Friday, September 30, 2005

Once a Fraudster Always a Fraudster

David Alan Smith represented himself a reformed criminal and was able to speak out to prison officials and politicians on alternatives to traditional prison in Texas. You know those "socially correct" programs like home detention and spending the taxpayer's money educating our criminal population.

Before becoming a poster boy for rehabilitation, Smith had been convicted of mail fraud, wire fraud and filing false claims.

Apparently, he was conning us with his rehabilitation crusade!

On Thursday "Smith plead guilty to mail fraud, making a false claim against the United States, unlawful use of a means of identification, interstate transportation of stolen property and money laundering." He did this by advertising for jobs and using the information from resumes in several fraud schemes, all related to identity theft.

I wrote a post on Internet Resume Posting and Fraud sometime ago.

According to Steven Kreystak's article, "It is unclear how much time he has served in prison, but before the Austin conference in 2000 he told the Austin American-Statesman that he had served 18 years once for bank fraud. Another ex-con who helped Smith with the conference, Barry Keenan, told the American-Statesman in 2001 that Smith twice escaped the Terminal Island federal prison near San Pedro, Calif."

"We're working diligently to get more programs in prisons," Smith told the American-Statesman in 2000. "The mentality now is that programs don't work, inmates won't change, and the only solution is to lock 'em up and throw away the key. None of those things are true."

As a mere spectator in this, I must surmise that since Smith was obviously making a false statement (above), the logical conclusion is to lock him up and throw the key away.

For the full article by the American Statesman, click on the title of this post.

Wednesday, September 28, 2005

The Consolidation of Organized Criminal Activity

I read an interesting story from the Associated Press about organized crime in Japan. Japanese Gangs are consolidating their ranks, which gives them more leverage and power. According to the article Japanese gangs bring in "billions of dollars a year from extortion, gambling, prostitution, Internet pornography, guns, drugs, and real-estate and construction kickbacks."

"Consolidation makes good business sense in Japanese gangland. They are tightly organized in a pyramid style, with gangsters paying cuts to their bosses, and their bosses paying increasingly large fees to their overlords. In exchange, members get protection and help in fending off rivals and can use their affiliation with a major syndicate to pressure extortion victims."

In the West, there have also been trends noted on organized gangs consolidating and often joining forces to commit crimes. Quite often different parts of the same criminal activity are done by different gangs working in collusion with each other. This makes it more difficult for the authorities to investigate.

I have written several posts on this:

Rumor of a Partnership Between Organized Fraud Gangs and Terrorists?
McAfee Study on Organized Crime and the Internet
Organized Fraud Gangs
Fraud Gangs Plant Insiders

Although, it hasn't been substantiated yet, I'm guessing that a portion of the fraudulent websites related to the Katrina Disaster were set up by some of these gangs. The FBI estimated that 60 percent of them were being hosted outside the United States. Thousands of these sites have popped up in the aftermath of Katrina.

These criminals count on working in numerous law enforcement jurisdictions to confuse investigative and prosecution efforts. In the end, to be successful, perhaps law enforcement should learn from this and look at breaking down the barriers that "jurisdictions" create?

For the full story (recommended) by the AP, click on the title of this post.

Saturday, September 24, 2005

All Criminals are the Same

Bernie Ebbers has some company behind bars, although it is doubtful he will see them for a long time. Dennis Kozlowski and Mark Swartz, formerly of Tyco International have been sentenced to 8 to 25 years in prison. These two "gems" of society ripped off millions of dollars from the company they ran. Since they were convicted by the people of New York, they will not being going to "Club Fed" (Federal Prison), which means they will serve hard time.

In another case, David Radler, the former publisher of the Chicago Sun-Times, has also entered a guilty plea for scamming $32 million from the newspaper's parent company.

Enron's Kenneth Lay and Jeffrey Skilling will be going on trial soon, also. Maybe Aunt Millie will see some justice? Here is a previous post, I did on Enron: The Road to Justice is Slow for Aunt Millie. Even if they are convicted, it is doubtful that their true victims (the people of California) will ever be made whole.

In all these cases (these greedy people of means) destroyed thousands of jobs and cost hard working investors millions of dollars. In addition to this, the costs of their misdeeds (in some instances) were passed on to ordinary people, who needed the services they provided.

In the end, they deserve no sympathy and are no better (or different) than their new neighbors at the crossbar hotel! In fact, since they all had considerable "means" when they committed their crimes, they are probably worse.

For a post on Bernie Ebbers, click on the title above.

Thursday, September 22, 2005

Counterfeit (MoneyGram) Travelers Express Money Orders

I'm surprised I haven't seen many reports in the media on counterfeit Travelers Express Money Orders. They seem to be frequently appearing in advance fee scams, particularly on auctions, such as E-Bay. Please note that these scams don't only happen on auction sites, they can occur on dating sites, within chatrooms and arrive via spam e-mails etc. etc.

I was even recently contacted by a reader where the (advance fee scam) attempt was made with a Qchex, (checks you can have e-mailed to you) as payment for a rental. Of course, the reader was then solicited to wire the excess $4,500.00 to someone, who was supposed to arrange furnishings. Upon verification, the check turned out to be counterfeit and our reader avoided becoming a victim of this scam.

Here is my most recent post on Qchex: Addressing QChex Fraud.

The counterfeit items reported to me are being made in the $1,000.00 to $1,500.00 range. They are being passed either for high value merchandise, or given as overpayments on the asking price of the merchandise. The seller is then being duped into wiring the money, normally overseas.

