Operating from a Newark apartment and several other addresses, Joseph Aughenbaugh, 42, and co-defendent Todd Yurgin misappropriated the identities of more than 93 victims, at least 44 of whom were minor children, said officials from the U.S. District Attorney's Office.


A federal judge has sentenced a Newark man to 12 years in prison for stealing dozens of identities and using the information to open credit cards and set up fake businesses.

Operating from a Newark apartment and several other addresses, Joseph Aughenbaugh, 42, and co-defendent Todd Yurgin misappropriated the identities of more than 93 victims, at least 44 of whom were minor children, said officials from the U.S. District Attorney's Office.

District court Chief Judge Gregory M. Sleet handed down the sentence Nov. 22.

Prosecutors, working in conjuction with the U.S. Postal Inspeciton Service and the Social Security Administrations, said the men used the identity information to open at least 343 credit cards and 54 bank accounts at over 40 financial institutions; and formed two shell businesses, ostensibly operating out of the residence, to make fraudulent purchases for services that were never rendered. All told, the defendants' conduct resulted in approximately $1 million in losses to various financial institutions.

The activity spanned a lengthy period beginning in March 2003 and continuing until the men were arrested in September 2009. Although the specifics of the fraud scheme evolved over time, one aspect remained constant: the misappropriation of valid social security numbers, federal attorneys said.

According to the Justice Department, Initially, the defendants stole mail that contained personal identifying information and used the information to apply for credit cards at various addresses they controlled. The defendants later abandoned the practice of assuming the names of their identity theft victims when applying for credit cards. Instead, they combined actual social security numbers of victims with fictitious names that they created. In many instances, the fictitious names were derivations of the last names “Yurgin” and “Aughenbaugh.” 

As part of their scheme, the men sought out social security numbers belonging to minors, most likely because they lacked credit histories and the fraud scheme was less likely to be detected. Prosecutors said the defendants verified that the social security numbers were valid by using an Internet-based search program, and then applied for credit cards using the valid social security numbers and fictitious names.

According to the district attorney, once defendants obtained credit cards using victims' social security numbers, they utilized two different methods to execute their overall scheme. The first involved the formation of two straw businesses, “Cathouse” and “Restored,” along with a corresponding business bank account at PNC Bank. After the businesses were formed, the defendants obtained a Point of Sale Terminal machine—an electronic retail payment device that businesses use to swipe credit cards as payments for goods or services rendered. The machine was linked to a merchant bank account, which in turn was linked to the PNC account. The defendants used the machine to swipe the various credit cards that they fraudulently obtained to pay for services that were allegedly rendered by the dummy businesses.

After the transactions occurred, the credit card companies deposited funds into the merchant bank account in amounts corresponding to the transactions. Since the cardholders did not exist, and defendants did not pay the credit card companies for the fraudulent transactions, multiple financial institutions incurred significant losses, prosecutors said.

The second method involved a more traditional credit card fraud scheme linked to fraudulent bank accounts. Once the defendants received a credit card from a financial institution, they made small purchases on the card and provided minimum payments, either from bank accounts or other credit cards, in order to build a credit history with respect to the particular identity. This process, referred to as “nurturing,” allowed defendants to raise the credit limit with respect to the particular credit card. It also provided an indirect, but equally important benefit: the defendants received solicitations from multiple financial institutions for "instant credit” applications for the identities they had created, which they used to apply for and receive additional credit cards.

Prosecutors said the defendants used the fraud proceeds in a variety of ways, including paying the lease for the Newark residence and purchasing other property; buying vehicles, high-end jewelry, gold coins, collectible items and clothing; and taking multiple trips to Walt Disney World and Europe.