Saturday, November 19, 2005

Nigerians convicted in $242 Million Fraud Scam

The Nigerian Government is trying to improve it's image, especially in Advance fee fraud (419) scams. According to the Associated Press two Nigerians were convicted in an international fraud scheme that led to the collapse of a Brazilian Bank. The amount of this scheme allegedly is $247 million. An insider at the bank illegally transferred funds, up to $4.75 million in one transaction at a time, to accounts specified by Frank Nwude and Nzeribe Okuli (the Nigerian defendants).

According to the AP, "Okoli was sentenced to four years in prison, while Nwude received five five-year sentences, to be served concurrently, and was ordered to pay the bank $110 million as well as a $10 million fine, said Ibrahim Lamode, a top official at the Economic and Financial Crimes Commission. A third defendant was convicted earlier in the scheme."

Let's see, $247 million minus $110 million equals $137 million still missing. Since the definition of concurrently in legal terms means together, Okoli will serve only five years and Nwudi four. If they were to split up the time (minus a $10 million fine for the Nigerian goverment), this equates to $14.1 million profit per year for each year they serve. Not too shabby in a country, where the average person can barely afford to eat.

I wonder if there sentences will include "time off for good behavior?" With the amount of money left over, it probably would be easy to arrange in a country, which is notorious for corruption.

The sad fact is the majority of Nigerians live in an extreme state of poverty, despite being a member of OPEC and the eleventh largest producer of petroleum in the world. A select few in Nigeria (along with foreign companies) have been the recipients of massive profits, yet the majority of the country lives in poverty.

No wonder there are so many willing recruits into the seedy world of 419.

I'm glad the Nigerian government is going after some of this, but to me this case is merely an attempt at publicity. They and the foreign companies doing business there need to realize that providing a better standard of living for the eighty percent (who live in severe poverty) is the only thing that will make a lasting change against the rampant corruption and violence that exists in Nigeria today.

To understand the situation in Nigeria, all one needs to do is read the CIA's analysis: U.S. State Department's Travel Warning - Nigeria.

For further reading, here is a previous post, I did on 419 in Nigeria, 419 From the Other Side of the Fence.

Friday, November 18, 2005

Secret Shoppers Scammed

I'm sure we've all seen advertisements on how you can make a lot of money, get free merchandise and meals and even take cruises as a "Secret Shopper." We've also seen numerous services (questionable) that will sell you information on how to do it.

Although, there are numerous companies, who do this for legitimate businesses, very few people make much money by being a secret shopper. So far as the services selling you a package to do it, I would recommend that you stay away from them. Quite simply, they aren't necessary and you are probably paying for something that you could have got for free. All one needs to do is look up the companies, (Secret Shopper) online and apply directly to the company.

On a much scarier note, I read a report from the Minneapolis Star Tribune that "Secret Shopping" is the latest ploy to attract victims into Advance fee fraud (419 scams).

Here is how this latest scam works as reported in the Minneapolis Star Tribune:

"John McCullough, business coordinator for the Financial Crimes Task Force, said the perpetrators ran an ad in the Star Tribune classified section last month luring readers with an offer to be "Secret Shoppers" for "$100/hr. guaranteed" and "no experience necessary."

People who responded to the ad were sent a letter congratulating them on being selected and instructing them to cash a $2,830 check at their bank or other institution, to keep $200 for themselves, and to send most of the rest to the Canadian address. The check-cashing task is described in the letter as an "assignment" to "evaluate the effectiveness and efficiency of a payment system called 'Moneygram' which is available at all Wal-Mart (sic)."

Moneygram and Western Union offer wire transfer services, which aren't insured by the FDIC. In many advance fee scams, the ploy is to get someone else to cash a fraudulent instrument and wire the money (normally overseas) before the instrument is discovered as a fraud.

"The letterhead is topped with the Web address ( of an apparently legitimate operation in Canada that employs people to shop and evaluate retail establishments. Other legitimate operations include in Gainesville, Ga., and in Minneapolis."

As I am constantly saying, Advance Fee is a continuously mutating animal. The Secret Shopper twist is new and if history proves correct, we will see this version of the scam travel quickly in the borderless environment of the internet.

Some good advice from the article is, "beware of checks made out for more than the selling price of an advertised item, checks delivered via overnight delivery service, checks drawn on an account in a name that is different from the person buying the item, and instructions to wire money to a large U.S. city or to another country such as Canada, England or Nigeria.

Other things to watch for are payment of a "commission" for facilitating money transfers through personal accounts, and e-mails requesting the receiver to "confirm, update or provide" personal banking account information."