Some of the items reported to me also had Walmart and Ace Check Cashing logos on them.

Recently, there have been a lot of counterfeited U.S. and Canadian Postal Money Orders used in internet scams. Here is a post, I did on them: More on Postal Money Order Scam.

According to the U.S. Postal Service, they were being produced in Nigeria and Eastern Europe.

The items being passed seem to mutate. For some time, they were counterfeit cashier (official) checks, then came the official government money orders and now it seems, money orders in general. The thing to be aware of is the behavior, which is a come-on (normally over the internet) to cash the items for a percentage, or to negotiate them over the amount of something you are trying to sell and wire the excess money. Once in awhile they are to free some beautiful model from Eastern Europe, or Nigeria, who is facing oppression in her homeland.

For information on how to determine if a Travelers Express Money Order is good, click on the title of this post.

Tuesday, September 20, 2005

Identity Theft/Check Fraud in Katrina

In a story released by Reuters, the Louisiana Attorney General's Office is reporting that identity theft is complicating getting benefits to victims. When they apply, they discover that someone has already applied (using their information) and received benefits in their name.

Besides identity theft, I would imagine that we will being seeing a lot of check fraud in the near term. The reason for this is that the government and relief agencies will be issuing checks for benefits. The U.S. Postal Service is recommending that displaced victims submit a "change of address" to a temporary address, where they can pick up their mail in order to avoid having it stolen.

Mail theft, especially to steal government checks, is nothing new. The criminals involved in this target times when they know a lot of checks are in the mail. Every year, there is a huge surge of this activity during tax season due of the amount of refund checks being mailed.

In the case of stolen checks, the criminals will have to assume the identity of the person entitled to the check. Many Katrina victims were stranded without their identification and agencies, such as the Social Security Administration have set up remote offices to address this problem. With the combination of temporary offices set up to issue identification and masses of displaced people, it creates an environment that identity thieves/check fraudsters will probably try to take advantage of.

In the ensuing confusion, there have already been reports of people "double and triple" dipping for Katrina benefits. One common method of doing this is to cash in the original benefit payment (normally a check) and then claim it was never received.

This activity is starting to occur all over the country with people showing up, claiming to be displaced victims and applying for benefits. There are reports of people being arrested for this, as well as filing false claims, nationwide.

I wrote about some of this in an earlier post, Katrina Fraud Far and Wide .

There are many other methods the crooks use to pass bad checks. Here is a document from the Treasury Department that is pretty extensive on Check Fraud:

For the story by Reuters, click on the title of this post.

Monday, September 19, 2005

ATM Machines That Clone Your Card

I received an e-mail showing how ATM skimming (stealing card information complete with PIN) has become more advanced with the advent of portable devices and wireless technology. Being leery of e-mail, I researched recent articles to validate this activity.

One of the articles, I researched was from by Bruce Mandelblit, which can be seen, here.

Here is the text of the e-mail, I received:

"A team of organized criminals are installing equipment on legitimate bank ATM's in at least 2 regions to steal both the ATM card number and the PIN. The team sits nearby in a car receiving the information transmitted wirelessly over weekends and evenings from equipment they install on the front of the ATM (see photos).

If you see an attachment like this, do not use the ATM and report it immediately to the bank using the 800 number or phone on the front of the ATM."

The equipment used to capture your ATM card number and PIN are cleverly disguised to look like normal ATM equipment. A "skimmer" is mounted to the front of the normal ATM card slot that reads the ATM card number and transmits it to the criminals sitting in a nearby car. At the same time, a wireless camera is disguised to look like a leaflet holder and is mounted in a position to view ATM PIN entries.

The thieves copy the cards and use the PIN numbers to withdraw thousands from many accounts in a very short time directly from the bank ATM."

I also found the pictures of this on Snopes is a site that reports on urban legends and whether, or not they are true. They list this one as true and based on my independent research, I believe they are right. Note that this method is being reported in Europe, South America, North America and Asia.

When going to this site, I also realized that the author of the e-mail had obtained their information from Snopes. Please note, Snopes claims to have gotten their information from the internet, also.

Snopes post, here.

This activity has been around for a few years. In the past, it was primarily done in small retailers, where the skimming device was behind the counter and the camera was over the keypad. It was also done by setting up ATM machines that were completely fake. It's always a GOOD IDEA to conceal your actions when entering your PIN. When you do this, the camera doesn't record your PIN number and they can't clone your card.

I've written a little about this phenomonen (skimming), which I update every so often. All the posts can be viewed, here.

Here is a picture of a ATM Machine after being compromised.

They attach a device over the card slot on the legitimate ATM, which reads the magnetic information. Using the latest wireless technology, it is normally transmitted to fraudsters in a nearby vehicle.

Your ATM is protected by a PIN, but these criminals have a solution for this too. They install a hidden camera, again using the latest technology (wireless) and the PIN is digitally recorded.

Here is a picture of the compromised ATM with the camera installed.

Sunday, September 18, 2005

Fraud Related to FEMA

Apparently, the bungling and ineptness by the Federal Emergency Management system (FEMA) is nothing new. The South Florida Sun-Sentinel did an investigation, which revealed at least 330 million in payments to people, who weren't affected by the disaster they filed claims on. Here are some glaring examples:

  • $5.2 million to Los Angeles-area residents for the 2003 wildfires that burned more than 25 miles away.
  • $168.5 million to Detroit residents for a 2000 rainstorm that the then mayor doesn't even remember.
  • $21.6 million in clothing losses alone to Cleveland residents for a 2003 storm that brought less than an inch and a half of rain.

