Updated: 12/09/10 4:32 p.m.

CHICAGO (WBBM/CBS) — A West Side woman and her granddaughter face charges in an elaborate ID theft and fraud scheme to make money from gas and electricity service. They are charged with stealing the identities of at least 500 people.

LISTEN: Newsradio 780’s Regine Schlesinger Reports

Chicago police say the “Operation Heat Wave” investigation began when Peoples Gas and Commonwealth Edison became suspicious about hundreds of accounts that were being opened in the names of elderly, disabled and nursing home residents. The utility contacted police.

Investigators now say that Artestine Ramey, 61, and her granddaughter, Jessica Washington, 24, both of the 4100 block of West Potomac Avenue, had been taking money from utility customers whose gas and electric service had been disconnected because they hadn’t paid their bills.

According to police, those customers would pay Ramey and Washington a fee to get their service restored. They would set up phony accounts in the names of unsuspecting ID theft victims. The bills would then go to the innocent victims.

“Ramey was paid several hundred dollars by individuals needing gas service. She would then obtain a stolen identity, call the gas company, and obtain gas service for the individual. The gas was turned on and the bill was never paid,” said Cmdr. Anthony Riccio, Chicago Police Dept.

Ramey and Washington were arrested Wednesday after an investigation which started back in 2008. Ramey is charged with felony theft and identity theft. Her granddaughter faces an additional forgery charge.

Investigators were led to the women after an internal audit by Peoples Gas revealed that more than a thousand calls for service had been made from one telephone number.

Further investigation showed that the same telephone number was linked to hundreds of new accounts in the names of different people throughout Chicago.

Cook County authorities are still not sure who was supplying the women with the stolen identity information which included names, social security numbers and dates of birth.

But Chicago police believe Ramey was the mastermind of the operation.

Ramey and Washington are the only people charged at this time in the operation, but Chicago police say more arrests could come, including some of the people who received the stolen gas.

“They were paying Artestine Ramey for these stolen identities, and they were aware they were getting the gas for free, and never paying their bill,” Riccio said.

Chicago Police say the estimated loss by Peoples Gas is in the millions, but they won’t know the full extent of the damages or the number of victims until their investigation is complete, and that could take several more months.

As for the suspects, a judge set Ramey’s bond at $100,000. Washington’s bond was set at $10,000.

Newsradio 780’s Regine Schlesinger and CBS 2’s Mai Martinez contributed to this report.

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