In several successive calls, the individual attempted to establish a wire transfer of funds from the account to a recipient in the Philippines.
But corporate security from the bank caught the fraud before the wire could be successfully executed. The bank, which is not specified, was able to link the caller to about 200 other similar attempts to take control of bank accounts of military-affiliated individuals, the memo said.
” Gen. Dempsey informed me that while he did not ultimately lose money from the scheme, he was troubled to learn that identity thieves had access to his PII and were able to exploit it in this manner,” DCIS agent Shonn Dyer-Jones wrote in the memo. “As a consequence of these events, Gen. Dempsey relayed that he was forced to engage with multiple financial institutions to change passwords and establish other heightened security measures on his accounts.”
The ring also scammed Kelly, in summer 2017, when he was transitioning from homeland security secretary to begin his stint as Trump’s chief of staff, the memo said.
In June that year, the ring compromised Kelly’s account in a Defense Department self-service log-on portal that gives individuals affiliated with the Defense Department or the Veterans Affairs Department access to several military-focused websites using a single username and password.
And in August 2017, members of the conspiracy used Kelly’s information to apply online for a Military Star credit card, a special credit card for military members. Over the course of the next month, the Military Star credit card was used to make reservations at several hotels in Manila, Philippines, in Kelly’s name and in his wife’s name, the memo said.
Kelly told Pentagon investigators that he received a Military Star billing statement showing charges from International Cruise & Excursion, a travel service for military members that arranges hotel-related bookings.
” Gen. Kelly indicated that when he received the statement, he did not have a Military Star card, and had never used services from ICE,” Dyer-Jones wrote. ” Gen. Kelly indicated that he believed the charges had been incurred by his son (also named John Kelly), who was deployed at the time, and Gen. Kelly paid the charges. However, upon conferring with his son, Gen. Kelly determined that the charges were completely unauthorized by Gen. Kelly or anyone in Gen. Kelly’s family.”
Reynolds also highlighted a digital communications exchange between Boling and Brown. In it, Boling allegedly complained to Brown about Veterans Day because the banks were closed during the holiday and Boling and his minions could not run scams that day.
Brown’s lawyer, Michael Gross, said Brown was struggling with opioids and alcohol at the time. Gross said Brown also reimbursed victims with $30,000.
Gross argued that Brown was less culpable than his co-defendants, had less control in the stealing and distribution of money, and received less than the others.
“The only thing Mr. Brown did was get the (personal identifying information),” Gross said, arguing that he should get a sentence comparable to the only other defendant sentenced so far.
Besides Brown, Trorice Crawford, 34, of San Diego, was sentenced in summer 2020 to 46 months in federal prison and was ordered to pay $103,700 in restitution.
Boling and Australian citizen Allan Robert Kerr, 30, and South Korean citizen Jongmin Seok, 44, were arrested in August 2019 in the Philippines or South Korea and are awaiting extradition.
Reynolds said the Pentagon has implemented “significant security enhancements” to prevent further breaches.
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