The investigation was started after FEMA distributed 31 million in Hurricane Frances claims to residents in South Florida that hadn't been exposed to the hurricane. Since then there has been evidence uncovered that defrauding FEMA is considered easy and done from coast to coast.

The Sun Sentinel examined 20 of the 313 disasters declared by FEMA in the years 1999 through 2004. Of the 1.2 billion paid, 27 percent of the money went to areas that had suffered no, or little damage in the disaster.

According to the article, in some of the so-called disaster areas, residents were openly discussing how to defraud FEMA and even passing damaged goods from house to house.

Ultimately, this indicates to me that FEMA is desperately in need of an overhaul, which should include some serious auditing and oversight to ensure that the services they provide are effective. Besides demonstrating a total lack of financial management, this ultimately hurts the entitlements made to the people, who are really victims.

After reading this, it isn't very surprising what happened in the Katrina disaster.

Daily, we hear of fiscal emergencies within our governments. The money for these programs comes from the people, who pay taxes. It is becoming apparent that those who choose to defraud and the government agencies that exercise poor management need to held accountable.

In fact, it's possible that if we fix these problems now, it might even help save lives in the next disaster. If we are spending this many resources (human and financial) paying out fraudulent claims, it has to be a drain on their ability to service the people, who really need the help.

You can read the full story courtesy of the Gainesville Sun (without my commentary) by clicking on the title of this post.

Beware of Flood Damaged Cars

There are undoubtedly a lot of flood damaged vehicles as a result of the Katrina Disaster. I read a story from the AP that is warning consumers to be careful of buying flood damaged cars, which are cleaned up to conceal that fact that they were damaged. Furthermore, with the volume of cars being sold on auction sites, such as E-Bay and Craig's List (along with the known fraud occurring on these sites), the old saying "BUYER BEWARE" certainly applies.

A useful tool in determining the history of any vehicle is CarFax. Please note that they charge a nominal fee for their services and you can go to their site by clicking on the title of this post.

For the complete story from the AP, please go to:

"The National Automobile Dealers Association says although there's no foolproof method to test a vehicle for flood damage, a prospective buyer should, at a minimum, perform the following inspections before committing to a purchase:

1. Check the vehicle's title history, which may say whether it has sustained flood damage.

2. Examine the interior and engine compartment for evidence of water and grit from suspected submersion.

3. Check for recently shampooed carpet.

4. Check under the floorboard carpet for water residue or stain marks from evaporated water not related to air-conditioning pan leaks.

5. Look for rust inside the car and beneath carpeting and visually inspect upholstery and door panels for evidence of fading.

6. Check under the dashboard for dried mud and residue, and note any evidence of mold or musty odors in the upholstery, carpet or trunk.

7. Check for rust on any screws in the console or other areas where water normally would not reach unless the vehicle had been submerged.

8. Check for mud or grit in alternator crevices, behind wiring harnesses and around the small recesses of starter motors, power steering pumps and relays.

9. Complete a detailed inspection of the electrical wiring system, looking for rusted components, water residue or suspicious corrosion.

10. Inspect the undercarriage of other components for evidence of rust and flaking metal that would not normally be associated with late-model vehicles."

Saturday, September 17, 2005

Katrina Fraud Far and Wide

From sea to shining sea, people who lack morals and virtue are taking advantage of the Katrina Disaster. Up until now, when posting on this subject (Fraud in the Wake of Katrina), I have focused on some of the more organized scams. Here are a series of stories from local sources, which show some of the smaller frauds being committed.

Here is a story about a woman in Wilmington, North Carolina, who posed as a victim of Katrina, received money from the Red Cross and was later arrested. The story is courtesy of WECT in Wilmington.

In another story from WFIE in Indiana, they are catching people posing as victims of Katrina. The article also states that "debit cards meant to help victims of Hurricane Katrina have been used at Victoria's Secret, Circuit City and Hooters."

Here is a story from the LA Times, who is reporting that 25 people in Houston, Texas have been arrested for claiming money they were not entitled to.,1,301513.story?coll=la-headlines-nation

Last, but not least (we needed to hit the other shining sea), Sign on San Diego is reporting the arrest of three people in Burbank, California. They were posing as Red Cross Workers and soliciting donations.

This story doesn't have anything to do with fraud, but to me it shows a total lack of justice, as well as, common decency by the New Orleans Police. A 73 year old grandmother was arrested for allegedly "looting" food from a Deli. She had taken about $65.00 worth of food to survive. The bottom line is that the food was going to spoil and I'm sure the Deli intends to file an insurance claim.

The woman was finally released after some attorneys took her case pro bono (free). Despite their assistance, this 73 year old woman was imprisoned in a correctional facility for sixteen days.

So far as looting, there were people stealing firearms, which were used to commit violent crimes and disrupt the rescue effort. It amazes me that given the problems the day after Katrina, the New Orleans Police were guarding a Deli. This is shameful and they should be held accountable for their actions!

On a lighter note, she would have probably been in real trouble if she had been caught "looting" a Donut shop.

There were also reports of the Police looting in New Orleans. Over the years, there have been numerous reports of corruption and abuses within this department.

Here is an article reporting Police involvement in the looting:

For the story from Yahoo, click on the title of this post.

