Imagine Richard Surrell's astonishment when he learned that he owned a house he didn't buy, a Dallas house 1,400 miles away from his Southern California home.
Someone with a detailed knowledge of Surrell's credit history and a fake Texas drivers license stole his identity and used it to buy a $265,000 three-bedroom cottage in the respectable M Streets area of East Dallas.
Surely, Surrell recalls thinking when he first saw the big mortgage on his credit report in April 2001, this was a new high--or low--in the annals of identity theft.
"It was all stunning," says Surrell, a 57-year-old computer consultant who lives and works in Orange County, California. "The details of it are pretty bizarre." The thief, for one, went through all the customary channels to buy the house: a mortgage broker, a nationwide mortgage lender and a title company. A deed was even filed in Dallas County records stating the house legally belonged to Richard Surrell.
"I thought for a minute about going to Dallas and selling it," says the real Surrell of the 1940s-era Austin stone house in the 6100 block of Anita Street. But there was more to the scam than simply buying the place with fake ID.
The fictitious Richard Surrell had purchased the property for at least $70,000 more than it was worth and obtained two mortgages from Countrywide Home Loans totaling 100 percent of the purchase price. In other words, the property was awash in debt.
So how did the thief profit?
Try this one: He bought the house from himself, pocketed the pumped-up sales price and left Countrywide holding the note.
Deed records and documents listed last month as evidence in a federal criminal case suggest the house scam was one of the more elaborate cons pulled off by two Dallas brothers who authorities say combined their knowledge of insurance and consumer credit with some convincing acting and counterfeiting to create one of the most brazen ID theft rings the city has ever seen.
In July, a federal grand jury indicted Michael F. Tisdale and William R. Tisdale Jr. on charges of conspiracy, fraud and ID theft. Michael Tisdale, a 37-year-old Southlake resident, is a licensed insurance agent who at the time of the alleged conspiracy was working for Farmers Insurance in Flower Mound. His brother William, 39, of Plano, is a partner with former Dallas Cowboys Eugene Lockhart and Kevin Smith in a mortgage brokerage and a real estate investment company, corporate records show.
The Tisdales, who have pleaded not guilty, are accused of stealing the identities of the recently deceased and using them to obtain more than $1.5 million worth of luxury cars, loans and merchandise. Nine other people, seven of whom have pleaded guilty in the past month, are accused of being lower-level players in the Tisdale-led ring, which the federal indictment says operated from June 2001 to July 2002 and used the identities of more than a dozen dead people from Dallas to Corpus Christi.
The Anita Street house and several other real estate deals involving the Tisdales are not listed in the formal charges. But the government's evidence list in the case and other records suggest the East Dallas property and several others played a part in the brothers' alleged scheme.
Several of the fraudulently purchased vehicles--such as a stolen Porsche convertible William Tisdale drove, made payments on and apparently wanted to keep--were registered at houses associated with the Tisdales. The properties, one of which William Tisdale listed as his business address, apparently were used as mail drops for collecting the ongoing bills. They doubled as party houses, according to neighbors who complained about men in expensive clothes and flashy cars coming and going at all hours of the night.
A number of Michael Tisdale's former business acquaintances describe him as a talented, hardworking and successful insurance agent, and they can hardly fathom he would have resorted to such crimes. "He was outgoing, likable, personable," says Ken Hodge, who was Tisdale's landlord at the recently built one-story office complex where he ran his agency. Hodge's office was next door. "He would look you in the eye and greet you with a smile. I couldn't believe he'd be mixed up in something like this."
Again, real estate may provide the answer.
The two brothers embarked on the alleged ID theft ring within months after their efforts to build a legitimate real estate portfolio appear to have hit the skids. In late 2000, records show, banks and other lenders began foreclosing on properties the Tisdales owned in their own names. Among them was an elegant home in the Houston area valued at more than $500,000 and a new home in suburban Flower Mound worth $350,000.
On the heels of those foreclosures, the brothers began what the feds allege was a multifaceted conspiracy to pump money and merchandise out of credit unions, banks and other lenders using counterfeit identification and credit information Michael Tisdale allegedly obtained through his position as a Farmers agent.
Given the thick stack of documentary evidence Assistant U.S. Attorney Michael Snipes has listed for the Tisdales' scheduled December 2 trial, the scheme in hindsight seems rather porous, obvious and destined to fail. Through search warrants and an arrest more than two years ago, authorities recovered from the Tisdales a stack of incriminating fake drivers licenses in the names of the deceased victims, copies of obituaries stapled to Farmers Insurance credit reports, credit cards in the names of the deceased, even a copy of the deed and title documents to the Anita Street house. The fake Richard Surrell bought the house from the Tisdales and purchased his homeowners insurance from Michael Tisdale. Federal agents say they found a copy of the policy in William Tisdale's things.
