Lawyers conned in job scam on CraigsList

Quite often, fraud victims don't want to go public with what happened to them. In my limited experience, this can be especially true -- when dealing with victims -- who hold prestigious credentials.

Fortunately, not all of them remain silent, and by speaking out, they protect others from becoming victims of the same thing that happened to them.

Here is a story by Arin Greenwood, an attorney -- who was the victim of what seems to be one of the more sophisticated job scams -- I've read about:

This is the story in which you learn how a graduate of Columbia Law School—that’s me—and almost 80 other people, who really should have known better, got suckered into giving away all our personal details as well as up to two months of our lives for “jobs” that never actually existed. And then you learn why it all happened the way it did.

How I Got Involved With The Scam

An intriguing Craigslist job ad turned up on June 21 of this year at a time when I was feeling particularly bleak. I had spent the better part of that morning losing at online Scrabble and wondering if I had enough money to get a small falafel for lunch.

Apparently -- Arin wasn't the only highly educated person taken in on this pretty elaborate job scam, which originated, where a lot of job scams do -- on Craigslist:

This lack of information was disquieting, but the Global Speculator team was reassuring: lawyers, researchers, writers, computer programmers, designers, administrators, executive assistants, and the one mathematician named Kermit, some of whom had been working since early June, when I first saw the Craigslist ad. And I trusted the wisdom of the group: There were almost 80 people working on this project. That is a lot of people, too many for everyone to be as silly and desperate as me. Surely someone in the group had a good reason to be there, and I thought I’d ride along on their coattails. Plus, one of my new co-workers was, it turned out, someone I’d worked with on Saipan, and I marveled at this reassuring coincidence; I knew this guy was smart, and if he was willing to believe that this was a legitimate enterprise then perhaps it really was. Unfortunately, I think he might have applied some of that reasoning to me.

In the end, no one is really certain what the intent was in committing this scam. If anyone wants to speculate, feel free to leave a comment at the bottom of this post.

One of the speculations made from several of the people (who were scammed) was that this was part of an elaborate fraudulent investment scheme.

Arin Greenwood's story (courtesy of the Washington City Paper), here.

Michael Webster -- a noted attorney in Toronto, I've written about in the past -- writes about the importance of performing due diligence when making an investment. In this case, the people scammed certainly invested a lot of their expert time.

He has a very interesting and educational website that covers "due diligence," which I highly recommend reading.

Investment scams can be highly complex and the scammers can often appear to be pretty influential. Right now -- there is a lot of furor, over a person by the name of Norman Hsu -- who allegedly ran some pretty high dollar investment scams. The reason for all the furor is Mr. Hsu was making large political contributions to certain candidates.

Michael wrote an interesting article about the Norman Hsu phenomenon, here.

On a closing note, Arin should be commended for writing about what happened to her. Too many victims of fraud would prefer not to say anything about it -- and when they don't -- they make it easier for the fraudsters behind the schemes to continue victimizing people.

Awareness and communication are the probably the most effective tool against fraud.

Job scams are becoming more and more common, another good resource to learn more about this problem is at the World Privacy Forum's job scam page.

Monster.com might be sending you a letter that your information was compromised

Photo courtesy of shane_allen at Flickr

If you posted your information for a job on Monster.com, you might be getting a letter notifying you that your personal details have been compromised:

Joseph Menn, Los Angeles Times is reporting:

Monster.com said Thursday that 1.3 million users had personal information stolen by criminals who hacked into the job-placement website. The company said it would warn each of the victims by mail.

Monster parent Monster Worldwide Inc. said it identified the victims after analyzing the data found this week by computer security firm Symantec Corp., which had estimated that hundreds of thousands of people were at risk.

In this latest data breach, it is being reported that only names, addresses and e-mail addresses were stolen. This information will likely be used to lure potential job candidates into what are known as job scams.

In a job scam, a person is recruited into cashing bogus financial instruments, or laundering the proceeds of Internet crime. In most instances, these bogus employers will request a lot of personal and financial information (supposedly to vet the new employee)and this is probably where someone would put themselves at a real risk of becoming an identity theft victim.

The LA Times article also stated:

Also Thursday, some Monster users said they had received such e-mails as far back as February.

Since job scams are nothing new and Monster isn't the only site, where scammers gather information to lure people into doing their dirty work, it's very possible that the current data breach has nothing to do with the e-mails going as far back as February.

I've seen these types of e-mails going back a lot further that February.

Here is a previous post, I did with an emphasis on the social engineering aspects of job scams:

Internet criminals stealing information from job sites isn't anything new!

LA Times article, here.

Too good to be true employment opportunities

Patrick Jordan (Sunbelt blog) did a nice post about a huge problem that frequently occurs on the dark-side of the Internet.

The problem, I'm referring to is people being recruited (some might say duped) to assume the risk involved in collecting the proceeds of Internet crime.

With all the fraud occuring on auction and e-commerce sites -- criminals need a way to move they money they are stealing. This activity is often referred to as money laundering.

They accomplish this with money transfer scams, which are sometimes referred to as job scams.

These scams are nothing more than a way to trick people into negotiating bogus financial instruments, or launder the proceeds of auction fraud!

We've all probably seen a spam e-mail, or two (I get several daily) with job offers that seem a little too good to be true. Most of these jobs seek a financial representative to handle payments for a foreign company. In reality -- the person is moving stolen money overseas -- where it disappears into thin air.

Besides being offered in spam e-mails, people are also recruited off job sites and sometimes even from the classifed sections of newspapers and magazines.

A sister scam to money transfer scams is referred to as a reshipping scam. The difference is in this job a person reships hot merchandise (normally from auction sites) to their bosses.

