Internet Changes Everything

Computer geeks funded champagne lifestyle with £6.5m fraud

Britain, UK news from The Times and The Sunday Times - Times Online

By Jack Malvern
A CRIMINAL network that stretched from hackers in America to former KGB agents in Russia has collapsed after police discovered that its masterminds were a pair of computer geeks in Leeds and Glasgow.

Douglas Havard and Lee Elwood, who controlled a £6.5 million credit card scam, are now in prison after being the first people in Britain to be convicted of committing fraud by using credit-card numbers distributed over the internet.

Havard, 24, and Elwood, 25, may have appeared to be scruffily dressed website designers who had done well enough to buy an expensive car each. Yet they were members of two now defunct discussion websites on which advice was exchanged on how to obtain “data dumps” of stolen credit-card numbers and use them to create copies of cards. Other members included American counterfeiters who supplied blank cards and machines for writing stolen data on to them.

Russian scammers conned credit-card owners into handing over their details by sending e-mails purporting to be from banks and credit companies — a technique known as “phishing”. The e-mails would tell customers that they had been charged in error for a transaction or that their details needed to be updated and direct recipients to websites that mimicked genuine banking services.

The Russians would then give this information to Havard and Elwood in return for 60 per cent of any cash they made from counterfeiting cards.

Havard would locate blank credit cards and download the stolen data. Credit-card owners around the world found themselves presented with bills for thousands of pounds of cash withdrawals and purchases that they had not made.

Havard and Elwood “were living quite a nice lifestyle” the National Hi-Tech Crime Unit, the British agency that caught them, told The Times. “They would drink champagne in clubs and drive around in their Mercedes.”

A neighbour of Havard in Leeds who did not wish to be named said that although the American wore jeans and a T-shirt he had had expensive designer clothes in his flat. He “drove a big Mercedes Benz and his partner in crime was driving a Mercedes sports car.”

Havard, the son of a millionaire entrepreneur from Dallas, is said to have begun his criminal career as a teenager.In 2001, according to court reports, he was arrested for alleged aggravated assault when he visited a drug dealer’s house. A year later he was arrested again and accused of selling a date-rape drug to an undercover detective. His rich family could easily afford his bail, and Havard fled to Belize, and later Britain, before he could face the charges in court.

Last week at Leeds Crown Court he was jailed for six years after pleading guilty to conspiracy to defraud and conspiracy to launder money. The US authorities have begun extradition procedures.

Elwood, who ran the Glasgow connection of the business, was sentenced to four years after also pleading guilty.

July 4, 2005 at 12:41 PM in Phishing & identity theft | Permalink | TrackBack (1) | Top of page | Blog Home