IE 11 is not supported. For an optimal experience visit our site on another browser.

The great ID theft diamond heist

Part 2: ()

When Jackson found his way back out on the street in 1999, much had changed. The Internet made his research easier than ever. Jackson was surfing the Net one day in late December when he decided to browse the New York Times obituaries. Only the kind of people Jackson served at the Memphis University Club have their obits published in the Times, Jackson noted, so the section proved to be fertile ground for potential victims. There he learned about the death of Gordon Teter, CEO of Wendy’s. The obit listed Teter’s age, hometown, and the name of the funeral home taking care of the arrangements. The obituary in Teter’s Dublin, Ohio, hometown paper provided more details. Then, back to his old tricks, Jackson called the funeral home, posing as an insurance company representative who needed to verify Teter’s personal information. Without it, he threatened, the funeral home might not be paid. At this point, Jackson didn’t even know what company held Teter’s policy, but he didn’t need to. The only verification the funeral home employee insisted on was a “yes” answer to the question, “Do you work for Mr. Teter’s insurance company?” The operator then gave him Teter’s Social Security number, date of birth, and home address. “I knew it would only be a matter of time before I would actually be impersonating Mr. Teter,” Jackson said. “And that there would be one good advantage of stealing the identity of a dead person. They wouldn’t feel it; it’s not like they could come back to life and call in their accounts as a fraud. I knew this was the perfect caper to pull off.”

Now, Jackson simply had to find Teter’s money. Years of experience had taught him that executives often have personal bank accounts in the same bank as their company’s corporate accounts. So he called Wendy’s corporate offices, pretending to be an entrepreneur who was in the process of opening a new franchise. Jackson said he was concerned that he might have bounced a check sent to Wendy’s. The operator shared the name of the bank, Fifth Third Bank, in Dublin. The next day he called the bank and talked to a female operator, asking to check the available balance on Teter’s account. The operator asked for his account number; he didn’t have one. But he had Teter’s birthday, home address, ZIP code, and Social Security number. And that was enough. “Which account are you referring to?” he recalls her asking. “Which ones do you show?” he replied. In a moment, she was voluntarily revealing Teter’s checking account numbers and credit card account numbers. In fact, she told Jackson so fast he didn’t even have pen and paper ready the first time. She repeated the numbers more slowly on request. The checking account had a balance of more than $300,000.

Stealing someone’s private information is often as easy as asking for it. Customer service telephone employees have always been the best source for professional identity thieves. Early on, Jackson learned how to read customer service representatives by ear. Not every one is naïve. The more experienced and middle-aged the operator, the more likely the scam will fail, he says. At that point, a con artist who spots trouble must delicately hang up. “An account can easily go from gold to dirt” if any suspicion is raised, he says. But if the voice on the other end is “eager to help and youthful sounding, bingo.” And the more money in the account, the less likely the ID thief will be hassled. After all, no one wants to be fired for giving the bank’s best customer a hard time.  “Let’s make Mr. Teter happy. Customers first. Actually, it’s Mr. Imposter first.”

Like a kid in a candy store, Jackson set out to cash in on Teter’s $300,000 account. A week earlier, he had seen magazine advertisements for and, two online diamond stores. He’d ripped the ads out of the magazine and shoved them into his wallet. Now, he took out the crumpled papers and looked jealously at the Rolex watch in the ad. After settling on an initial purchase, he called and got the right account information to wire money to the web site. He called back First Third Bank, posing as Teter, and said he wanted to make a wire transfer. The operator who answered said he’d have to come into the bank branch personally to sign the papers. “Fine, I’ll be in shortly,” he answered, not to raise suspicion. Of course, he couldn’t—he was hundreds of miles away from Dublin, Ohio, in Memphis, Tennessee. But distances have no impact on identity thieves.

