Feds Nail Texas Phisher

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March 23, 2004 (11:12 AM EST)

The Federal Trade Commission (FTC) and the U.S. Department of Justice announced Monday that they had shut down a phishing operation and arrested a Texas man who created bogus e-mails posing as official messages from AOL and PayPal.

Zachary Hill, of Houston, pleaded guilty to charges of phishing for confidential and financial information by sending e-mails that warned consumers that their AOL or PayPal accounts would be canceled unless they resubmitted their credit-card or bank-account information. Such phishing scams are on the rise, according to the Justice Department, which has posted a special advisory on its Web site.

A link in the e-mailed messages directed consumers to what appeared to be legitimate AOL and PayPal Web sites, but were, in fact, faux sites created by Hill. On the bogus sites, Hill asked for information ranging from mother's maiden name and Social Security number, to credit-card and bank-account data.

According to the government, Hill obtained over 470 credit cards, 152 bank accounts, and 566 sets of Internet service account passwords and usernames in the scam, and used the credit cards to purchase more than $47,000 worth of goods.

Hill has been charged and convicted, and he awaits sentencing under a plea bargain, said the FTC and Justice.

"The government can make a difference when agencies work together to crack down on Internet identity theft scams," said Assistant Attorney General Christopher Wray in a statement.