But that's the nature of a lot of fast-buck frauds, says Dennis Pompa, chief investigator for the Texas Department of Insurance. "People believe they've invented a scheme so far out there, nobody will ever be able to unravel it. With all the money flowing, for some reason their greed far exceeds logic, and they don't worry about the flaws. They lose sight of getting caught because of the extraordinary greed."
On September 12, 2001, while the rest of the nation was consumed with the terror attacks that had occurred the day before in New York and Washington, D.C., two men walked into Texas Mustang Auto Sales in North Dallas. The shop specializes in lightly used Jaguars, and the two customers had their eye on a new black XK8 convertible priced at $55,000, recalls owner Peter Bulban. "A credit union we did business with back then said the guy was OK for the credit. They told us to go ahead and deliver him the car."
The next day, Bulban says, the credit union changed its mind. They had begun checking some of the data on the credit application--employment history and the like--and discovered they'd been duped. The car buyer, who federal authorities allege now was ex-con Gary Allen Grace, had used the name, Social Security number and detailed credit history of a 57-year-old Dallas businessman and former Peace Corps volunteer who had died nearly a month earlier. Grace provided an authentic-looking insurance card, a W-2 tax form and a drivers license bearing the dead man's name. He filled in a number of items on the credit application--his employer and business addresses, for instance--with bogus information, but made all the right references to the dead victim's fine credit history.
"This could have been caught, but it wasn't," says Bulban, who realized his only recourse was to try to lure the buyer back to the dealership. "The credit union wasn't going to pay us for the car. So I was out 55 grand."
Bulban says he called all the phone numbers the buyer had listed on the application, and told someone at one that actually worked that the Jag's license plates were ready for pickup.
On September 17, William Tisdale arrived at Bulban's office in a brand-new silver Porsche convertible to pick up the plates, according to a Dallas police report.
Bulban had enlisted the aid of a Dallas police detective who had agreed to stake out the dealership. But just as the suspect was expected to arrive, Bulban says, the detective insisted on taking his lunch break, and he left the stakeout.
Bulban and three employees were left to capture Tisdale themselves.
According to a police report, Tisdale got nervous as Bulban's men began maneuvering a car to block him in, and he ran out of the office and jumped in his Porsche. He squeezed it past one of their cars, then turned and aimed it at another employee who was standing in the drive and yelling at Tisdale to stop. The man jumped aside just as Tisdale roared by. As he fled the Forest Lane car agency, an employee at the wheel of an old Chrysler gave chase.
The Chrysler rammed Tisdale's car twice as it peeled down a side street, and a few blocks farther, Bulban's man forced the Porsche onto a grass median, then ran it into a curb, flattening one of its tires. With his car disabled, Tisdale grabbed a couple of bags and fled into a field along Denton Drive.
He was arrested and indicted a few weeks later on felony assault charges for trying to run down the dealership's employees.
Bulban says police let him talk to Tisdale about the stolen Jaguar as he sat cuffed in the squad car. "I climbed in next to him and said, 'Tell me where I can find my car.'" Bulban recalls. "He looked back at me and said, 'I don't know what you're talking about. I've never seen you in my life.' He was so convincing, he almost had me doubting myself. That man is cold. Very, very cold."
From Tisdale's car and belongings Dallas police gathered 13 counterfeit Texas drivers licenses bearing the photos of William Tisdale, his brother Michael and four other people involved in their ring. The names on the licenses belonged to 12 different people, all of whom had died that summer. They also found printouts from the computer database provider PublicData.com, Farmers Insurance "risk assessment score details" and several full credit reports on men who had died that summer.
Despite the wealth of evidence gathered from Tisdale's car, it would be almost 11 months before search warrants were served at the Tisdales' homes and offices--during which many more identities would be stolen--and nearly two years before they would be indicted.
U.S. Attorney Jane Boyle declined through a representative to comment on any aspect of the case, and specifically declined to answer a question about the pace of the investigation. "The excuse we got, and it made sense, was that this happened right after 9-11," says Bulban, who said he was expecting justice to be swifter. "The federal government was so tied up with anti-terrorism that it took awhile to get around to this."