In most of these scams, they prefer you use Western Union or MoneyGram to send them their money. Once the money is picked any efforts to recover it will most likely be useless. Please note that there are many e-cash venues that are used, also.

While these jobs might have fancy titles, a lot of people refer to someone doing this as a "mule."


(courtesy of mattcoz at Flickr)

In Patrick's post, he reveals another twist to this activity, which are websites set-up to make these jobs appear to be legitimate.

Here is a screen shot (courtesy of the Sunbelt blog) of the site Patrick discovered:



He also lists some other sites to avoid from the same IP in his post, which can be seen, here.

Most of these scams are pretty easy to discover because they are offering too much money for too little work.

These job offers are nothing more than a way for criminals to get other people to take all the risk, while they reap the rewards of their illegal efforts!

Besides facing almost certain financial ruin, some of these employees are ending up living in new digs:

Internet criminals stealing information from job sites isn't anything new!

The recent reports about 1.3 million Monster users having their information stolen from the job site has become somewhat of a major news story. While this seems shocking, the truth is that job sites have been targeted for the information they contain, or to recruit people to commit crimes (sometimes unknowingly) for quite awhile now.

Jim Finkle at Retuers (courtesy of the Washington Post) recently covered this story:

Monster.com waited five days to tell its users about a security breach that resulted in the theft of confidential information from some 1.3 million job seekers, a company executive told Reuters on Thursday.

Hackers broke into the U.S. online recruitment site's password-protected resume library using credentials that Monster Worldwide Inc said were stolen from its clients, in one of the biggest Internet security breaches in recent memory.

They launched the attack using two servers at a Web-hosting company in Ukraine and a group of personal computers that the hackers controlled after infecting them with a malicious software program known as Infostealer.Monstres, said Patrick Manzo, vice president of compliance and fraud prevention for Monster, in a phone interview.

Symantec -- who broke the story has published some of the examples of the fake job offers being sent to people -- posting their resumes on Monster, here.

People can protect themselves by being aware of the social engineering aspects of these scams. The job offers are always too good to be true and normally don't make very much sense.

Most of them are ploys to either cash bogus financial instruments, or launder the proceeds of Internet crime. Another red flag is that the employee is solicited to wire money, normally across a International border.

The employee (victim) then ends up financially liable, and in some instances, can even end up facing criminal charges. In most areas, cashing bogus financial instruments and money laundering is considered a crime.

The scammers, who offer these jobs intend to get someone else to take all the risk for them, while they reap most of the financial rewards.

Monster isn't the only place, where this happens. The risk is there on just about any of the Internet job sites, including Craigslist.

If you use these sites, it's a good idea to verify, who you are talking to before accepting a job offer.

The Privacy Rights Clearinghouse has an excellent page about job scams on their website, here.

Because these fake employers gather their victims's personal and financial information, they are likely to become an identity theft victim, also.

The page on the Privacy Right Clearinghouse site gives good advice on how to deal with this, also.

The good news is these scams are pretty easy to spot and a little awareness can prevent them from happening altogether.

Reuters story (courtesy of the Washington Post), here.

Counterfeit Visa Travelers Cheques in circulation!

Counterfeit financial instruments are circulated in a variety of Internet scams. The ploy is always to get someone to cash them and then wire the money back to the person behind the scam.

In the past couple of weeks, readers and other sources have brought to my attention that counterfeit Visa Travelers Cheques are in circulation.

Visa has provided resources to identify these instruments.

You can call them at 1-800-227-6811 to verify an item. This can also be done on-line, here.Visa also has a good interactive tool to identify the security features of the Visa Travelers Cheque, here.

The trick is to ALWAYS verify them before you negotiate them using your good name!

Some of the scams being used to trick people into cashing these items are known as work-at-home (job) scams, secret shopper, romance, lottery and auction scams.

A collective name for all of these scams that ask you to cash an item and send the money back to the scammer is called the advance fee (419) scam.

A lot of the sites dedicated to fighting scams are also seeing an alarming trend, which is that people are getting arrested for attempting to cash these items.

I recently had a conversation with the fine folks over at FraudAid about this trend.

A great (new) resource about all the counterfeit paper being circulated is FakeChecks.org.

People, who fall for these scams do so because they are lured with something that is too good to be true. The old saying is that if it is "too good to be true, it is NOT!"

Here are some other counterfeit instruments, I written about that are still in circulation:

Counterfeit MoneyGram Money Orders being passed via Internet Scams

Counterfeit Cashier's Checks Fuel Internet Crime

American Express Gift Cheques Being Circulated in Internet Scams

Counterfeit Postal Money Orders Showing Up in IScams Again

Here is a picture of counterfeit Visa Travelers Cheques that were sent to someone about a week ago. They were sent from the United Kingdom, however the scammer wanted the money wired to Nigeria.


(Photograph courtesy of Raleigh)

Increase in Scams Attributed to Economy

I just finished reading an interesting article in the Wall Street Journal by M. P. McQueen, which suggests that the bear market is creating a bull market for fraudsters. According to the numerous experts cited in the article, the reason for this is economic gloom and doom with a healthy dose of anxiety.

This shouldn't be surprising because gloom, doom, and anxiety make effective social engineering tools that can be used to part people and businesses from their money.

The article references phishing expeditions that lead to fake Web sites — which often spoof a financial institution or government entity — and entice people into giving up enough of their personal details to drain their financial resources. It also mentions that some of these sites leave behind malicious software on a person's machine, which steal all these details automatically.
Also mentioned is the use of VoIP (Voice over Internet Protocol), caller-ID spoofing and cell phone technology to mount texting and vishing attacks. Vishing is merely another method of tricking people to give up personal and financial information via the telephone. In these attacks, the caller ID is spoofed to make it appear as if it is coming from a legitimate institution.