He just hung up, called back, and got a young woman named Mary with a pleasant-sounding Irish voice on the line. He honed his story a little bit, this time saying he was in an important business meeting in Beverly Hills and needed cash quickly to buy stocks, so he couldn’t come into the bank. Mary complied. She said she could wire up to $100,000 for him, as long as he provided a call-back number that could be used to verify his identity. So he asked her to wire $96,000 to’s accounts. Then he gave her a voice mailbox he had used before, which was based in Milwaukee, Wisconsin, set up with a stolen credit card. He hung up and quickly changed the voice message to say, “You’ve reached the offices of Gordon Teter. I’m sorry, I’m unavailable.” Within a day, just in time for Christmas, the bank wired the money.

Diamonds and hotel rooms
The only obstacle left was receiving the diamonds, and for this, Jackson also had a plan. He made a reservation at a local hotel in Teter’s name and had the diamonds shipped there. The hotel clerk would accept the delivery because Teter was supposed to be a guest. Then Jackson or an accomplice would pick up the diamonds. When asked to provide positive identifi- cation, that was no hurdle. Jackson had been dealing in fake driver’s licenses for years. When he was arrested back in 1991, he was found with 2,000 fake Tennessee licenses and another 2,000 fake New Mexico licenses. In fact, well before Internet sites and laser printers made creation of imitation licenses easy, Jackson had done it the hard way, once buying a Polaroid license printer for $3,000 right from the manufacturer.

His diamond scam worked like a charm. He picked up the rocks from the hotel without a hitch, and now, he thought he had finally hit on the perfect crime. In quick succession, he ordered another $200,000 in diamonds during the next two weeks, draining Teter’s account, which was “paying off like a slot machine in Vegas.” He was rich again. But not rich enough, so he had to keep going. Before he was done, $750,000 in diamonds and expensive watches made their way to Memphis through a complicated network of hotel rooms, delivery services, and identity frauds. During those heady eight weeks, Jackson started stealing money from two other recently deceased New York Times notables, James Klinenberg, former administrator of Cedars-Sinai Medical Hospital in Los Angeles, and Nackey Loeb, a newspaper publisher. Loeb, he picked on because she had been critical of then-President Bill Clinton on the editorial pages of her newspapers. Clinton had enamored himself to Jackson when he played Elvis tunes on his saxophone as a guest on the Arsenio Hall show. “Those insulting comments really made me pissed,” Jackson writes in his personal memoir. “So my reasons for Nackey Loeb becoming a victim of mine, very easily and well explained. He also ordered diamonds in the name of John Alm, CEO of Coca Cola, Richard Fuld, head of Lehman Brothers, and John Bollenback, CEO of Hilton Hotels.

In some cases, he simply ordered their personal data from information brokers on the Internet, a kind of digital-age private investigator service that sells Social Security numbers and other private information to the highest bidder. With each order, there were mild variations, as the scheme became more intricate. He faced few hurdles in cracking security systems and impersonating the rich and famous. Some dealers received counterfeit checks drawn on stolen accounts. Others agreed to simple credit card transactions. When he bought $40,000 in diamonds from Blue Nile, he charged them on Alm’s and Fuld’s American Express cards.

Knowing that most merchants perform address verification to stop fraud on high-ticket items— they only ship purchases when the billing address on the credit card and shipping address match—Jackson planned ahead. He called American Express and had Alm’s billing address changed to the address of a hotel in Orlando, Florida. He had the diamonds shipped there and then forwarded to Holiday Inn Express in Southaven, Mississippi, just over the border from Tennessee. He had no trouble impersonating his victims, even Loeb, who was a woman.

'He was charming'
Merchants often don’t even check to see if the name being used to make an order matches the name on the credit card, Jackson said. As long as the account was valid, and the billing address was right, the orders would go through. So on some cases, to expedite matters, he said he was a doctor, to win added respect. Here’s my phone number, but don’t call me back, I’m busy with patients, he told one merchant. “He called himself Dr. Teter,” Shane Coley, owner of Time & Time Again in Boston, told USA Today after the crime. Time & Time Again shipped Jackson a Rolex watch after receiving money wired from Teter’s bank. “He was charming. He even haggled a little bit. After we shipped him the first one, he called to say the watch was excellent. ‘I love it,’ he told me. ‘I just finished up with a patient, and the receptionist told me your package arrived. When I’m in Boston in the spring, I’ll come up to see you.’”