Meanwhile, Dallas County prosecutors let William Tisdale plead no contest to misdemeanor assault for the parking lot incident, and he was given deferred adjudication and probation, meaning his record in that matter was wiped clean this past spring. When he deigned not to pay his $800 fine, a judge gave him seven days in jail.
With his flashy Jaguar somewhere in Dallas, and the matter tied up in a slow-moving investigation, Bulban decided to do a little sleuthing on his own. His leads, he says, were some of the addresses he picked up from the loan application and from glancing at some of the paperwork in Tisdale's Porsche.
They led him to several small frame houses in East Dallas, including one in the 5400 block of Vickery Boulevard. The silver Porsche William Tisdale was driving--which had been bought with fake ID less than a month earlier--was registered at that address. (Although Bulban did not know it at the time, a Suzuki motorcycle allegedly obtained through similar "fraud and device" by another of the accused Tisdale scammers also was registered at the house.) The address also appeared on the Jaguar loan papers, Bulban says.
Bulban says the house appeared to be unoccupied. "There was a mail slot in the door, and you could see the mail in there, spread out in a pile the size of a mattress," he says. The neighbors told him men would hold late-night parties there, and it was pretty obvious because the street would be crowded with very expensive cars, much flashier than are usually seen in this middle-income area.
Bulban says he had a hunch his car would be among them, but it never panned out. He posted fliers listing a $2,000 reward for his car and handed them out to valets at nightclubs that Dallas police told him were popular with affluent black men, like the man he was looking for. The Jaguar was found about six months later, abandoned in Southern Dallas and stripped to the frame.
Bulban didn't research the ownership history of the house, but if he had, he would have made an interesting discovery.
In April 2001, the Tisdales owned the Vickery Place house; or rather, a company they had formed, Platinum Petroleum Inc., owned it. On April 9, they bought it from the estate of its recently deceased owner. Deed records show that four days earlier, before they gained legal title to the property, they sold it to a man who took out a hefty $237,000 mortgage on the tiny, plain 1,300-square-foot wood-frame bungalow. The deal required an appraisal to match, but several real estate professionals said that wouldn't be hard to get in East Dallas, where the house stock is so varied that values range widely.
The new owner, who left no legal trace of his existence at the house and owned it when all the stolen vehicles were being registered there, defaulted on the loan within eight months.
The lender took a bath. The Tisdales, meanwhile, appear to have made a tidy profit on a "flip" in which they appear to have put up no money.
Through the late 1990s and into 2000, when they were operating with their own credit, the real estate business was far less kind to Michael and William Tisdale.
"Michael was always trying to get a side business going," says Joel Jones, a Farmers agent who shared a suite of offices with Tisdale from 1997 until the feds raided them in July 2002 and Tisdale's nine-year career with Farmers abruptly ended.
Michael Tisdale, a University of North Texas graduate who grew up in Dallas, was making at least $150,000 a year with Farmers, says Jones, who called him a talented salesman and knowledgeable agent. Jones says William Tisdale would come around the office often, working on the brothers' sideline businesses. "He struck me as someone who's trying to get something over on you...I didn't trust him," Jones says. Their father, William R. Tisdale Sr., would also come around. His pleasant nature, which Jones recalls, hardly fits with his criminal history, which includes a variety of theft and drug charges going back decades, as well as one trip to a Texas prison for tax evasion. He owes more than three-quarters of a million dollars in unpaid taxes in connection with a diesel fuel business he ran in Houston in the 1980s, records show.
In 1999, the Tisdale brothers bought five houses as investments--in Dallas, Flower Mound and Sugar Land, outside Houston--under the name Gazelle International Corp. and quickly resold them to themselves, as individuals. In the process, they mortgaged the properties to the hilt, pulling out all the equity they could.
Whether their plan was to resell the houses at a profit, or rent them, or make them pay off in some other way, it didn't work. In the second half of 2000, deed records show, banks took over the Tisdale houses in collections on unpaid loans.
Early the next year, Michael Tisdale's wife, Jada, who also works in the insurance business, filed a divorce petition to end their four-year marriage. In the contentious proceedings, she claimed her husband had been cheating on her. "There really weren't any assets to divide," recalls Stanley Mays, a lawyer who represented Jada Tisdale. "They lived right up to their means."
Mays says his client put up much of the down payment the couple used in 1998 to buy a new 4,500-square-foot house in upscale Southlake. When the divorce became final this past May, she came away with a promissory note from Tisdale that he will pay her about $40,000 when the house is sold. Michael Tisdale lives there today, in the largest house on a cul-de-sac named Thistle Court. He declined to return messages left on his home phone seeking an interview.