Apparently telephone technology is being used to commit other types of crimes, too. Many of our 911 centers cannot identify spoofed calls coming from computers using VoIP technology. This has led to S.W.A.T. teams being tricked into deploying in full battle gear to residential neighborhoods when no emergency existed. Of course, businesses use the same technology to trick people who have caller ID into picking up their telephones. You can even buy a card to do this at will from any telephone right over the Web.

It sometimes amazes me how much irresponsible technology there is out there, which is being sold legally. There are even Web sites, with disclaimers, that specialize in making this technology available to the general public. Of course, there are also complete DIY (do-it-yourself) phishing kits being sold over the Internet. Some of these even come with tech support. The phishing kits are illegal, but can be found for sale in chat rooms if you know where to look for them. Sadly, the truth is that these chat rooms aren't very hard to find. The fine line between legitimate enterprise and scams is often a little blurry.

The WSJ article quotes a lot of experts, including Gartner, the FBI and the National White Collar Crime Center, who all seem to agree that scams are on the rise. An interesting phenomenon called out were small fraud charges being found on accounts. I guess taking small amounts, which might be mistaken for bank fees, is a good way to stay under the radar. A lot of people don't realize how many small fees are being charged to their account and it can be quite confusing at times. I guess the crooks are trying to make themselves look like bankers (speculation) and it's probably a good time for all of us to review our statements, carefully.

Speaking of fees, which are used as revenue streams by a lot of businesses, the WSJ put out another article this entitled, "In the Fight Against Bill Creep, Every Extra Fee Is the Enemy." Besides being on the look out for cyber scammers, this article points out other reasons it is smart to review our financial statements with a keen eye these days.

Another notable trend in the past 12 months is executives being targeted. In this trend, specific people within organizations are being targeted and tricked into downloading malicious software on machines. In one of these scams last April, the targets were led to believe they were being subpoenaed to testify in federal court.

Last, but not least, the article points out that job scams are on the rise. It's a well established fact that job sites from Monster to Craigslist have scammers operating on them to recruit people to launder money, cash bogus financial instruments or give up all their personal and financial information. Adding fuel to this fire, it was disclosed recently that Monster.com had been hacked.

Capping off this interesting article — which is a pretty good recap of recent scam activity — is Pam Dixon of the World Privacy Forum pointing out that scammers have learned how to use "spell check." In the past, one of the best ways to identify a scam was it's lack of proper spelling and grammar. While the scammers might have have learned to use spell check, it might also point out that there are more and more people out of work (with better grammar skills), who are becoming scammers.

The WSJ quoted a lot of experts that agree with them that scam activity is on the rise. Another interesting read supporting this (not mentioned in their article) is the recent report that was commissioned by McAfee. This report points to all the unsecured data out there that is fueling the rise in cyber crime. They estimate, at this point, that the financial implications have reached $1 trillion. They also have some interesting information about social engineering and how it is being currently used to commit scams in the current economic environment in another set of articles on their main site.

In my opinion, it makes sense that scams of all kinds are on the rise. There is a lot of confusion going on and people are getting desperate. It might be desperation that is causing more people to get involved in scams on both sides of the fence. For the majority of us, who just want to ride these times out and survive the mayhem, the best thing to probably do is be extra diligent in our financial matters and use a little good old fashioned common sense.

Having dealt with a few scammers in my life, I've found that most of them aren't the most intelligent people around. The best thing to do is to think carefully before jumping in anything of a financial nature these days.

From Russia With Cash?

Advance fee fraud (419) scams never seem to go away. They mutate into another form and move forward. The news media and internet trace these scams to shady internet cafes in Lagos (Nigeria), but there is a lot of evidence that Nigeria isn't the only place they comes from.

The latest version is a solicitation to make a "cool" $45 million for helping a jailed Russian Billionaire invest some money. Of course, the end result for anyone who gets involved in this is having your account cleaned out.

Here is the latest twist as reported by Alex Nicholson from the Associated Press:

"Russia has more in common with Nigeria these days than just oil. Following up on the politically charged jailing of oil tycoon Mikhail Khodorkovsky, a wave of scam e-mails in the style of Nigeria's notorious spammers have been popping up in inboxes from Moscow to Kentucky."

Here is the full story: Russian Tycoon Is Spammers' New Target.

We can't even blame Nigeria for inventing the scam. The evolution of Advance Fee started with letters from (allegedly) rich merchants during the middle ages AND "a rash of Russian Letters that appeared in the 1920s, with money supposedly needed to rescue people held by the Bolsheviks."

Here is another mutation of the scam that stereotypically, we blame on Russians:

The internet is full of stories of Russian Romance Scams, where men and women are duped into sending money to someone they meet in a chatroom, or dating site. If you were to talk to the people at Romance Scam 419 Yahoo Group (US), my guess is that they would tell you that the scams not only originate from Nigeria and Russia, but several other places, also.

With the evolution of the internet, scams inducing people to send money in advance of a promise (which never materializes) are becoming epidemic. The original letter scam has led to romance, lottery, auction, check cashing and job scams. Undoubtedly, it will continue to mutate into different varieties as new events occur and different things become popular.

They are also no longer exclusively from Nigeria and Russia, but can come from anywhere. Recently, Canada and the Netherlands seems to be fertile breeding grounds AND in the future, who knows?