Friday, September 16, 2005

He Wanted to Hack a Hilton

The teenager from Massachutetts, who allegedly admitted to hacking Paris Hilton's cell phone has been sentenced to eleven months in a juvenile facility. He was also found guilty of other misdeeds, such as making bomb threats and hacking into records of at least one Internet Service Provider.

The identity of the teen will not be revealed because he is a juvenile.

The original reports in the media stated there were several people involved in the hacking incident made infamous by Paris's cell phone. Confidential sources, who provided information to the Washington Post, stated that they tricked a T Mobile employee into providing proprietary information about T Mobile's systems. The group was then able to change the passwords of accounts and take them over. For the original story by the Washington Post, click on the title of this post.

The Washington Post admits in the article that they couldn't verify a lot of the information, however it does appear some tangible evidence was presented to them.

What the article does expose is that a lot of times (hacking), often perceived as highly technical is often accomplished with what is described as "social engineering", or in plainer language, "a good old fashioned con."

We are probably seeing one juvenile, who allegedly was part of a larger group caught and made an example of. Hacking, which often leads to financial crimes, is attractive to criminals of all types because they are unlikely to get caught and the penalties are light. Quite often, even when the crooks are identified, a victim with less clout than a Hilton has a hard time finding any law enforcement agency willing to pursue their case. One of the problems facing law enforcement is the fact that these crimes normally cross numerous juridictions, often involving international borders.

Paris Hilton's cell phone being hacked, which revealed a lot of personal information on other celebrities might seem trivial to some; however it is indicative of a larger problem. In the end, awareness seems to be the most effective protection. Perhaps the media attention given to this because it involved Paris will serve to educate more people?

Monday, September 12, 2005

Katrina Fraud Status

As the Gulf Coast starts to make progress in creating a sense of normalcy, it is apparent that the cyberscum of the world are still doing their very best to profit from the misery of others. With all the reports of fraud out there, I decided to put together a summary of what I see going on.

According to an article from SAP INFO, Christopher Faulkner of CI Host revealed that more than 1,000 domain names have been registered for Katrina and that a lot of them are either being used to set up malicious websites, or being auctioned off for as much as $50,000.00.

I wonder if any of the auction proceeds will go to the victims? I would like think so, but it's probably not very likely.

Here are some other interesting items that Faulkner says are going on:

"One particular type of spam, called fee-based spam, details information about private organizations claiming to have "rescue teams" based in Alabama, Mississippi and Louisiana. For a fee that ranges from $500 to $1,000, they would deploy their people on-site to locate lost loved ones, Faulkner said. "But they don't do anything, but take the money and run."

"Internet service providers and Web-hosting companies have taken down some of the malicious Web sites, including, and"

"CI Host has been conducting spam filter testing for Katrina-related spam e-mails and phishing activities for its 220,000-hosted Web sites. The company has been blocking between 8,000 and 10,000 Katrina-related spam or phishing e-mails per hour."

In another story from the AP, three people in a shelter in Laurel, Mississippi were caught posing as FEMA personnel. While posing as FEMA personnel, they were gathering people's personal information to use in identity theft. According to Sheriff (Larry Dykes), they will be held without bail because they are considered a flight risk. Sounds like a Sheriff, I would vote for!

Here is another updated statistic. On a post, I did a few days ago the FBI was saying there were 2300 sites related to Katrina. They are now saying there are 4,000 sites. In both estimates, they stated that 60 percent of them are coming from overseas, which is a sign that they could be fraudulent.

Please note that earlier in this post, Christopher Faulkner stated 1,000 domain names had been registered. With the FBI's report that there are now 4,000 sites, I'm not sure if Faulkner was referring to domain names registered in the United States, while the FBI was saying the number of worldwide sites? In the end, it's possible that this activity is so growing so rapidly that we are seeing conflicting reports and statistics. It will be interesting to see the final numbers.

Before I sign off, it was announced by the Red Cross (Mary Elcano, General Counsel) that they have hired a security company to monitor fraud activity related to Katrina. Any fraud they discover will be turned over to the Justice Department and the Red Cross might also seek civil damages (restitution) against those who try to wrongfully profit from this disaster.

The story from SAP INFO can be viewed by clicking on the title of this post.

Here is another post I did on people stealing FEMA uniforms and identification to commit robberies in New Orleans:

Sunday, September 11, 2005

Internet Service Providers and Spam

Steve Linford, founded the The Spamhaus Project, which is an international organization based in Great Britain dedicated to fighting Spam. Interestingly enough, he started out as a musician and has worked with Pink Floyd and Michael Jackson. After doing this, he started a small computer company and became sickened at the amount of Spam, he was seeing. Because of this, Steve founded the Spamhaus Project, which is dedicated to fighting Spam.

The Spamhaus Project also provides filtering services all over the world to prevent SPAM from reaching our mailboxes.

Spamhaus recently alleged that ISPs (Internet Service Providers) are knowingly profiting from Spam. The United Nations estimates that the current cost of dealing with Spam is 25 billion dollars a year and Spamhaus estimates that it affects 75 percent of all e-mail addresses. To view the Spamhaus Top Ten worst havens for SPAM go to: Most of them are in the United States.

Recently, they did battle and won with MCI Worldcom over hosting Spam sites. There are also news reports quoting Spamhaus as saying Yahoo is hosting some of the sites (although it isn't clear if Yahoo is to blame) or whomever is registering the domains. You can view their report, along with updates, on the problems they noted with MCI Worldcom by clicking on the title of this post.

