The Rich are Different—and Identity Thieves Know It

Wealthy individuals are at high risk for identity fraud, even from their own employees. Taking steps to prevent theft in the first place is the best defense.

Thursday, January 19, 2012

Over the past five months, the Occupy Wall Street protesters have made political targets of the wealthiest 1 percent of Americans. Now it seems the economic discontent behind the movement is turning top earners into prime targets for a different, more nefarious group: identity thieves.

The risks that come with exceptional wealth are certainly not new. A high net worth means bigger returns to thieves. There’s more cash in the bank to plunder, and credit cards come with high limits or, in some instances, no limits at all.

But this latest trend in identity theft crimes may be a function of the times: Financial desperation or class animosity, or both, might be leading people to take advantage wherever the affluent can be found.

Consider the case of the steakhouse waiters.

In December, more than two dozen waiters and their associates—many of whom hailed from top New York restaurants such as Smith & Wollensky, Capital Grille and Wolfgang’s Steakhouse—were arrested for running an alleged identity theft ring. As described by prosecutors, the waiters stole information from customers’ credit cards (in particular, those who paid with American Express Black and other high-limit cards). They then passed the data to the ring’s leaders, who made new cards and used them to go on shopping sprees at stores including Chanel, Hermes and Cartier.

Other schemes have seen perpetrators gather personal data by digging into wealthy patients’ health records and photocopying donor checks from prominent philanthropists. A crafty threesome stole clientele books—and the personal and credit card information contained therein—from high-end stores like Neiman Marcus, Saks Fifth Avenue and Bloomingdale’s.

Problems can also strike closer to home. Employees of the affluent sometimes use their proximity and insider knowledge to commit identity theft crimes, counting on established trust to forestall scrutiny.

Such was the case with successful self-help author Melody Beattie. During the 2011 tax season, Beattie’s accountant noticed missing bank statements and unaccounted-for checks. The irregularities were soon traced to Beattie’s personal assistant, who, over a period of years, allegedly diverted more than $400,000 of the author’s assets for her own benefit using—among other methods—forged checks.

As with the steakhouse waiters, it’s not always possible to control who has access to your information. But when it comes to the people in your employ, consider the following tips to protect yourself.

  • Do a thorough background check of potential employees. 
  • Develop a system of checks and balances for employees with access to business and/or personal information.
  • Personally conduct regular employee audits. Doing so will help you catch problems early. What starts as a relatively small transgression can snowball as people realize they can get away with something.
  • Trust in your employees is fine. Blind trust is not. Even the most honest person can turn in the face of life-altering circumstances. Act as a large corporation would and enact clear and consistent policies for monitoring employee actions.

Unfortunately, a high net worth also means a higher risk of identity theft—and a lot more to lose. No one is immune to identity theft, but preparing yourself before it happens is the best defense.

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