The internet with it's borderless environment has caused an explosion in this activity. Furthermore, with computers and internet access becoming cheaper all the time, more are more potential victims are getting on-line daily.

The reason why this scam continues to work is that it plays on human emotion and recognizing that is key to teaching people how to avoid being victims.

"If it seems to good to be true, it isn't."

For a good resource on definitions on all the various mutations of Advance Fee, Wikipedia does a pretty good job in their Internet fraud section.

Here is another well put together page on Advance fee activity from Caslon Analytics (Australia): the 419 Scam: basis, statistics, regulation.

Will counterfeit Visa Traveler Cheques be the latest bogus financial instrument spread in Internet Scams?

(Photo courtesy of Flickr)

Counterfeit Visa Travelers Cheques -- so far seen in $500.00 denominations -- are starting to appear in different parts of the United States.

In the past few years, counterfeit U.S. Postal Money Orders, MoneyGram Money Orders, and American Express Gift Cheques have all been circulated by Internet fraud activity.

If history repeats itself, we will see counterfeit Visa Travelers Cheques show up outside the United States, also.

These instruments have been passed in a lot of work-at-home (job) scams. They are also passed in secret shopper, romance, lottery and auction scams.

These advance fee (419) type scams all have a common theme. A lure (scam) -- which plays on greed is offered to entice someone into cashing these items -- and wiring the money back to the fraudster behind the scheme.

The lure (scam) is always too good to be true and makes no sense.

Since it is against the law to pass a counterfeit financial instrument, people are sometimes arrested when they present these items. Even if they aren't arrested, they are held liable, when the fraud is discovered.

Unfortunately, banks often give credit to their customers on these items. Tellers have even told their customers the items are legitimate, which doesn't make any difference (for the customer) when they return. Of course, the bank isn't liable for any of this.

These items are also being presented to merchants. Retail criminals use them to purchase items, get the balance in cash, then refund the merchandise. Of course, if they are unable to refund the items, they will probably try to get gift cards or fence the merchandise. There is a lot of stolen merchandise being fenced (pretty easily) on Internet auction sites.

Intelligence indicates these many of these items are being printed overseas, then distributed in bulk, worldwide. Once received in bulk, they are broken down and distributed to the criminals, who then use them in the manners listed above.

Visa recommends that you do the following to verify if one of the Travelers Cheques are real:

Can you see a watermark in the cheque?

Can you see the holographic thread embedded in the cheque?

Is the customer present?

Have the cheques been countersigned in your presence?

Does the original signature match the countersignature?

Has valid identification been presented and the details recorded along with the customer name on the back of the cheques?

If you are suspicious, you can call them at 1-800-227-6811 to verify an item. This can also be done on-line, here.Visa also has a good interactive tool to identify the security features of the Visa Travelers Cheque, here.

Here are some of my previous posts on counterfeit instruments circulating via the Internet:

Counterfeit MoneyGram Money Orders being passed via Internet Scams

Counterfeit Cashier's Checks Fuel Internet Crime

American Express Gift Cheques Being Circulated in Internet Scams

Counterfeit Postal Money Orders Showing Up in IScams Again

Counterfeit Check (Cheque) Scams are all over the Internet

The amount of counterfeit checks (cheques) being circulated via various Internet scams, and even the classifieds (paper media) is on the rise.

A new trend is also being seen, where people are getting these counterfeits items in the mail (unsolicited). Some of us, who watch this closely, suspect they are data mining information off job sites, like Monster.com and Craigs List.

Last April, I did a post about a Better Business Bureau (BBB) employee, who got a lot of negative attention after she accepted a job to cash bogus intruments and send the money overseas.

Common scams in which these checks are sent for someone to cash and wire the money back to fraudsters are the check cashing (job), lottery, auction, secret shopper, romance and Nigerian letter varieties.

According to the National Consumers League, counterfeit checks schemes rank near the top of the scams reported to them by victims.

High quality counterfeit money orders and travelers/gift cheques are making the Internet fraud scene, also. In the recent past, these have included Postal Money Orders, Travelers Express (MoneyGram) Money Orders and most recently, American Express Gift Cheques.

The NCL has an interesting page on their site about the most prevalent scams reported to them in 2007, here.

And don't expect the bank to tell you (whether or not) a check is good. Since they have no liability in the matter, they will often say the item is good, give you provisional (temporary) credit, then take the money away from you when it is determined to be a fraud.

Here is a previous post about how this occurs:

Don't Trust a Bank to Tell You Whether a Check is Good, or Not

Some of these scams direct you to places like Walmart to cash the item, and wire the money back to them, also. I've had readers leave comments and send me e-mails about getting arrested after attempting to pass one of these items at Walmart.

Before we smear Walmart, consider that with the amount of these items in circulation, its getting harder and harder to determine, who is and who is not, really a victim.

Check fraudsters are now posing as victims, and are scamming the scammers by cashing the items. If they are caught, they claim to be innocent victims.

I've personally spoken to a few of these alleged victims, and for some reason; they never seem to have wired (or sent) any of the money back?

Interestingly enough, the scammers love to direct people to Walmart (probably because they cash checks and wire money), but they could care less if you get arrested.

The bottom line is that even if the check is initially considered good, it can easily return, and the person passing it is held responsible.

Deb Radcliff (cybercrime author) did an interesting blog post about how law enforcement, and the companies having their brands used on these checks aren't going after the cuplrits, here.

Unfortunately, they normally don't have much to go on, and the crime is normally initiated from a foreign country.

California Lottery Nails Dishonest Retailers

When you cash in a small lottery prize at a lottery retailer, the amount might not exactly what you were were entitled to receive.