The Spammers are now using improved versions of stealth proxy spamming software, which could increase the number of e-mail addresses being affected to 95 percent by 2006. A lot of this is being done via botnets, which are networks of PCs that have been taken over and turned into proxies. Interestingly enough, a lot of these personal PCs were taken over by software viruses put in their computer via a Spam e-mail.

Recently, I did some posts on one of the most current cases out there, which is the Zotob Case. For those who are interested this post goes into more detail on how botnets work:

According to Spamhaus, the release of a commercial spam virus, known as SoBig and it's subsequent variants have been infecting 80,000 to 100,000 PC's daily. In "spammer supermarkets" hosted in China, Russia and Florida, the spam gangs sell lists of fresh proxies (infected PCs). They also communicate with each other about techniques and which networks will turn a blind eye on their activities.

Two of the programs used to send this Spam were written by two Russians (Ruslan Ibragimov and Alexey Panov). They are known as "Send Safe and Direct Mail Sender." Both of these programs are designed to hijack 3rd Party computers to be used in illegal anonymous spamming. Coincidentally, whenever they release a new version of these programs, new versions of the "SoBig" virus begin appearing.

Spam is known to market things that are illegal. In addition to this, the proxy networks, or botnets support illegal activity. These activities include child porn, illegal drug sales and financial crimes. ISPs shouldn't tolerate any behavior associated with this and should be actively preventing it. They should be protecting their customers and other people, who might become victims as a result of Spam.

From a social perspective, it's time for ISPs to realize that it is unacceptable to turn a blind eye in their dealings relevant to this activity. Quite simply, there needs to be a zero tolerance attitude developed in dealing with this.

Laws are being enacted worldwide and many of them can be viewed on Spamhaus's website.

To report SPAM and for free filtering options, here is a good site(Spamcop):

For a previous post, I did on cybernasties and (legislation being proposed to make them illegal) go to:

There are links on the post listed above to contact your political representatives in the United States and Great Britain. To make changes in the world, we need to create laws to deal with these menaces and enforce them aggressively.

Saturday, September 10, 2005

Fraud Relating to Katrina in Full Swing

As predicted, the cyberscum element is jumping on the fraud band wagon in the wake of the Katrina disaster. According to Louis Reigel (FBI assistant director Cybercrimes), "There were roughly 2,300 Katrina-related sites by midday Thursday. The number had more than doubled just since Tuesday. New sites are popping up faster than we can pound them down. The number of sites and the money being donated already exceeds what the FBI saw following the tsunami."

Before I move on with this post, you can help the FBI deal with cyberscum by reporting suspicious activity on line at the Internet Fraud Complaint Center. Although, you are unlikely to get a reply, or find out what happens due to the confidential nature of criminal investigations, the information can be valuable intelligence to the authorities.

In fact, U.S. Attorney General Alberto R. Gonzales has announced that they will form the "Hurricane Katrina Fraud Task Force." The task force will be run by Assistant Attorney General Alice Fisher and will include resources several agencies including the Postal Inspectors, FBI and Federal Trade Commission.

Of the roughly 2300 suspected sites, the FBI has only been able to look at 800 of them. The majority of them (60 percent) are international. Please note that not all of these are fraud related, but many will probably prove to be scam sites.

Here is a story that hit the press about someone, who was already caught. Matthew Schmeider of Pittsburgh, Pennsylvania sent out thousands of SPAM e-mails from the phony international aid group dubbed "Mercy Corps." When he was caught, he admitted he was going to use some of the money himself, but of course, he also intended to send some of it to legitimate charities. Schmeider had only received $150.00 in donations when he was confronted by the authorities.

As I have said in previous posts, the best way to a donation is directly to charities that are recognized as legitimate. There are third party entities that solicit, but if you give to them, they take a cut of the proceeds for their efforts. There is a previous post I did, which has a lot of resources on legitimate charities and how to check out if any charity is legitimate:

On the State level, Florida and Missouri are already taking action. The Florida Attorney General (Charlie Crist) filed a civil lawsuit against a Robert Moneyhan for allegedly creating several Katrina related sites, which were not legitimate charitable operations. Missouri's Attorney General (Jay Nixon) has also filed against a man in St. Louis (Frank Weltner) for similar reasons.

The level of activity being reported is astronomical and seems to be everything from Spam marketing scams for sexual aids to phishing and pharming activity related to financial and identity theft. Security experts are also warning that "cybernasties" (trojans, malware, spyware etc.) are being embedded in pictures of the disaster sent out on Spam e-mails. Best bet is to not open anything with pictures and never download anything that is suspicious.

Here is a link to a page from Scambusters (which is highly recommended) on a lot of the Katrina Scams:

Friday, September 09, 2005

Getting Revenge on Phishers

Recently, I was contacted by Robin Grimes, who has launched a site: Many of us receive numerous phishing e-mails daily, which can be extremely annoying. On Robin's site, you can submit a URL and the phisher will receive fake entries over and over again. The site describes how to (hover) over a link, or click (copy and paste) to get it's true URL, which you can then submit on the site. With malicious internet activity on the rise, I recommend using the "hovering" method versus actually opening anything on your computer by clicking on it.

More and more sites are showing up where you can catch all kinds of nasty software that can be used to steal personal and financial information. Viruses (malware, spyware, worms, etc.) are also known to be passed via attachments on e-mail. There are a lot of posts on my site about this, but here is a link to one that might be helpful:

Please note that this is one of many posts dedicated to this activity and I have a search box at the top if anyone cares to research it further.

