CFOSnafu.com » Scooby-Doo hijacks 50K from companies

Scooby-Doo hijacks 50K from companies

June 5, 2008 by Shane Borer
Posted in: "Seemed like a good idea at the time", "Would you want this person in Finance?", Fighting off fraud, Special report, Tech failure

And he would have gotten away with it, too, if it weren’t for those meddling Secret Service agents.

Michael Largent, of Plumas Lake, CA, was recently indicted for siphoning $50,000 from E*TRADE and Schwab.com over the course of a few months.

Was he falsifying business expenses? Using his financial know-how to bypass controls and cheat the system?

Nope. He got the money by watching cartoons.

The online brokerage houses have a common procedure for new member sign-ups: Users link brokerage accounts to their personal bank accounts, and the companies make a small deposit — between a few pennies and one dollar — into the account.

After users verify the amount of the micro-deposits, their account is fully activated, and money can be moved in and out.

Largent exploited a loophole in this common system and used an automated script to open 58,000 online brokerage accounts. Each was linked to one of five bank accounts, and he withdrew the micro-deposits once they were sent.

Of course, each of the fake accounts required a name, address and Social Security number — that’s where Largent let his creative side shine. He favored cartoon and comic books character names: Mr. Scooby Doo, Mr. Speed Racer and Mr. Johnny Blaze were among the names on the brokerage accounts.

Our favorites: Hank Hill and Rusty Shackelford. Hank Hill is the name of the patriarch on King of the Hill, but Rusty Shackelford is much more devious. That’s the alias used by the paranoid exterminator Dale Gribble of the same show. That’s right, Largent used a cartoon character’s alias as an alias.

Eventually, Secret Service agents noticed more than 5,000 online accounts had been opened with falsified information at Schwab.com in January, 2008. After investigating, agents found 11,385 accounts linked to the same 5 IP addresses — all traced back to Largent’s Internet provider.

After seizing his computer equipment, agents also discovered Largent had tried the same scheme with Google’s Checkout service, filching $88,225.29 from Bancorp Bank.

When asked about his actions, Largent said he’d read the terms and conditions on the companies’ Web sites, but none of them prohibited multiple e-mail addresses or accounts.

And in case you’re wondering where the digital thief learned his skills, a reliable source — Mr. Bullwinkle J. Moose — has informed us he’s a recent alumnus of Wassamatta University.

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