On 7/1/08, the California Lottery announced that they are using undercover agents to sting dishonest retailers, who cheat lottery winners out of their prizes. The press release on this matter pointed to a case in Morgan Hill, California where a dishonest retailer (and another individual) are being charged with grand theft of lottery tickets ranging in value from $500 to $25,000.

I decided to see if I could find any additional information on arrests and discovered another one that was reported by cbs13.com in Lodi, California. CBS 13 in Sacramento, with cameras rolling, approached Baljut Kang (one of the two arrested in Lodi), who refused to talk at first. Eventually, Kang stated to the reporter that the undercover agents found "some ticket in the garbage," which made them think she and her son were committing fraud (?).

According to the article, an undercover agent turned in one ticket worth $990 receiving only $24. Another ticket was presented at the retailer worth $25,000 and the agent was paid $10 for it. The article also states that this was the result of a statewide lottery sting. Other retailers were caught in Southern California.

The official press release indicates that this is the first enforcement effort of this kind anywhere in the country. This made me wonder if other States should run sting operations, also?

While dishonest retailers getting caught cheating customers is something new, lottery scams are big business for criminals. Spam e-mails, unsolicited telephone calls and even snail mails are used to dupe people into thinking they have won the lottery. Frequently, a person is then asked to negotiate a fraudulent instrument to cover tariffs and taxes and wire the money across an International border.

The California lottery has an interesting page, which can be seen on their website warning the public about this type of activity. In February, I did a post on the eve of a $270 Mega Million Lottery prize, about fraudsters attempting to impersonate the California lottery to trick unsuspecting people into cashing worthless checks.

Please note that scams -- where unsuspecting people are duped into cashing worthless checks and wiring the money before the financial institution catches on -- aren't limited to the lottery variety. Other varieties involving bogus financial instruments include work-at-home (job) scams, secret shopper, romance and auction scams. Known bogus items in circulation are Postal Money Orders, Travelers Express (MoneyGram) Money Orders, American Express Gift Cheques and Visa Travelers Cheques. A good site to learn more about scams involving fake checks is FakeChecks.org.

In California when you claim a ticket for a prize under $600, the retailer has to validate it in a machine, which prints a receipt showing exactly how much the prize was for. A good idea is to make sure you take a look at this receipt to ensure you are getting the right amount of money.

If you note suspicious activity, I'm sure that the dedicated law enforcement personnel at the California Lottery would like to hear from you. They can be reached at 1-800-LOTTERY.

Are Internet Check Scam Artists staging a December Surge?

(Picture of counterfeit financial instruments recently intercepted in the mail by an International law enforcement task force)

In the past several days, I've noticed a surge in counterfeit check alerts from the FDIC (Federal Deposit Insurance Corporation). From December 19th to the 21st, the FDIC issued 26 alerts from various financial institutions throughout the United States reporting counterfeit activity using their information.

These checks are used in all the different varieties of overpayment scams. The basic MO (method of operation) in these scams is to trick someone into negotiating a bogus financial instrument and sending the money back to the person behind the scam. The victim is offered a small part of the money for doing this.

Of course, they are held liable for all of it when the item is discovered to be fraudulent.

Some of the known varieties of the overpayment scams are the lottery, auction, secret shopper, romance and work-at-home (job) scam(s). Please note you can search any of these "scam" terms at the top of this page for more information.

Spam e-mail is normally the vehicle in which these scams are presented, however they show up in more traditional print venues (including junk mail) from time to time, also.

One thing to bear in mind is that counterfeit checks (cheques) often appear to be legitimate in verification systems. The reason for this is simple, they use legitimate account numbers.

Victims have even asked employees at their financial institution of choice if the instrument was legitimate. Sadly, the items are often so good that the person is told that they are real. A financial institution employee verifying an item offers you no guarantee that the item is good. The person passing the instrument is the one who is liable for it.

Another tricky thing is that many financial institutions will also give their customers credit for these items in their accounts. This often gives the victim a false sense of security and causes them to send the money back to the scammer before realizing what is going on.

Federal rules dictate that banks can only put holds for a specified period of time depending on what type of check it is. The people behind the scams know about this and take advantage of it.

Although the money can be sent in a lot of different ways, most scammers prefer the use of Western Union, or MoneyGram wire transfer services. The reason for this is once the money is picked up (often within minutes), there is no recourse for the person who sent it.

Besides counterfeit checks, we've seen other instruments counterfeited on an industrial scale and sent to unsuspecting people, also. The known items in circulation are have included Postal Money Orders, Travelers Express (MoneyGram) Money Orders, American Express Gift Cheques and Visa Travelers Cheques.

The end result of these scams is that the person negotiating the item will be held financially liable. People are also getting arrested in certain circumstances for passing these items, also.

The National Consumers League recently set up a site (fakechecks.org), which is a great reference on Internet scams involving checks (complete with visual presentations), here.

Here is a post, I wrote with more information on how to verify one of these items:

Tools to verify those too good to be true financial instruments you got in the mail

Please note that if the deal you are being presented is too good to be true, or you are being asked to wire money it probably isn't worth going to the effort of trying to verify the item.

Also note that these scams have become so sophisticated that there is no guarantee that any amount of verification can guarantee the item is legitimate!

80 year old man loses over $700,000 to advance fee (419) scammers

With spam e-mails offering too good to be true come-ons filling up our mailboxes, we often forget that there are some very real people who get victimized after falling for one of them.

Of course with the availability of botnets -- which command legions of spam spewing zombies (compromised computers)-- even if only a few people fall for the scheme, the scammers still make a tidy sum off of other people's misfortunes.