Note that people, who fall victims to these scams are normally held financially responsible. In some instances, some of them have even been arrested for attempting to pass fraudulent financial instruments.

Should you suspect you are being solicited on any internet scam, the best thing to do is to report it to the authorities. There are numerous links throughout this blog and in my "links" on how to do so!

Wednesday, November 16, 2005

Keylogger Attacks Up 65 Percent, Is Your Personal Information Safe?

I've written a lot about Keyloggers. Here is a pretty scary statistic from iDefense, which is a leading and well respected computer security company.

iDefense reports that in 2000 there were 300 known attacks, last year there were 3,753 attacks and this year, there has been 6,191 attacks so far this year. This represents a 65 percent increase in activity, which illustrates that this could be a nasty trend.

"Keyloggers, silently installed programs that record a victim’s keystrokes and sends them to hackers, put tens of millions of Internet users’ finances, personal data and account information at risk. Largely distributed by organized cyber theft groups, they are typically packaged with phishing emails or spyware – malicious code that than tracks victims’ online activity – often eluding traditional security defenses like anti-virus software and firewalls."

You might be amazed that "keyloggers" are legal, here is one site of many (do a search on your favorite search engine), :: Professional keylogger (key logger) and surveillance software :: Overview .

Keyloggers are "marketed" as an efficient means to spy on your spouse, child, boss, or employees. Unfortunately, they can be used to commit crimes and espionage, also.

Of course, for a price, you can protect yourself (maybe), Professional anti-keylogging and anti-spyware software :: Anti-keylogger :: Overview . Please note, I can't endorse any of these products as I'm not certain how effective they are. Making sure all your computer protections are "up to date" is probably the best advice, I can give.

As this menace increases, I'm certain we will learn more.

It's a crying shame that these programs are for sale all over the internet. Examples, such as this, reveal why internet crime is growing rapidly. To me, not only is it scandalous that this technology is openly available to criminals, but it is even more scandalous that companies are allowed to market it and then market the means to protect against it.

Sunday, November 13, 2005

Congress Tries to Silence Identity Theft Initiatives

After reading an article by Robert Vamosi at CNet, I'm fighting mad!

"Congressman Cliff Stearns (R-Florida) is pushing through changes to HR 4127, the Data Accountability and Trust Act (DATA). Stearns's press release states, "This bill will help ensure that personal data are accounted for, secured, and actively protected against breaches by empowering consumers and businesses to promote the notion that security sells."

Although, this sounds good, in reality, it is deceptive because HR 4127 effectively silences a lot of the forward progress started with a ground breaking law passed in California, SB 1386.

California's SB 1386 set the standard forcing companies to make their customer's aware when their data had been breached. This inspired a national version S 1789, "sponsored by senators Arlen Specter (R-Pennsylvania), Dianne Feinstein (D-California), Patrick Leahy (D-Virginia), and Russ Feingold (D-Wisconsin), S 1789 would set a national standard and effectively punishes corporations that fail to comply.

Unfortunately S 1789, seems to be going nowhere soon and we now face a real danger that HR 4127 will preempt it.

HR 4127 has dangerous consequences for consumers. Here are the two most glaring items:

The company, who has incurred the data breach would decide if the customers needed to be notified because their was a significant risk of identity theft (with some minor exceptions).

Congressman Stearns has also put in the law that you will be unable to sue a company that leaks your information. Recently, he introduced legislation, which was made into law, banning lawsuits against firearm manufacturers.

Mr. Vamosi states the very reason data breaches are important to communicate to individual compromised, "they're an important insight into the unregulated data warehouse industry, where your purchases at Wal-Mart, combined with your driving history and online newsgroup postings, could someday determine whether you get a job or get that promotion you've long deserved."

Let's face it, SB 1386 has done a lot of good and exposed numerous security flaws in the world of big business. Laws should be made to protect the people versus protecting "big business" at the people's expense. The corporations/politicians supporting HR 4127 need to take a look at how "data breaches" occur and take action to prevent them. Should they fail to do do, they should be held accountable.

I would recommend that anyone concerned with this issue write, Arlen Specter (R-Pennsylvania), Dianne Feinstein (D-California), Patrick Leahy (D-Virginia), and Russ Feingold (D-Wisconsin) and urge them to push through S 1789, which is a far better law.

To my friends in the State of Florida, where I have two loved ones residing, let Congressman Cliff Stearns (R-Florida) know how you feel and remember this when you cast your vote.

To write any of these representatives and let them know how you feel, go to:

For the very informative and (inspirational) article by Robert Vamosi, click on the title of this post!