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August 5th, 2008

Countrywide Financial Insider Steals And Sells Thousands Of Private Customer Records

The FBI on Friday arrested a former Countrywide Financial Corp. employee and another man in an alleged scheme to steal and sell sensitive personal information, including Social Security numbers, of as many as 2 million mortgage applicants. The breach in security, which occurred over a two-year period though July. Countrywide detected the breach and alerted federal authorities, according to Suzy Martin, a spokeswoman for the company.

The insider was identified as Rene L. Rebollo Jr., 36, who had worked as a senior financial analyst at Full Spectrum Lending, Countrywide’s subprime lending division. He was arrested at his home in Pasadena and charged with unauthorized access to a financial institution’s computers. Authorities also arrested Wahid Siddiqi, 25, at his home in Thousand Oaks. Authorities alleged that he was a reseller of Countrywide data.

Rebollo appeared in court Friday afternoon and was released on $80,000 bond. Siddiqi was being held on a fraud charge pending a court appearance Monday. The FBI said Rebollo had voluntarily described the scheme. Rebollo said he would charge $400 or $500 for batches of thousands of “leads” — personal and account information that presumably would help outside loan agents solicit new mortgages from the Countrywide applicants, some of whom had been denied loans by the Calabasas company.

Prosecutors suspect the data was eventually sold to companies that would then try to make other loans to the Countrywide customers, said Thom Mrozek, a spokesman for the U.S. attorney’s office. Authorities said they didn’t know whether any of the information had been used for outright fraud, such as identity theft.

Rebollo would copy information on about 20,000 customers at a time on Sunday nights by using a Full Spectrum computer that did not have the same security features that other machines in the office had, according to the affidavit by FBI Special Agent Richard P. Ryan. At that rate, the U.S. attorney’s office said, Rebollo would have compromised up to 2 million customer profiles for about 2.5 cents each — an astonishingly small amount considering the importance of the material.

Mortgage leads are among the most expensive for sale because of the potential payoffs to intermediaries when loans are made. Social Security numbers alone generally fetch dollars, not pennies, since they can be used to open new bank accounts.

A criminal complaint against Rebollo said that he earned about $65,000 a year at Countrywide and had opened a personal bank account for holding what he estimated to be up to $70,000 in proceeds from Countrywide data sales.

The complaint said Siddiqi sold computer discs containing data on Countrywide customers to a witness working for the FBI, taking in $4,000 for about 38,000 customer profiles.

Countrywide spokeswoman Susan Martin said 19,000 customers had so far been identified as having their identities compromised.

Victims were being contacted by mail and would be offered free credit monitoring services for two years. Countrywide Communications Vice President Susan Martin said affected customers would be notified by mail. A special hotline was set up at (800) 669-6607.

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    4 Responses to “Countrywide Financial Insider Steals And Sells Thousands Of Private Customer Records”

    1. We had our information compromised. Emotionally we are so devastated, but who knows what the full ramifications will be financially. I believe the company should be held accountable, and the penalties for the perpetrators should be extremely steep. This may end up affecting my family indefinitely, depending on who had eventually gotten ahold of all our sensitive data. The penalties should reflect the massive damage they have done to untold millions of families.

    2. Frank Schwenk Says:
      September 11th, 2008 at 6:39 pm

      I agree with everything the last comment stated. All involved should be compensated and the perps should be hung out to dry for all to see. I’m surprised the national newsnetworks on onto this…

    3. Interesting that this article appeared August 5th, and yet it looks like no one (including us) received notification by mail until yesterday, September 11th.

      More evidence, if we needed it, that the laws on this need to be updated – in particular, that use of a social security number by someone who appears to not be the legitimate holder of that number needs to be reported. Currently, it doesn’t.

    4. I too was affected by this and received a letter from Countrywide several days ago. Just 3 days after receiving this letter one of bank accounts has some illegal debits. I now have since shut down that account and had to open another one. My financial institution as well as the Attorney General’s Office have been notified to see if there is any correlation. I wish everyone the best with their personal situation and I would advise to place a security block on your accounts or a Fraud alert on your credit bureaus like I have.

      Sine Pari

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