An example of this can be found on the Newport Beach Police website, where an elderly gentlemen lost a lot of money (probably his life savings) to one of these schemes:

Recently, an 80 year old resident of the city learned he was a victim of an international lottery scam. He originally received an email claiming he had won an overseas lottery which required him to pay a processing fee to have the funds released. This scam continued for a two year period and ended with the victim losing over $700,000.00.

Scam operators (often based in Canada) are using email, telephone and direct mail to entice U.S. consumers to buy chances in high-stakes foreign lotteries from as far away as Australia and Europe. These lottery solicitations violate U.S. law, which prohibits the cross-border sale or purchase of lottery tickets by phone or mail.

This type of scam is often referred to as an Advance Fee (419) scam.

Of course, the lottery scam isn't the only one out there. There are work-at-home (job) scams, secret shopper, romance, lottery and auction scams being sent out in millions (billions ?) of e-mails, also. And if you don't have your own financial resources, the scammers will gladly provide you with a wide array of counterfeit financial instruments to negotiate. They could care less if you get arrested and expect that you will wire them any proceeds if you successfully pass the bogus instrument.

Please note, that just because you initially are able to pass the instrument doesn't mean that someone won't come after you, later.

The news release from Newport Beach Police Department offers the following advice on how to report scams like this:

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

They also point to a page on the FTC website about cross border scams, which can be seen here.

If you are a more "visual type," I recommend going to fakechecks.org, which has a series of video presentations on this subject.

USPIS Presents: Work@Home Scams: They Just Don't Pay!

The United States Postal Inspectors have produced a pretty telling video showing how Internet criminals lure people into taking jobs that will cause them financial and legal trouble.

The film entitled, Work@Home Scams: They Just Don't Pay shows what happens to people, who accept work-at-home jobs that aren't what they appear to be.

It also speaks to how this problem has grown from ads in the classified section of newspapers and magazines to being plastered all over the Internet.

A lot of us probably see spam e-mails offering these too good to be true jobs that don't make sense on a daily basis. You might also run into one of these scams on a job-site, such as Monster.com.

Another fact is that applying for one of these jobs can lead to giving up your personal information, which will later be used to steal your identity.

Please remember these scams still show up in the classified ads of newspapers and magazines, also.

Here is (what I consider) an interesting story about someone falling for one of these scams that should have known better (my opinion):

BBB Worker Takes Job Processing Fraudulent eBay Transactions

Internet Resume Posting and Fraud

Identity thieves are turning to job sites to steal personal information. Criminals are also recruiting people into getting involved in scams on these sites. Recently, I did a post on criminals who recruit people to ship merchandise and set up accounts to transfer funds (normally overseas). When this happens -- the person who is involved in this can be financially liable and even worse -- they might face criminal prosecution.

Besides the recruitment of people to do scams, resumes often provide the right information to steal identities. If they do not have quite enough information to do this -- they merely obtain the rest in the fake hiring process by getting the applicant to submit pertinent information -- such as their social security number.

Here is the recent post on work at home scams.

http://fraudwar.blogspot.com/2005/07/work-at-home-scams.html

Besides shipping scams, people are also solicited on job sites to work in various financial type jobs. In this variation of the scam, they are tricked into transferring (laundering) funds obtained through fraudulent means. Since this is normally done through one of their own accounts they expose their personal financial resources, which are often promptly stolen, also.

According to the World Privacy Forum, this activity has been increasing recently:

http://www.worldprivacyforum.org/resumedatabaseprivacytips.html

Will 2010 be a Banner Year for Identity Thieves?

For the past six months or so, this blog was put on hold. I could come up with a lot of excuses why it was put on hold -- such as increased workload and job responsibilities -- but I probably just needed a break from writing.

Now that I am taking a look at getting back into blogging, it doesn't appear much has changed in the fraud arena or that the news is getting better. Of course, I probably already knew that. After all, I didn't get much of a break from all the fraud that is going on out there, I merely wasn't writing about it.

For instance, Jay Foley at the Identity Theft Resource Center did a recent interview with Tom Field at Bank Info Security and is predicting some scary trends for 2010. Two of the predictions are that medical identity theft and too good to be true scams will be on the rise.

I can attest to the too good to be true schemes being on the increase. They happen all over North America on a daily basis. Strangely enough, the scams seem to recycle themselves and use the same bogus financial instruments, over and over, again.

"Well, first and foremost we are going to see a lot more scams. Because of the tough economic times, we are seeing a lot of scammers come out of the woodwork and try to suck you into this quick job, that quick job, here make a little extra money, and invariably what happens is you find yourself on the hook for greater debt and greater problems because you went to work with these scammers," according to Jay Foley.

Besides this, Jay is predicting an increase in medical identity theft, which struck me as "interesting" given all the media attention on health care legislation. Apparently, he is seeing a lot of people, who are without insurance, use some else's name and social security number to piggyback on someone else's benefits. In the article (also a podcast), Jay aptly points out that the medical industry has been plastering social security numbers on just about every document they create for years.

It should be noted -- especially as move towards digital medical records -- that in the wrong hands these records can be used for more than medical identity theft. The same information can be used to commit a host of financial crimes, including scamming the government and the insurance companies. In case you missed it, the WSJ did a story on the subject, where an insider (employee) downloaded 1100 records, which were later used by his cousin to commit $2.8 million in fraud.

There is no doubt that medical records have been identified as an easy place to steal information by the criminal element. The "trillion" dollar question right now is if making these records digital is going to make the problem worse? Only time will tell.