Here is another post, I did on other sites that fight fraud and phishing by harrassing our friendly fraudster community:

Artists against 419 and the Ebola Monkey Man are pretty interesting. I hear that the lads (dudes), who run Artists against 419 are shutting down fake sites on a consistent basis.

Again, a lot of these activities will serve to frustrate the internet fraudster, but it is prudent to be extremely careful given the people you might be dealing with. I wouldn't actually open any attachments, or go to a site where you might jeopardize yourself. I would also highly recommend that if you choose to engage in any of this activity that you ensure the protection on your computer is top notch and up to date.

As always, I have to strongly recommend that any suspected internet crimes be reported to the authorities. Here is a site from Anthony Elsop, which contains resources to report fraud over a wide spectrum:

Robin has joined our small community of people, who are sick and tired of this activity and want to do something about it. I welcome him to the effort!

Wednesday, September 07, 2005

Advance Fee Scams with Katrina

It was a matter of time, but the Advance Fee a.k.a. (419) scams have started using the Katrina disaster. 419 is the penal code in Nigeria for the advance fee scam. This scam involves tricking someone to pay an advance fee for untold riches they will receive at a later date.

In urban legend, the scam is Nigerian based; however it is now being done all over the world. These scams have not only been traced to Nigeria and Western Africa, but also to Europe, Canada, Australia and even within the United States. Historically, it would be a letter, or e-mail sent from a foreign prince etc., who had a lot of money that he was willing to share with you for passing it through your account. Besides tricking someone into sending money, if they got enough of your account information, they would wipe out the balance.

More recently, the scam has mutated into getting someone to think they have won a lottery, or that someone wants to buy something they placed on a auction. I have even seen a variation where they are approached by a (alleged) beautiful foreign model on a dating site, who needs their help to negotiate some financial instruments. In the end, the victim is duped into sending money and is left at a loss. This can be severe if they have negotiated a lot of money for them. In these more recent mutations, the fraudsters are sending counterfeit cashiers checks (cheques) and counterfeit money orders and duping their victim into to cashing them and wiring the money back. In a lot of instances, the items are intitally cashed and discovered to be counterfeit after the money has been wired (normally overseas).

For the person, who cashes these items, at a minumum they are financially liable. There are reports that people have had criminal charges brought against them as a result of passing the instruments.

Besides getting people to send them money in advance these criminals are very adept at stealing personal and financial information. This might include invading a computer if someone opens an attachment and using software to obtain what they need to do their misdeeds. The best thing to do is avoid these people like the plague.

Right after the Tsunami disaster and London bombings, the letters surfaced and today it is being reported that Katrina is being used in yet another variation. In an article from Gregg Keizer, it was reported that a letter is being circulated from an illegal Mexican national, who has discovered hidden treasure (boxes full of currency).

It amazes me that this variation still is out there despite all the publicity it has drawn.

Of more concern will be the phishing and pharming activity, which I wrote a previous post on:

In this post, I've listed recommendations from the FBI (who is noting a lot of sites being registered for Katrina) on how to avoid becoming a victim. In case you are interested on more detailed information on this scam and variations thereof, feel free to use the search box by keyword located at the top of the page.

Tuesday, September 06, 2005

FTC Publishes Telemarketing Fraud Legal Actions

In case anyone is interested the Federal Trade Commission is publishing it's results detailing their actions against telemarketing fraud on a new web site.

The FTC gathers a lot of data, which is available to law enforcement, including data on internet crimes, fraud in general and in particular identity theft.

For the main website, which has a lot of legal and political resources available, go to:

There is also a place to file any complaint you might have regarding fraud. They also sponsor the Do Not Call registry, which is a good start in avoiding telemarketing fraud and the pains associated with receiving unwanted calls!

Monday, September 05, 2005

Katrina Commission

This weekend, I've been blogging for Katrina. Since this blog is primarily about fraud, I've tried to cover issues relevant to the subject matter I write about. Since most of the fraud is yet to come, I'm stepping outside my normal subject matter for the time being.

Please note until the people are safe, we should be focused on that task. There is nothing more important than people. Even before we are very far in this crisis (which took a large public outcry to speed up government resources) when history is written, many opportunities will be revealed.

As a former Marine, I kept expecting to see the Marines from Camp Lejeune, as well as, the 82nd Airborne from Fort Bragg dispatched to deal with this crisis. Having been stationed at Camp Lejeune and having done joint exercises with the 82nd Airborne, I am acutely aware that they probably could have had their lead elements in place within hours.

Several days into it, after a lot of public outcry, our Commander in Chief dispatched these elements (along with sister elements from Kentucky and California) and guess what? Their lead elements were in place within a few hours. If we were having problems mobilizing the National Guard, which isn't intended to be a "force in readiness", other options should have been considered.

Perhaps fewer would have been murdered and raped if they knew they were going to face an armed Soldier, or Marine? After all, the individuals, who took advantage of the confusion and mayhem, were not the heroes and in fact, I would deem them low-life cowards. There is no doubt that the people in certain areas in the aftermath of Katrina faced situations that parallel any combat situation, we have faced in recent history.

This isn't meant to downplay the brave men and women in the thick of the crisis, who tried to do their best in spite of the overwhelming odds. They performed in an admirable manner and deserve the respect and thanks of the nation for their efforts. I would vote to recognize the Coast Guard, who are some of the real heroes who came out of this. They set all time records, worked without rest and saved a lot of people in spite of odds that were against them. There are other people that need recognition also. This includes the doctors, nurses, fire fighters, police, private citizens and other emergency personnel that didn't evacuate to save human lives.

