Passwords are a Thief’s Best Friend: $2.1 Million Stolen from Dead Customers and Dormant Accounts

by | Aug 29, 2019 | Uncategorized | 0 comments

Here’s another reason why it’s important to control and manage digital assets during life and after death. A supervisor at Vanguard Group was sentenced to four years in prison for stealing $2.1 million from the accounts of dead or inactive customers through the use of passwords that he stole from his own staff.

Vanguard is a well-known and respected company, but investment accounts that are not accounted for and closed after their owners have died are vulnerable. All it takes is a password from an employee who knows how to work the system.

What’s even more unsettling: the only way this theft came to light was because the man’s brother-in-law confessed to law enforcement. Otherwise, no one would have ever known, said a federal prosecutor.

If a federal prosecutor doesn’t think anyone would find out about a digital crime, that should be all anyone needs to know to get their digital assets in order.

According to the article in The Philadelphia Inquirer, “Prosecutor: Vanguard never knew of $2.1 million theft from dead customers until an accomplice confessed,” the accounts had been slated to be ‘escheated,’ or transferred to state treasurers as unclaimed assets. Escheated funds can be reclaimed by account holder’s heirs if they can prove their ownership.

The state of Pennsylvania netted some $200 million from dormant financial accounts last year. Delaware actually retains private firms to find dormant funds, and that strategy pays off: the state netted $500 million from dormant accounts.

This thief was able to access the Vanguard system that issues checks, and arranged for checks on dormant accounts to be sent to his accomplice, who later shared the proceeds.

Had these dormant accounts been managed by their owners or their owner’s heirs, this crime of opportunity would never have happened.

Wondering if your accounts will be protected after you die? Start by making a plan for your digital assets, including securing your passwords and creating a directive for all of your digital accounts so that your assets and accounts are protected.

Directive Communication Systems provides a secure and seamless platform to manage digital assets. By keeping accounts visible, they can be effectively handled, preventing loss and fraud.