Copyright 1999 Globe Newspaper Company
The Boston
Globe
October 15, 1999, Friday ,City Edition
SECTION: ECONOMY; Pg. C3
LENGTH: 452 words
HEADLINE:
N.Y. firm, president fined for bank fraud;
Source One hit with
$500,000 penalty
BYLINE: By Ross
Kerber, Globe Staff
BODY:
A
Suffolk Superior Court judge fined a New York business and its president
$500,000 after determining the company tricked financial
institutions into disclosing secret customer account information.
The
civil case brought by the office of Massachusetts Attorney General Thomas F.
Reilly alleged Source One Associates Inc. of Poughquag, N.Y., and its president,
Peter Easton, engaged in unfair and deceptive practices as part of the "asset
search" industry, which has faced growing criticism from bank regulators for its
allegedly shady practices.
Easton denied the allegations. Reached by
phone yesterday, Easton said he plans to appeal the ruling but declined to
answer specific questions until he could review the decision. According to the
ruling released yesterday by Judge Gordon Doerfer, Source One was hired by
several other businesses to provide information on specific financial accounts
on more than 1,000 occasions. Customers for the information included attorneys
and private investigators, possibly seeking to learn the assets of a person who
does not wish to disclose them.
Source One maintained that it used legal
means to obtain the information it resold, but the judge disagreed and wrote
that Easton often would contact "banks or institutions and pretend to be the
customer or someone authorized to obtain [ sensitive] information, such as a
bank employee."
The judge also wrote that "In an age of computer
databases and electronic retrieval of sensitive information the
public is justly concerned that the privacy of personal
information be protected."
Prosecutors produced records that
showed "the names of hundreds of individuals whose private financial information
was sold by Source One," according to the ruling.
Witnesses at the trial
included customers whose account information at Framingham Cooperative Bank and
at the former Bank of Boston Corp. was allegedly obtained and passed along by
Easton without their permission. Both banks cooperated in the state's
investigation, and have tightened security training in an effort to stop
unauthorized disclosures.
In addition, a Fidelity Investments security
official also testified against Source One after suspecting the company
attempted to impersonate Fidelity customers to learn about their accounts.
Easton also benefited from the misuse of credit reports from Equifax
Consumer Information Services, the judge wrote. Equifax canceled Source One's
account in 1996 after "concluding that Source One was using credit reports for
questionable purposes," according to the ruling.
At least one customer
for Source One's services was a South Shore municipal tax collections office,
prosecutors said.
LOAD-DATE: October 15, 1999