There were a lot of good people on the ground and they had to been wondering when their relief would arrive.

We cannot change history and we must remain focused on dealing with the human perspective of this crisis, but at a later date, we will need to learn from our mistakes. Perhaps, the politically correct society, where every job is segmented and restricted is to blame? There are many saying that there were too many chiefs, with differing views of their responsibility and no one wanted to step on each other's toes? This is a sad commentary on our society today and at some point, we must deal with it. In any crisis, the keywords must be improvisation and adaptation if we are to emerge in a good light.

Some are also saying that our lack of response was due to racism. While possible, I would offer a opinion that it in the end, it probably had more to do with their financial status, or that they were poor. Sadly, money talks in our society and it can do wonders for those who have it, no matter what race they are. Whether it was racisim, money or a combination of the two, this is sonething that most Americans do not tolerate and isn't in the nature of our collective being.

About four hours ago, Senator Hillary Clinton called for a Katrina Commission. I would call for all our politicians to join her in a bipartisan effort to examine and evaluate what went wrong in this crisis. In the world that we live in today, our very survival might depend on it. Now is the time to forget our differences and focus on our similarities, which is that we are all Americans and part of what many consider the greatest society today.

After all, might the established protocols (based on bickering and pettiness) have caused the failures exposed in the Katrina crisis? Bashing each other (depending on which end of the political area we are on) will solve nothing and will only lead to further breakdowns, which will prevent us from learning from our mistakes.

2Search Promotes Spy/Adware via Deception

Webroot (which is a well respected computer security company) has discovered that "2Search" misdirects users to site that download spy/adware on your system. Apparently, they are able to produce fake "Google" results, which normally lead to "e-Bay" listings (often found on Google results). Quite often, these results if "clicked" upon lead to more spy/adware being downloaded on your computer.

According to Webroot, the reason they are doing this is that it conceals the fact that you are downloading spy/adware. Spy software is becoming big business, generating about $2.4 billion in annual revenue, per a report issued last week by Webroot.

Here is a link describing the difference between spyware and adware from Webopedia.

The Difference Between Adware & Spyware

The differences are minimal and we need to examine this problem from a social perspective. The line between the so-called legitimate uses for business and criminal enterprises is relatively small. Both are invading our privacy and shouldn't be considered legitimate in any form!

Here is a link to a site from the Center for Democracy and Technology listing the current legislation against spy/adware:

I also recommend for those of us, who want changes in the laws to call your representative. Installing spy devices in personal domains is a fundamental violation of our right to privacy.

For those, who might not have protection, Spybot is free and can be downloaded at:

If you wish to purchase products from Webroot, click on the title of this post.

Sunday, September 04, 2005

Gouging at the Pump

For quite some time, gas prices have gotten higher for the consumer. Within the same time frame, oil companies have been making record profits. In the wake of Katrina, fuel prices rose before any new (more expensive) shipments arrived. This lead to speculation that some were taking advantage of the situation (gouging).

I read an interesting article from Karen Pierog of Reuters that some of our elected representatives are taking action.

Here are a list of recent actions in some states cited by the article:

"California launched a probe of gas price hikes and state Attorney General Bill Lockyer said he will subpoena refiners' records and threatened to prosecute profiteers.

The federal government responded by releasing 900,000 barrels a day of stockpiled crude, temporarily relaxed fuel standards and asked for emergency international supplies -- moves aimed at mitigating price run-ups and potential fuel shortages.

Ohio Attorney General Jim Petro put the state's petroleum council, gasoline marketers and convenience stores on notice, asking them to justify price hikes.

Hawaii on Thursday became the first state to impose limits on gas prices since the energy crisis of the 1970s. The state will set weekly caps on wholesale gasoline prices for different regions of the islands.

Georgia Gov. Sonny Perdue on Friday signed an executive order suspending the state's 7.5 cent-per-gallon motor fuel tax through the end of September. The move must be ratified by the legislature.

New York City, City Council Speaker Gifford Miller and others asked Friday for state authority to set a flat, per gallon tax rate to ease gas prices that have jumped over $3.50 per gallon.

Democrats in the Oklahoma legislature proposed suspending the state's gas tax for the rest of the year, saving drivers 17 cents per gallon, or $1 million a day.

Connecticut Gov. M. Jodi Rell has raised the possibility of a temporary suspension of the gross receipts tax on gasoline.

In Ohio, House Speaker Jon Husted said he will push legislation for more widespread use of alternative fuels such as biodiesel and ethanol.

Wisconsin Gov. Jim Doyle called on the legislature to pass a bill ensuring gas sold in his state will contain 10 percent ethanol."

We've known since the 70s that it might be a good idea to develop alternative energy sources. The time to do so is now and stop allowing our destiny to be controlled by foreign entities and large corporations that seem to be making more money than ever.

As concerned citizens, we can also reduce our personal consumption of oil products. There are many ways to do this. Here is a link to an article on ways to reduce your consumption of gas:

So far as the gougers, I recommend contacting your attorney general with any business you suspect of gouging. Now might be a opportune time to send a message to those who decide to take advantage of other's misfortunes.

For the article by Karen Pierog, click on the title of this post.

Being Prudent in Donating Money (Katrina)

Here is information on how to give directly to organizations involved in the Katrina Relief Effort. Going through a third party can lead to fraud, or at the very least all of your money may not reach it's intended purpose. Third party fund raising organizations often pay people to solicit and take a cut of the proceeds.