Estimates on medicare fraud vary greatly, but some go as high as $80 billion a year. Please note this is an estimate on medical fraud in the public sector and doesn't account for the fraud directed at the private sector. The NHCAA (National Healthcare Anti-Fraud Association) is a good place to see all the different aspects of this growing problem. The end result is a monetary loss that we all end up paying for, whether as a taxpayer or a consumer.

It's pretty hard to get an accurate estimate of how much fraud occurs, we can only guess what it might be based on the known incidents. The reality is the more successful frauds are never discovered. After all, most of the people committing fraud go to great lengths to keep their activities anonymous. It is bad for business, otherwise.

So far as industries that will be targeted, Jay predicts the payment services industry and medical industry will be the most attractive to information thieves. Is this because the payment services industry is where there is instant access to money and the medical industry has an abundance of easily accesible information to steal?

Also predicted is that the scammers, hackers and identity thieves behind these schemes are going to be much younger. Citing the urban legend status given to Albert Gonzalez (28), who has now been identified as being a member of the Shadow Crew and behind the TJX, Heartland and Dave and Buster's breaches as a fueling factor. According to Jay, his group is seeing a trend where teenagers are putting up fake e-commerce sites etc. etc. to steal payment information and steal money.

Jay also points out that most information theft is being done by insiders, or people who are given access to it. I've always said that you can have the best security systems out there -- but if you give the wrong person access -- even the best systems can be redered useless. With information being worth money, people can be recruited or even planted in organizations to steal it. While the Albert Gonzalez types make good news stories, if an organized crime group (or lone crook) wants to get in a system, it's a lot easier if they have an inside connection.

Perhaps we need to take a step back and realize that the human being is the most important part of any security equation. Human beings are on both side of the equation, whether they are the victim or the victimizer. As long as we continue to maintain information in easily accesible places (to make money) and send it (electronically) all over the place, we are going to have a problem.

You can read more about Jay Foley and the Identity Theft Resource Center (highly recommended), here.

BBB Worker Takes Job Processing Fraudulent eBay Transactions

A Better Business Bureau worker was recently involved in eBay fraud by taking a part-time (work-at-home job) processing account receivables for criminals from Eastern Europe. According to her, she even checked them out before accepting the job and found nothing that would suggest a scam.

The job was to process payments (primarily from eBay transactions) and wire the money to her employers.

These scams, known as check-cashing schemes solicit people to process fraudulent financial instruments and wire the money to a far-away locale. Their employers normally prefer the use of Western Union, or Money Gram, which offer little to no protection once the money is sent.

News clip from 9News.com in Denver, here.

There is also another version of the work-at-home scam, which entails receiving the stolen merchandise and then reshipping it.

In work-at-home (check cashing) schemes, the worker is normally instructed to set up an account (using their information and good credit) to process the financial instruments. Quite often, they are held financially responsible after the financial instruments are discovered fraudulent and they have wired the money.

No matter what the scam entails, the fraudsters always prefer "unprotected" methods of wiring money. I would highly recommend NEVER wiring money to someone you don't know, or haven't done a lot of business with for a LONG TIME.

To add to the confusion many auction fraud victims buy merchandise from seemingly highly rated sellers when their account is taken over. Account takeovers are normally accomplished via phishing, where a legitimate account holder is duped into giving up their account information.

Phishy e-mails from eBay and PayPal are circulating the internet at a record rate.

Interesting that the BBB worker was savvy enough to do a little "due diligence" on the scam company, which revealed nothing. When I looked at their site, I found two articles that describe activity very similiar to this.

Work-at-Home Schemes

Work-At-Home-Schemes Now Peddled On-Line

I wasn't able to find an article on the BBB regarding "check cashing schemes," but in reality this scam is nothing more than a "mutation" of the "work at home" scheme.

I'd offer to write it for them, but after writing this post, I doubt they will solicit my services.

It's becoming quite common for organized gangs to set up fraudulent businesses as a front for the various scams out there. They are often complete with office space, telephones and even web sites.

I guess the moral of the story is that when a business has no verifiable track record a prudent person should dig a little deeper? I stole that one from my friend Paul, who writes prying1.

Let's face it, processing proceeds from auctions using your own account and wiring the money to Eastern Europe seems a little risky. At least to me, it does.

Government Job Assistance Scams

Quite often on job sites and in classified advertising, there are ads stating they can get you U.S. Government jobs. For a fee these ads claim they can guarantee a position.

In most instances, people are directed to a toll free number, where someone tries to sell them study materials for a fee. These fraudulent services have also been known to lie about the availability of specific jobs in an area to reel in a customer (victim).

Many of these services will not give you any better chance of obtaining the job than if you applied for it yourself.

If you have been the victim of one of these scams call the Federal Trade Commission: 1-877-FTC-HELP (382-4357) or visit their website at www.ftc.gov and file a complaint. You can also complain to your state attorney general, or the Better Business Bureau.

Free information on government jobs can be found at www.usajobs.opm.gov. The bottom line is that information on civil service employment is in the public domain and no one should be charging for it.

Here is a link to an earlier post on identity theft occurring on job sites:

http://fraudwar.blogspot.com/2005/07/internet-resume-posting-and-fraud.html

To view the Federal Trade Commission's Alert on this activity, click here.

Counterfeit MoneyGram Money Orders being passed via Internet Scams

Recently, MoneyGram removed the Travelers Express name from their money order product. The new version is branded simply as MoneyGram, printed in Spanish (Espanol) in addition to English.

The old version with the Travelers Express name have been counterfeited and circulated via Internet scams for a couple of years. A lot of them had Walmart's logo printed on them. We've seen similar counterfeit American Express Gift Cheques and Postal Money Orders in recent years, also. Some of these items are still in circulation, including the older Travelers Express version.

