In fall 2020, 43-year-old Adam Arena and a dozen suspected co-conspirators were indicted in New York on charges of trying to swindle banks out of more than $1 million through a scheme known as “synthetic identity fraud.”
They combined real Social Security numbers with mismatched or phony names to create new identities, according to investigators. Prosecutors began the investigation in 2018 and charged them with 108 counts of illegal financial activity, mostly borrowing huge amounts of money they never intended to pay back, according to investigators.
The scheme was so fruitful that in May 2020, according to prosecutors, Arena apparently did it again.
This time, investigators say, the Arena and a partner used synthetic identities to bilk the federal government out of nearly $1 million from the Paycheck Protection Program, designed to help people who had lost their businesses or employment due to the pandemic. The duo used a fake ID to get a $954,000 loan and spent it on two vehicles, spa services, clothing, restaurant meals and gym memberships, according to prosecutors.
In the first fraud case, Arena pleaded guilty and was sentenced to four to 12 years in prison. Arena also pleaded guilty to the Paycheck Protection Program fraud and is awaiting sentencing.
Synthetic identity fraud schemes have proliferated in the past few years, becoming the largest form of identity theft in the nation, according to the financial company FiVerity, which in a report last…