The FBI is warning about fraudulent spoofing, phishing and pharming activity already associated with Katrina. For more information, here is a previous post, I did:

If you give on line, which is a great way, please ensure that the URL (http://) is correct. A common ploy in fraud is to alter the URL and impersonate a recognized and trusted name.

Also, please note, I have a donation box on my blog. This is to support the site and is sometimes used to help victims, who solicit my assistance. Please do not donate any money for Katrina here.

Here is a list, along with proper URL's and some telephone numbers, of organizations that are directly involved in the Katrina Relief Effort.

The United Way,, 800 272-4630.

American Red Cross,, 800-HELP-NOW

Salvation Army,, 800-SAL-ARMY

Network for Good,

Habitat for Humanity,, 800-HABITAT.

Samaritan’s Purse,, 800 665-2843.

Save the Children,, 800 728-3843.

Humane Society of America,, 888 259-5431.

Feed the Children,, 800-525-7575.

America’s Second Harvest,, 800 771-2303.

Craig's List is also doing an outstanding job in getting the information out to help the victims. Here is a link with more resources and recognized charities:

Here are three resources, one can use to check the validity of any organization soliciting donations for Katrina.

Better Business Bureau Wise Giving Alliance,

Charity Navigator,

American Institute for Philanthropy,

Also, here is another post I did with information from the FTC (Federal Trade Commission) on how to give wisely and ensure the money get's to the right place.

As always, if you suspect fraud, please report it. Here is a site linked to the FBI, where you can do so:

Saturday, September 03, 2005

FBI Reports Fraudulent Activity on Internet Related to Hurricane Katrina

On September 1st, the FBI issued a warning after noting a lot of sites soliciting for charitable donations for the victims of Hurricane Katrina. It is expected that we will see a lot of SPAM e-mails regarding this subject popping up in our inboxes also.

Some of the websites and SPAM could lead to phishing and pharming activity related to identity theft. Of course, they might also lead to charity fraud, or even a combination of both activities.

Here are their recommendations:

• Do not respond to any unsolicited (SPAM) incoming e-mails.
• To ensure contributions to U.S. based non-profit organizations are used for intended purposes, go directly to recognized charities and aid organization’s websites, as opposed to following a link to another site.
• Attempt to verify the legitimacy of non-profit organizations by utilizing various Internet-based resources which may assist in confirming the existence of the organization, as well as its non-profit status.
• Be leery of e-mails claiming to show pictures of the disaster areas in attached files, as the files may contain viruses. Only open attachments from known senders.

If you note any of this activity, please report it at

The victims of Katrina deserve and need our help. It's unfortunate that this disaster has brought out the bad in many people. It is up to all of us to ensure that every dollar donated helps the poor souls, who have suffered a terrible disaster in their lives.

Here is another FBI Alert on the London Bombings. As was done after the Tsumani disaster, the Advance Fee (419) scammers were soliciting for people to claim money for a person who perished in the bombings.

Here is a link to the alert:

Unfortunately, if they haven't started already, I'm sure the Advance Fee (419) scammers will develop a scam for Katrina also.

To view the FBI Alert on Katrina, click on the title of this post.

Ensuring the Katrina Victims Receive Your Money

If Katrina is like other disasters, there will be people trying to take advantage of the situation (commit fraud). One method they use is to solicit donations for phony charities. The people there need your help. I am posting this in the hope that we can get as much to them as quickly as possible without any of our hard earned money lining the pockets of unscrupulous fiends.

The FTC has already addressed this issue and has some helpful tips. Here they are:

"Donate to recognized charities you have given to before. Watch out for charities that have sprung up overnight. They may be well-meaning, but lack the infrastructure to provide assistance. And be wary of charities with names that sound like familiar, or nationally known organizations. Some phony charities use names that sound or look like those of respected, legitimate organizations.

Give directly to the charity, not the solicitors for the charity. Solicitors take a portion of the proceeds to cover their costs, which leaves less for victim assistance.

Do not provide personal or financial information, including your Social Security number or credit card and bank account numbers to anyone who solicits from you. Scam artists use this information to commit fraud against you.

Check out any charities before you donate. Contact the Better Business Bureaus Wise Giving Alliance at

Do not give or send cash. For security and tax record purposes, contribute by check or credit card. Write the official name of the charity on your check. You can contribute safely online through national charities like"

Ask for identification if you are approached in person. Many states require paid fundraisers to identify themselves as such and to name the charity for which they are soliciting.

Should you suspect fraud, report it to the authorities. You can file a report directly with the FTC at

The people on the Gulf Coast need and deserve every penny they can get. By contributing wisely, we can ensure they do!

For the FTC Alert on this, click on the title of this post.

Robbers Posing as FEMA Personnel

Like everyone else, I have been dismayed at the problems created in the wake of Katrina. Disasters bring out the best and the worst in people. Unfortunately, in this case, we have seen far too much of the worst.

On Saturday, the Federal Emergency Management Agency, or FEMA disclosed that their uniforms, letterhead and badges have been stolen in New Orleans and robbers are using them to commit their foul deeds.

Reports indicate that these robbers are identifying themselves as procurement officers to commit their misdeeds (robberies) and are sometimes armed. Note that real FEMA personnel are never armed.

To verify FEMA personnel, or report suspicious activity, please call their offices in Baton Rouge at 225-296-3421, or 225-296-3335.

For the FEMA website, click on the title of this post.