Management of Daimler North America subsidiary Car2Go decided to stop conducting manual background checks on all of its users in April to attract new users. Instead, it attracted a ring of thieves in Chicago.
Dozens of vehicles were stolen from the company’s Chicago location on April 15, according to Bloomberg Businessweek, and the thieves claimed the vehicles as their own when workers went to a West Chicago neighborhood to retrieve them.
“This was a unicorn incident for us as a company,” Car2Go spokeswoman Kendall Kelton told Bloomberg Businessweek. “We’ve never seen this type of fraudulent activity and this scale ever, ever.”
Two days after the thefts, the Chicago Police Department said it was notified by Car2Go that some of the company’s vehicles may have been rented by deceptive of fraudulent means through the brand’s mobile app. Additionally, a Daimler spokesman wrote in an email that the company is working with Chicago law enforcement “to neutralize a fraud issue.”
“No personal or confidential member information has been compromised,” Daimler spokesman Michael Silverman said. “Out of an abundance of caution and safety for our members and Chicago fleet support teams we are temporarily pausing our Chicago service. We will provide an update as soon as possible, and we of course apologize to our Chicago members for the inconvenience.”
The following day the police charged 21 people with misdemeanor criminal trespass to vehicle, and one of those individuals faced an additional felony charge for financial identity theft.
Kelton said about 75 cars in total were compromised and eventually recovered, though some only after being stripped of doors, seats and other parts, according to Bloomberg Businessweek.