But already, the end of Jackson’s two-month shopping spree was near. So was his brief taste of freedom. Manhattan’s diamond district is a tight-knit community, and people talk about hundreds of thousands of dollars in disappearing jewels. While the diamond packages were delivered to hotels around the country, they all ended up in Memphis or nearby Mississippi towns. Several merchants plotted the delivery points on the Internet and realized the shipments were all headed to the same area, and probably the same person. And while the orders were placed in different names, many merchants had been given the same voice mail number. FBI Agent Maureen Dougherty in New York began to connect the dots. The takedown was easy. In fact, Dougherty thinks Jackson probably wanted to be caught, because he kept going even after he sensed authorities closing in, frittering away his chance to get away with the diamonds and his freedom.

At the FBI, such sting operations are called controlled deliveries, and Dougherty had New York diamond dealers lining up to volunteer for the job. She got Diamond Cutters of Western New York to accept a wire transfer for diamonds and send an empty box to a “Dr. Redding” at Red Roof Inn in West Memphis in early February 2000. When no one picked it up, the box was returned to the local FedEx drop-off point, where Jackson and his accomplice planned to pick it up. But when the FedEx employee left the front desk to alert the FBI that the suspect had arrived, Jackson fled, sensing something was wrong.

Still, he couldn’t stop himself; he was convinced his plot could still work. On February 14, he placed a modest $9,000 order at American Diamond Wholesalers in Nackey Loeb’s name, asking that the package be sent to Teaneck, New Jersey, just a few miles from Manhattan. A messenger arrived to pick up the package with instructions to forward it via FedEx to a Holiday Inn Express in Cordova, Tennessee. On February 25, Jackson walked into that hotel to pick up the package. FBI agents were there to arrest him when he walked out.

After spending 15 years pretending to be America’s corporate elite, once the owner of a fleet of luxury cars and a small hoard of diamonds, Jackson found himself declared an “indigent defendant.” He had no money. His own bank accounts were virtually empty. Tall, soft-spoken Robert Dunn was appointed his defense attorney.

The evidence against Jackson was overwhelming, and so was the recidivism. A long jail term was a certainty. All Dunn could hope for was to minimize the damage, and he wanted to. “James is a very nice man, very personable. This is a problem he has,” Dunn said. The only strategy left was for Jackson to throw himself on the mercy of the court, and hope his contrition blunted the judge’s outrage. Stealing from a recently deceased man’s family is hardly the best way to invite mercy. He would plead guilty to all 29 felonies he was facing.

Lights up like a Christmas tree
Dunn hardly knew what to expect at Jackson’s plea hearing— he was well aware of his client’s penchant for doing the unexpected. A few weeks earlier, while struggling to find some way to mitigate Jackson’s guilt and reduce his potential jail time, Dunn sent his client to one of the top psychologists in New York. There’s obvious compulsion here, Dunn thought, and maybe even multiple personality disorder. A standard battery of tests should determine that. But before Jackson arrived in the doctor’s office, the con man had already written a lengthy psychological evaluation of himself. Gambling was the problem, Jackson’s missive revealed. And after a brief consultation, the psychologist agreed. He sent word to Dunn that a report was on its way that might help his client’s case. The psychologist submitted a report to the court suggesting that compulsive gambling was in part to blame for Jackson’s behavior. Jackson had conned one of New York’s best psychologists.

Never in his 15-year history in and out of the court system had Jackson mentioned gambling; it was an entirely unbelievable story, and in fact, Jackson now admits, was a fraud. At any rate, even if it were true, that wouldn’t have been a mitigating factor, wouldn’t have landed him a shorter jail term. But Jackson had convinced himself that compulsive gambling would earn him sympathy from the judge, so he played that last card. And lost. “He out conned his God-damn self,” Dunn said.