"No comment" was William Tisdale's response when he answered his phone at the North Dallas offices of America's Team Mortgage, a home loan brokerage he started up last fall with former Cowboys Lockhart and Smith. Deed records show Tisdale remains involved in Dallas real estate, buying and selling houses for KLT Properties, another company he formed last fall with Lockhart and Smith.
The brothers' lawyer, Henry L. Campbell III, declined to return several Dallas Observer messages left at his office.
The ID theft conspiracy the Tisdales are accused of leading--the looting of the dead--exploded into action in the summer of 2001, less than a year after their real estate business appeared to fail.
The mechanics of it were simple and built on one critical fact: One's credit lives on for a while after one is dead.
Typically, it takes a week or two for relatives to notify the Social Security Administration of a death, and a few more days for the agency to verify that information. Until Social Security's death notices are passed on to the three major credit-reporting agencies, lenders don't know someone has passed away.
From the evidence the U.S. Attorney's Office says it has ready for trial, the conspirators used as their starting point newspaper death notices and obituaries in Dallas, Austin, Houston and elsewhere, culling from them myriad personal information describing the individuals' occupation and station in life, which in turn give a clue to their personal wealth.
They turned then to computer databases and insurance "risk scores," which are tied to creditworthiness, to narrow the field further and gather more specific information, such as Social Security numbers and dates of birth. They ran these checks on at least 27 people, the government alleges. Finally, they ordered full credit reports giving detailed information on the people's accounts and credit limits--then the buying sprees began.
On July 23, 2001, for instance, a 54-year-old Dallas man died, and a brief death notice appeared in The Dallas Morning News two days later.
Before he was buried in a small town in Louisiana, the ring printed out his Farmers "risk score" and went to work. Over the next several weeks, they ran his name repeatedly through PublicData.com and two credit-reporting agencies--checking perhaps whether the Social Security death notification had posted yet.
In this case, it took more than a month.
The indictment alleges that on September 13, 2001, Michael Tisdale went to a Bank One branch in Dallas and handed a loan officer a fake drivers license bearing his photo and the dead man's name. Tisdale walked out with $70,000 in financing for a Mercedes-Benz roadster and a $25,000 loan.
It didn't stop there.
The government alleges Michael obtained an American Express Gold Card in the man's name and that William used it to fill out an online credit application at Neiman Marcus.
It appears from the evidence the government collected from the pair that they weren't even sneaky about how they transferred money from the victims to themselves. Michael Tisdale simply deposited checks made out to them in his own account. The government says it has evidence of nine such checks--totaling nearly $100,000--that Tisdale deposited.
After William Tisdale's arrest at the Jaguar dealership, the conspiracy seemed to take a new and slightly different shape. Rather than using the stolen identities themselves, the Tisdales began relying more on accomplices, and women, especially in purchasing cars. In all, the ring of 11 people stole 23 cars, nearly all luxury imports.
"I believe the evidence is going to show most of these people grew up in the same neighborhood," says defense lawyer Richard Anderson, whose client, Gary Allen Grace, pleaded guilty in the case in late September and is awaiting sentencing. "My client knew the Tisdales for a very long time."
Grace was accused of using fake identities provided by the ringleaders to steal or help steal six vehicles in a 10-month stretch: Bulban's Jaguar, a Mercedes S500 from Stadium Auto in Arlington, a new Corvette from Frank Parra Chevrolet in Irving and a Porsche 996 and a Mercedes CL500 from Park Place Motor Cars in Dallas.
In several of those cases, the indictment alleges, he "brokered" the fake-ID sales and collected several thousands of dollars in commissions from the dealers for bringing them what they thought was good business. Other second-tier accomplices obtained cars and "subleased" them for prices such as $9,000 down and monthly payments spelled out in writing.
In pleading guilty, Grace faces a maximum of five years in prison, a $250,000 fine and a requirement to make restitution. For the 31-year-old Grace, who has a robbery conviction and two parole revocations in his past, it would be his fourth trip to prison.
With all the stolen vehicles on the road and new thefts occurring at a pace of several a month, at least four of the co-conspirators were arrested while the ring was in operation, not counting William Tisdale's arrest at Bulban's shop.
One was arrested in Plano in a stolen Corvette. Another was stopped in Dallas on a motorcycle whose temporary tag a Dallas patrolman astutely spotted as fake. In that instance, the cops ran their suspect down in a 90 mph chase. Two more, a man and a 63-year-old woman known as "Granny," were arrested in DeSoto using fake ID to buy a Ford pickup, a $40,000 deluxe model with leather seats.