The newer version (MoneyGram) printed in both Spanish and English are now being counterfeited and being circulated via Internet scams. The one I saw was accompanied by a letter from Walmart Financial Services.

Like other counterfeit financial instruments, we'll probably see these circulated via romance, auction, job, secret shopper and lottery scams. The common theme is that the scammer will always request that you send a portion of the money back to them (wire transfer is the preferred method).

In the case of auction scams, they may be used to buy expensive merchandise.

Cashing these items will leave you at a minimum, financially liable. I've also been told by readers that people are sometimes getting arrested for passing them!

The new version (recently seen) have receipts attached to them. Money Order companies often attach receipts to their products as a security feature. These receipts are used to obtain refunds, if a money order is lost, or stolen.

The counterfeiters have probably added this feature to instill a false sense of security.

Like their predecessors, these counterfeit Money Orders are (normally) easy identified by calling in and verifying their authenticity.

MoneyGram has an automated system to do this, which can be accessed by calling 1-800-542-3590. Live customer service help is available during normal business hours.

MoneyGram also has a page with a lot of relevant information on how to SAFELY negotiate these items, here.

Since this is something new, if anyone would like to help get the word out, please leave a comment on this post, or drop me a line at EdwardDickson@SBCGlobal.net.

2007 Internet Crime Report shows dollar loss at all time high!

According to what many consider a reputable source, the FBI, Internet scams have set a new dollar record ($240 million).

Here is what they wrote about it in the press release (courtesy of the FBI site):

Pets, romance, and secret shoppers.

They’re each among the top ruses used by Internet scam artists in 2007, according to a comprehensive report on online crime just issued by the Internet Crime Complaint Center, or IC3.

Here is how the FBI described the most prevalent scams:

Pet Scams

- You see an online (or offline) ad selling a pet and send in your money, plus a little extra for delivery costs. But you never get the pet; the scam artist simply takes your money and runs. - You’re selling a pet. You’re sent a check that’s actually more than your asking price. When you ask about the overpayment, you’re told it’s meant for someone else who will be caring for the pet temporarily. You’re asked to deposit the check and wire the difference to this other person. But the check bounces and you lose the money you sent to what turns out to be a fraudster.

Secret Shoppers and Funds Transfer Scams

- You’ve been hired via the web to rate your experiences while shopping or dining. You’re paid by check and asked to wire a percentage of the money to a third party. Like the pet scam, the check is bad and you’re out the money you sent. As part of the scam, the fraudsters often use (illegally) real logos from legitimate companies.
- While renting out a property, you’re sent a check that is more than your rental fee and asked to wire the difference to someone else (are you seeing a trend here?). Or you take a job that requires you to receive money from a company and redistribute funds to affiliates via wire.

Adoption and Charity Frauds

- You get a spam e-mail that tugs on your heartstrings, asking for a pressing donation to a charity and often using the subject header, “Urgent Assistance is Needed.” The name of a real charity is generally used, but the money is really going to a con artist. One set of scams in 2007, for example, used the name of a legitimate British adoption agency to ask for money for orphaned or abandoned children.

Romance Fraud

- You encounter someone in an online dating or social networking site who lives far away or in another country. That person strikes up a relationship with you and then wants to meet, but needs money to cover travel expenses. Typically, that’s just the beginning—the person may end up in the hospital during the trip or get mugged and need more money, etc.

Fraud stats. The report provides a complete breakdown of statistics on Internet crime in 2007. For the year, total complaints were down slightly with 206,884 submissions, but total losses were at their highest level ever, nearly $240 million. See the report for plenty more details about victims, perpetrators, and common categories of complaints.

Full report, here.

Please remember that these reports are only as accurate as the data they compile. Often, I find that a lot of scam victims have no idea, where to report activity to. Because of this, I will end this post with information from the release on where to report Internet scam activity (highly recommended):

Logging a complaint is easy: just go to the IC3 website, click on “File a Complaint,” type in the details, and hit “next.” Review your information and click on “submit” when you’re ready to send. The good folks at IC3 will take it from there.

Cyber Gangs Luring Children to Launder Money

In Australia, a Triad (Chinese Organized Crime Gang) with ties to Malaysia and Russia recruited children to launder money, stolen as a result of "phishing" schemes. Teenagers and a few "20 something" types were recruited to receive the stolen funds in their own bank accounts. They would then turn over the money (minus a commission) to low level members of the gang, who would wire the money overseas.

Unfortunately, it appears from the article I read in the Sydney Herald by Frank Walker that no one at the higher echelons of the gang was apprehended.

For the full story from the Sydney Herald, link here.

Please note that the Australian authorities are prosecuting the individuals involved.

Criminal gangs involved in cyber-crime recruit people to launder the money from financial crimes all the time, and it doesn't only happen in Australia. In fact, evidence shows it is a worldwide issue that is getting worse all the time.

I recently wrote a post about a BBB (Better Business Bureau) employee, who was recruited to do pretty much the same thing:

BBB Worker Takes Job Processing Fraudulent eBay Transactions

Cyber crooks recruit people in chat rooms and even surf jobs sites like Monster.com looking for what they consider "dupes" to take all the "risks" for them. It appears (from this story) that they aren't above using our children to commit their "foul deeds."

Before accepting any job offers from an unknown source on the Internet, it's smart to do your homework. This is especially true, if you are asked to use your own financial resources to negotiate any financial transaction. Furthermore, if any of the above factors "ring true" and you are asked to "wire" money run away from the deal as fast as you can.

Here is a pretty good resource to educate yourself (and others) on Job Scams:

World Privacy Forum