Alleged Synthetic Identity Fraud Victims Speak Out in Undercover Investigation

"Nightline" went undercover at a credit repair company in Baton Rouge, Louisiana.
8:19 | 08/18/15

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Transcript for Alleged Synthetic Identity Fraud Victims Speak Out in Undercover Investigation
Tonight you are going to see a dramatic confrontation between co-anchor Byron Pitts and pastor accused of pedaling surprising kind of identity fraud. Why so many are falling victim to this so-called synthetic identity fraud and how a man of god got mixed up in it. Here is Byron. Nice to meet you. This is candy my girlfriend. Reporter: When you repair people's credit for a living it is all about the personal connection. I am going to ask you to leave my property. Reporter: But you really can't blame Donald Baptiste for being in a bad mood, he learned we attended two sales meeting wearing hidden cameras. Meetings in which he alleged to have been selling a new type of identity fraud called synthetic identity fraud. The allegation, the suggestion that you are involved in synthetic fraud. That you go to people who are desperate to have their credit restored. Everything that I do is legal. Reporter: That is not how investigators see it. They say this kind of I.D. Manipulation is against the law. Unlike typical I.D. Fraud in which a thief steals someone's identity, synthetic fraudsters help invent new identities. The fraudster uses one piece of your I didn't tee and combines with fake information, perhaps a different name. Reporter: Most important a different social security number. All put together to form this synthetic identity. Reporter: A growing problem. By some reports, synthetic fraud accounts for 85% of fraud in the country. Costing an estimated $2 billion every year. Baptiste's small business, not alleged on that scale. Still from this unassuming storefront in Baton Rouge, Louisiana, formerly occupied by driving academy. Baptiste has reached all over the country using social media. We got on the conference call. When I heard people chichi ichiming in, Chicago, Houston, Memphis. It was like, oh, man this is the real deal. Reporter: For the pastor and many other customers who say they had no idea what they were getting into, Baptiste's most important credential his bible. -- Worship the lord. Reporter: 24 years old, Baptiste calls himself an apostle and says he has his own church in Baton Rouge. That sealed the deal. There was another man of god. Reporter: For pastor foster struggling to get himself out of debt and fledgling church in Cleveland, Ohio on its feet. It all sealed like divine Providence. He was talking fresh start. Get your credit together. Reporter: To do that, foster says Baptiste advised him to coop his real name but to get a new address. Then he sold him something like a new social security number. He was selling this nine-digit number. Credit profile number. A cpn is a multidigit number looks similar to a social security number. And it's what's given to people by these -- credit card repair companies for them to go out and open up new accounts. Could it really be this easy? Two of our producers headed to Baton Rouge, going undercover. This is the, the button camera. So this is our very discreet purse camera. Posing as customers, hear more about the man himself. He laid out his method. Do you know what's on it? Reporter: Listen to how Baptiste describes the cpns that seemed all most too good to be true. A nine-digit number you get. Validated by the social security administration. You use it almost like your social. You can only use it to buy a credit card. Reporter: He was all too happy to explain where he gets them. We build them. We go into the system. We apply for the new credit profile for the social security administration. Reporter: Investigators tell us cpns are often obtained by plugging in random nine-digit Numbers into a website or validation site. We are not going to name here. Until a number is found that has not been issued. He told us we could buy a cpn for $350. It sounded so good. But was it legal? Okay. The FBI some people say cpns are illegal. The only reason they say they're illegal because a lot of people don't know how to use it. Reporter: Turns out the people who say it is illegal that would be the authorities. There is no legal use for a cpn, not issued by the social security administration. Reporter: The social security administration agreeing saying despite what many of these credit repair web sites imply, cpns are not legal. Remember this. It is legal. We go to the FBI. Reporter: We called the FBI as well. They say they also don't issue cpns. The front works because authorities say some credit card companies rarely check to see if the cpn matches a person's name. The electronic transactions association, a trade group made up of credit card issuing banks says consumes who choose to place one of the cpns on a credit application will be committing a federal crime. State and federal agencies are cracking down. In New Jersey, four people pled guilty to stealing $200 million using synthetic id fraud. And in Indiana, over a dozen people pled guilty to selling cpns, receiving sentences of up to 40 months. We was really at a crossroads wit ministry, finances. Foster says he got the credit card using the new credit pre file. Then Baptiste offered something better. We were strapped for lack of a better term. Reporter: He would get foster a loon ine of credit up to $500,000. All he needed was a cash payment of $4,000. The trust was there. Reporter: Hoping to finance a church, he wired Baptiste the cash. As soon as the money was gone, so was Baptiste. Donald Baptiste is a wolf in sheep's clothing. Same thing happened to her. If I was Donald Baptiste, what would you say to me? I want my damn money back. Reporter: We decided to pay a visit to his office in baton Rouge. Hello, Mr. Baptiste, my name is Byron Pitts. We tacked to police investigators what you are doing with credit privacy Numbers is illegal. You didn't do credit privacy Numbers? I'm sorry, I have many gifts, Mr. Baptiste, lip-reading isn't one of those. Would you mind opening the door so we can talk. Turning the lights off. He apparently didn't want to talk. Mr. Baptiste. After sitting in the dark in his office he finally came out. There are people who told us that they gave you $1,500, $4,000. And never heard from you again. They're not telling the truth? They're not telling the truth. All my Numbers are still the same. Reporter: You said you get the cpn Numbers from social security, is that correct? No. Reporter: You told me a few minutes ago. We have you on camera. I said I don't get them. The agency gets them. Reporter: The agency gets the Numbers from social security? Correct. Reporter: What is it? Legal cpn, an online company in Michigan with an F rating from the better business bureau did not respond to multiple requests for comment. Reporter: You say you get the Numbers legally. But I'm telling you now we talked to social security, they say that is not possible they dent issue cpn Numbers. That's fine. Reporter: How do you explain it? That's fine. I've don't have an explanation. Reporter: Do you thing it is legal, ethical? I'm asking you are leaving the prompt. Reporter: It is your belief you are an honest businessman? Yes. Reporter: Baptiste suggest he's did nothing wrong. In fact not arrested or charged with fraud. Fosters and wells complaint along with hundreds of others have been referred to state authorities. For now, Donald Baptiste appears to still be in business. It's been a long time coming. Reporter: Back in Cleveland, pastor foster closed on a new church, three years after investing with Baptiste. What Donald Baptiste meant for evil, god turned around and worked it for our good. Reporter: For "Nightline," Byron Pitts in Baton Rouge, Louisiana.

This transcript has been automatically generated and may not be 100% accurate.

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