Somewhere along the line, defense lawyers in the case speculate, one of them talked, or provided agents a key to tie it all together and obtain warrants to go after the Tisdales. On July 24, 2002, a horde of agents moved in on the brothers, who were bold enough to have saved in their homes and offices many of the documents they used to carry out their plan.
There was more evidence parked in front of Michael Tisdale's agency in Flower Mound. That day, the indictment alleges, he was "in sole possession of and driving" a shiny new Porsche stolen more than a year earlier with a dead man's ID.
If convicted on all counts, Michael Tisdale faces a maximum of 45 years in prison and a $1.5 million fine. His brother faces up to 15 years and $500,000.
Whom did all this credit grave-robbing hurt? The ultimate victims of identity theft are the banks and lenders that provide credit, but the deceased marks' relatives say they were the hidden victims of the crime. It fell to these grieving survivors, hit when they were down, to sort out the problems and clean up the mess.
"I did a lot of crying on the phone," says Ava Hardesty, a San Diego social worker whose sister's accounts were looted in the Tisdale scam. "It was awful, a real low blow having to deal with this on top of the death."
Her sister, Austin artist/singer/restaurateur Jennifer Koury, died in early March 2002. A feature obituary in which the 45-year-old Koury was remembered as "the essence of a '70s flower child" ran in the Austin daily paper days later.
"They moved so fast," Hardesty says. "Before the funeral they were opening accounts in her name."
In the indictment, the Tisdale ring is accused of stealing one vehicle in Koury's name, but Hardesty says that is only part of the story. The scammers opened new credit lines in her sister's name and got cash and merchandise, too, she says. "They even paid off one of her cards with a balance transfer," says Hardesty, who acted as the executor of her sister's estate. "Someone did that with another account they opened in her name and then used. Nobody even asked for a signature."
Hardesty says she straightened out her sister's accounts after dozens of hours of pleading with creditors. "They handled things, but they handled them very badly," she says. "I never talked to the same person twice."
Richard Surrell, who holds the distinction of being the only live person connected to the credit victims in the case, says he spent more than 200 hours working to get his identity back.
He says he has no clue how the Dallas ring singled him out, but he received a warning a few months before the February 2001 house purchase that someone had stolen his personal information from the company that processes his payroll check. "I can only guess that's where it started," he says.
The $265,000 in mortgages on the Anita Street house was his biggest problem, but the thieves went wild with the rest of his credit lines as well. Four months after he began riding herd on his credit accounts, he says, someone was still trying to change the mailing address on his personal checking account.
In July 2001, 10 weeks after he made his first complaint to the company's president, Countrywide removed the home loans from his credit history. A Countrywide spokesman did not return calls seeking comment on Surrell's case.
Dallas police were less responsive to his problem, Surrell says. "I had to call 14 times before I got someone to talk to me."
He first became aware someone was using his credit when a salesman at Manufacturers Auto Leasing in Dallas called him in late April 2001 and asked him if he was relocating to Dallas and leasing a new car. He says Manufacturers was willing to go through with the deal and trap the thief, but nobody at DPD took them up on it. "I was told that until something was taken, there was no crime."
In the Tisdale indictment, Manufacturers Auto Leasing is listed as one of the ring's chief targets, the source of six cars. The Tisdales may be going to trial, but other scammers with similar methods keep walking through the door, says Gary Vaughn, a manager there. "We had one come in recently, and he was so convincing, he spent three days negotiating with us on the monthly payments," Vaughn says. It took a detailed look at the man's credit history and documents to spot the fraud, Vaughn says. "He'd been borrowing money at [a sub-prime lender], and that didn't fit." His proof-of-insurance card also turned out to be a fake, but it took a phone call to check it.
"They're getting sharper and sharper," says Vaughn, whose company leases mostly high-end European cars.
This summer, the Federal Trade Commission called identity theft "a crime of the times" and released survey results showing that 4.6 percent of Americans were identity theft victims last year. A third of those had people opening new accounts fraudulently created in their names, which usually adds up to five-figure losses in the accounts of the real account holders.
Bulban, at Texas Mustang Auto, says he expects things will get worse before they get better. With computerized databases, high-resolution printers and other tools widely available--and law enforcement slow to the punch--he believes ID theft is just beginning to come of age. "It's like the Internet was in 1994," he predicts. "It's only starting to take off."
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