The unassuming 24-year-old in glasses and a chinstrap beard made possible what cash-strapped customers thought was out of reach — new cars, jewelry and fresh lines of credit.
Operating out of a small outfit in Baton Rouge called Best Inc., authorities say Donald Lonnell Batiste peddled so-called credit repair services, promising legal ways to secure loans for people desperate to start a new financial life. His strategy worked by selling unwitting clients new identity numbers that were actually stolen Social Security numbers, fueling the $5 million in loans and merchandise his customers accessed from 2013 to 2015, the Louisiana Attorney General’s Office said.
But his victims, as law enforcement agents tell it, were not just the people who paid for what turned out to be fraudulent financial services. They’re also the hundreds of people on the other side of Batiste’s alleged scam — the legitimate owners of Social Security numbers who may still have no idea parts of their identities have been stolen and sold.
As with the most recent arrest in the case this week, authorities are looking more closely at a growing type of white collar crime called synthetic identity fraud. The Batiste case is the first major case of this kind worked by the state’s Attorney General’s office, according to its lead prosecutor David Caldwell, head of the public corruption and special prosecutions unit.
Jessica Clements-Batiste, the 26-year-old ex-wife of Batiste and an apparent self-styled religious “prophetess” who teaches financial literacy, was arrested and accused on Tuesday of racketeering and forgery in the case. Brenda Milson Taylor, 64, was arrested in late September on racketeering counts, days after Batiste was booked into jail on similar counts.
Batiste and Clements-Batiste, through their attorneys, declined to comment. Taylor said she did not want to speak without consulting her lawyer, who didn’t reply to queries. All have been released from jail on bail.
“This type of fraud is one of the newer ways of stealing identities, and it’s becoming more prevalent,” said Caldwell. “It’s the way at least some of the identity theft is evolving.”
Unlike the traditional notion of identity theft in which a scammer impersonates a real person, appropriating a name, birthday and Social Security number, for example, synthetic identity fraudsters can create entirely new personas using a mixture of legitimate and fake information, said Steven Toporoff, an attorney at the Federal Trade Commission.
In Batiste’s case, the arrangement appeared to rely on real identity information — albeit from different people, the attorney general’s office said. Clients paid for what some fraudsters call a Credit Profile Number, or CPN, which Batiste said is an alternative to a Social Security number, officials said. In reality, the CPNs are stolen Social Security numbers from actual people, many of whom are children, the agency said.
The numbers could have been culled from a massive data breach at a major company such as a health insurance firm, said Eva Velasquez, head of the Identity Theft Resource Center, a nonprofit dedicated to helping identity-theft victims.
When credit agencies check applicants’ Social Security numbers, they don’t verify the number is official with the Social Security Administration, Toporoff said. Instead, the companies use the identifiers to see if they match an existing profile of someone with a credit line. If the numbers don’t correspond to anyone, automated systems may think they’re encountering someone new, the way a young adult getting a first credit card would register as new, he said.
“It’s not like there’s a database out there of Social Security numbers that the credit reporting agencies could ping against. It doesn’t exist, and we probably wouldn’t want that to exist,” he said. Still, some systems can recognize if a number seems entirely made up, which is why thieves prefer to use real Social Security numbers, he said.
Data breaches at large retailers caused 4 million people to be notified their Social Security numbers were stolen in 2014, up from 3 million the previous year, according to a report by Javelin, an independent consumer research firm.
But hard numbers on how many cases of synthetic identity fraud there are each year are difficult to determine, Toporoff said.
“It’s very hard to spot instances of synthetic identity theft,” he said.
Consumers should regularly monitor not only their financial statements, but also medical and tax-related documents, said Velasquez.
“Don’t be fooled into a false sense of security, because your identity has value far above and beyond your financial account,” she said. Even people whose financial identities are in order could be exploited in the health care, tax and criminal realms, she said. One example is a thief using a stolen identity to pose as another person to authorities after being arrested for a crime, which could result in an innocent person discovering they have a criminal record in their name, she said.
Batiste purchased Social Security numbers from an online supplier for around $75 each and sold them for $130 to $500, authorities said. He also worked with at least 13 professional forgers to fabricate fake Social Security cards, bank statements and other documents, according to the attorney general’s office. Clements-Batiste, of Texas, was involved in coordinating forgers and obtained an auto loan for an H3 Hummer, agents said. She also charged up-front fees for lines of credit that never materialized, according to authorities.
Taylor, of Carencro, secured fraudulent loans for a Ford Flex and a Mercedes-Benz through her work with forgers in Batiste’s operation, in addition to a $250 million loan she said was to be used by her church, the attorney general’s office said.
If convicted, the three each face up to 75 years in prison. Caldwell said. The case is still being investigated.
Follow Maya Lau on Twitter, @mayalau.