“Mr. Dunn, leave him alone,” Judge Deborah Batts barked during the plea hearing. “I am actually trying to understand what is happening here.”11 Like any defense attorney, Dunn wanted his client to say as little as possible while offering his guilty plea. But it was too late. James Rinaldo Jackson was in the zone, in his element, bragging about his journey through the financial system, his time pretending to be some of America’s most famous and wealthiest people. A tug on Jackson’s arm went unnoticed. “I am sorry for the interruption by your counsel, Mr. Jackson. Just proceed,” the judge said.

There was an elaborate chart in the courtroom, explaining the 29 felonies and the complex net of financial crimes listed in Jackson’s indictment. But the judge wanted more; she wanted a true confession, not just a guilty plea. “Just forget the chart,” she said. “Just talk to me. Tell me what you did, how it got started, what you agreed to do.” Only later would Jackson, the great seducer, learn he was being seduced. By the time he was finished, his pride was so obvious it outshone any contrition.

The U.S. attorney’s office would take the unusual step of asking the court to keep Jackson behind bars as long as possible—in this case, eight years, at the very top of the sentencing range for the crimes he committed—because it was clear he couldn’t resist the temptation and thrill of it all. A letter from U.S. Attorney Jason Weinstein to Judge Batts, urging a stiff sentence, drove home the point that Jackson was proud of his work. While in prison the last time, the letter said, Jackson began writing “a self-help book for budding credit card fraudsters and identity thieves . . . his opus, entitled Personal Info of a CEO, or Anyone Else by James R. Jackson, includes a 21-chapter table of contents featuring chapter titles such as ‘The CEO Syndrome,’ ‘Gathering the Personal Info,’ ‘Getting Positive ID Anytime,’ ‘The Credit Report of a CEO and What to Do and How I Did,’ ‘Buying the Car of Your Choice Without a Job,’ . . . and ‘Mad Judge and Intimidated FBI Agent.’”

But Batts wouldn’t need the U.S. Attorney’s Office’s arguments to convince her that Jackson should go away for a long time. He did that for her. “Yes, your honor. What happened, I was going through some magazines, and after going through the magazines I saw diamond merchants listing their web sites. . . . I decided, gosh, I can log onto a web site and actually, you know, look at these diamonds, and after looking at the diamonds then of course I came to myself and I said boy, this is impressive. I said I would sure like to get some of these diamonds to just have.”

What followed was a blow-by-blow account of the diamond heist, including a boast that the master imposter had simply glanced at Who’s Who in America to pick his victims. Jackson thought he was getting on the judge’s good side by explaining every last detail, explaining how he stole money from the dead. The judge didn’t have to know about the incident at the funeral parlor, Dunn said. But she pushed him, and “he lights up like a Christmas tree.” She found that incident particularly reprehensible.

“Amazing. Simply amazing,” the judge said, goading him on. She set him up. To give Jackson the stiff eight-year term she wanted to, she needed to “enhance” the sentence by establishing that he had used “sophisticated means” to commit his financial crimes. And that determination would have to stand up before an appeals court. Jackson made her case for her. The diatribe he offered, perhaps the best public testimony yet on the methods of identity thieves, made successful appeal of the extraordinary means enhancement unlikely. Dunn liberally agreed that his client was a con man who needed to do hard jail time. But extraordinary means? “What he really did couldn’t have been any simpler,” Dunn argued. “There was nothing sophisticated about it. He just exploited gaps in the system.” What should really be on trial, Dunn says today, is the system that made Jackson’s scams so easy.

Next: He was Paul Allen for a while

Excerpted from "Your Evil Twin: Behind the Identity Theft Epidemic" by Bob Sullivan. Copyright© 2004 by Bob Sullivan. Excerpted by permission of Wiley & Sons, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.