Feds uncover 'bust out' scam that cost banks $80m

Federal authorities have uncovered an elaborate organized crime ring they say recruited some 700 immigrants from the former Soviet Union to defraud banks and other creditors of more than $80m. According to documents filed in US District Court in Denver, the organizers hired the immigrants to be pawns in what's known as a "bust out" scheme, in which the identity and credit line of a business are used to get loans by an otherwise non-creditworthy borrower who has no intention of repaying. Federal authorities in Denver identified 16 so-called "straw buyers," at least two of whom were taken into custody last week. In all, they said some 700 people participated in the scheme, which cost creditors $80m Posted in: Credit Card Fraud