Sunday, June 26, 2005

Organized Fraud Gangs

With the advent of the internet, fraud has become increasingly more global. There is evidence that there are major organized groups (gangs) running a lot of the frequently mutating financial scams. Recently, we have seen fairly high quality counterfeit money orders, cashier's checks and washed counterfeit bills indicating a fairly high level of sophisitication. We have also seen increased sophistication in phishing and pharming scams and repetitive large scale data intrusions, where both personal information and financial instruments (credit card numbers) were compromised.

The known players in these enterprises are the Russians, Nigerians, Asian, Armenian and Mexican organizations. As stated in my previous post, many of these groups plant people in organizations to skim financial and personal information. Although in some instances, these plants perform scams within the organization they infiltrate, more often than not, they merely skim information to be used in outside fraud scams that might even be committed in a different country.

Recently, there has been a tendency to see the various groups work in collusion with each other. For instance, counterfeit Postal Money Orders, have been traced to being produced in both Nigeria and Eastern Europe. Traditionally, counterfeiting was a primary function of the Asian gangs. 419 (Advance Fee) scams are now as likely to originate in Russia and Eastern Europe in what was traditionally a Nigerian scam.

Quite often, both personal information and counterfeit financial instruments are being produced by one organization and passed by another. Information and instruments are also often sold. When the Advance Fee scam mutated into the Auction Scam, it was difficult to prosecute because many of the people passing the counterfeit instruments were considered innocent victims. In a further mutation of this scam, people are merely pretending to be victims, obtaining the instruments and attempting to negotiate them. Recently, in the news, the Postal Inspection Service arrested numerous people for doing this.

Although not known, it makes one wonder if these groups could also be doing business with terrorist organizations.

Most of the groups are involved in a lot of activities, including drug trafficking, extortion, murder and white slavery. Interestingly enough, they consider the fraud schemes as the safest because they carry light penalties and there is less chance of getting caught.

Although, most of these groups work in collusion (network) with other groups, within their parent organizations, they maintain ethnic purity within their own ranks. This makes it extremely difficult to infiltrate these organizations.

In light of recent events and the ever growing bill that these people are causing, we can no longer afford ignore this activity. Proactive measures must be taken to combat this menace and we must realize that it is no longer contained within national boundaries. Should we fail to act, we might find that this menace will destroy the way we know society today.

Here is a link to a previous post on legislation to increase the penalties on these crimes. There are links to political representatives in both the US and UK. Write them and show support.

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