Virtual Kidnapping - A New Version of a Confidence Trick!

Not all the kidnappings in Mexico and the United States are real. The US Immigration and Customs division gets reports of virtual kidnappings, where the intent is to extort money, but the alleged victim is safe and sound.

The kidnappers appear to be able to find out who is traveling to Mexico and/or is coming into the US illegally. They then call a family member or loved one, claiming they have the tourist or illegal immigrant hostage and demand money for their safe return.

I happened to pick up this story on Fox News, which reported that Immigration and Customs in Phoenix gets a report about once a week of smugglers holding a hostage. Although 75 percent of them are real, about 25 percent are bogus, according to the story.

The reason the virtual scam works is probably that real cases of people being kidnapped are becoming commonplace south of the border. In April, CBS News reported that a hotline set up in Mexico City to deal with extortion cases had received 44,000 calls since December. The hotline statistics recorded were 22,851 extortion attempts avoided, 3,415 telephone numbers identified as being tied to extortionists, and 1,627 people who paid off the virtual kidnappers.

In another version of virtual kidnapping, an illegal immigrant already in the country is contacted and told that a family member is being held hostage in Mexico. It's not unknown for smugglers to hold onto a family member and extort money from illegal immigrants whom they have brought across the border. With all the real kidnapping going on, it makes sense that fake ones seem legitimate.

In April, the New York Times did another story on virtual kidnapping. In their article, they speculated that at least some of it was being done from Mexican prisons. Apparently, the guards look the other way as long as they get a cut of the action. The article also mentioned that besides virtual kidnapping, other telephone scams are rampant in Mexico, like the sweepstakes variety, a type of the infamous advance fee (419) scam.

Network World asked why this type of kidnapping is referred to as virtual. Paul McNamara wrote a interesting piece pointing out that the term "virtual" doesn't really fit in these cases. "The crime itself is horrific — beyond comprehension in its cruelty — so there's some hesitancy to complain about semantics. But this is a technology column and the underlying issue — society's tendency to blame modern-day bad deeds on technology instead of the bad-deed doers — is an important one," according to McNamara.

He makes a very good point: scams designed to part people from their hard-earned money didn't start with the computer age. Confidence tricks have been around for a long time and virtual kidnapping is merely that, a confidence trick. A good example is what is known as the Spanish Prisoner letter, where someone was tricked into thinking they were securing the release of a wealthy individual (who couldn't reveal their own identity) from prison in return for future compensation. This particular scam dates back to well over 100 years ago.

The Internet is full of too-good-to-be-true scams, which use greed to lure victims. Besides greed, fear is another lure scammers use. We see this on the Internet in threatening letters allegedly from government agencies, or even in what is known as the hit-man scam. In the hit-man scam, a person is intimidated into paying someone off to remove a contract that has supposedly been taken out on their life.

Scams using the telephone are becoming more and more common as well, dubbed "vishing." Here the telephone is used to perform confidence tricks of all sorts, and/or to steal personal and financial information later used in identity theft schemes.

This doesn't take away from the fact that a lot of people are victimized because of the not very secure situation we have on our border. It often seems that the criminals are more in control than the authorities, and besides confidence tricks, we see an overabundance of crimes that threaten public safety and, some say, our national security.

Until we take the control of the border away from criminals, we are going to continue seeing a lot of people victimized.

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.