Baker Fraud Report

Top Stories

Federal court class action filed against Apple for facilitating scams that have victims buy an iTunes gift card; claims:

• Apple keeps 30% of gift card sales, which it could return to victims
• Losses from use of iTunes cards reported to FTC is $93.5 million from 2015-2019
• iTunes 23.7% of all gift card complaints to the FTC
• iTunes cards can’t be used to buy physical goods, only music, videos, etc.
• Those using iTunes cards have to have an Apple ID, and thus Apple can track who ultimately got the gift card and look for fraud patterns

DOJ indicts two hackers working for Chinese government over ten year effort to steal vaccine research and other trade secrets

Virus benefit theft

• Theft of virus relief benefits also hitting South Africa, the UK, other countries
• Maryland loses $501 million to virus unemployment fraud
• People in Chicago getting unemployment money they didn’t apply for
• Arkansas: woman arrested who fraudulently got $2 million in small business virus loans
• Detroit: Woman who worked for the State of Michigan indicted; worked to help others who filed bogus unemployment claims; $2 million lost
• Los Angeles: Man arrested for fraud in getting $8.5 million in small business relief loans; gambled much of it away at Las Vegas casino

Coronavirus

• Hackers tied to Russian intelligence trying to steal vaccine research
• FTC and Missouri AG warn of hearing aid companies sending mailers claiming people can use stimulus payments for these
• CFPB complaints up 50% during pandemic
• FTC testifies before Senate on efforts to fight virus scams

Reviews and Recommendations: I highly recommend J.D.  Vance’s Hillbilly Elegy, about growing up in a fractured lower middle class family in the Midwest.  At some level we all know that people come from all sorts of backgrounds but it is easy to overlook what we used to call the working class and that they have many problems as well.

BBB studies: They can all be found here. There are links below to several topic areas, and there are also studies on puppy fraud, tech support fraud, romance fraud money mules, apartment rental, crooked movers, and rental fraud

Fraud News From Around the World

• FinCEN alert on twitter scam involving Biden and others
• Australia arrests eighth person in effort against group doing romance, BEC, and other frauds
• T-Mobile and Sprint announce new steps to fight robocalls
• Nigeria: Yahoo boys arrested after dancing on their Mercedes Benz’s and throwing money to crowd celebrating successful scam
• UK recovers $1 million from British-Indian woman and her Nigerian partner in fraud case
• Nigerian man arrested at request of FBI for internet fraud; also nab his Mom and girlfriend
• Head of EFCC in Nigeria arrested and suspended from job; suspected of stealing seized funds
• Kansas City:  Joel Tucker pleads guilty to tax evasion, payday loan efforts through and Indian tribe, and selling bogus “debt” to debt collectors; must repay $8 million
• Two Ukrainians arrested for smuggling and selling counterfeit cancer and hepatitis drugs
• Australia warns of rise in government impersonation scams
• Court in Australia fines business $600,000 for using fake reviews
• Oakland: Man gets four months prison for selling counterfeit electronics “from” Apple, HP, etc. that he got from China
• Judge approves $22.5 million class action settlement with Bumble over its auto-renewal policy

Humor

• Pizza store owner throws pie at robber and foils theft
• Man on drugs arrested after biting seagull that was trying to steal his Bic Mac

FTC and CFPB

• FTC and Florida AG shut down Florida-based call center that claimed it could reduce credit card interest rates
• FTC sends over $ 1 million in refunds to small business victims of labor law poster scam
• Los Angeles: FTC wins court case against student loan debt relief scam; court orders payment of $27.6 million restitution to victims

Business email compromise fraud (read BBB study)

• Prison for Florida man acting as a mule for money from BEC attack on Texas school district; began with a romance fraud

Social Media

Data Breaches

• Huge increase in hackers going after home routers that run Wifi to add to botnet operations; change your default password

Ransomware

• Attack on French telephone company
• Ransomware group shuts down 18,000 computers at Argentinian phone company/ISP; demand $7.5 million
• Hits Maryland nursing homes with 50,000 residents

Bitcoin and cryptocurrency

IRS and tax frauds

• Audit gives IRS, TIGTA high marks for battle against stolen identity refund fraud
• Rochester, New York: Jamaican woman who pleaded guilty to stolen identity refund fraud failed to appear at sentencing; nabbed and rearrested
• Calgary, Alberta: Man charged with stolen identity refund fraud against Canadian Revenue Agency
• Ohio: Three men arrested for stolen identity refund fraud

ATM skimming

• Salt Lake City, Utah:  Romanian pleads guilty to ATM skimming; took in at least $214,000
• Romanian arrested after extensive ATM skimming; previous fraud in Australia

Jamaica and Lottery Fraud (read BBB lottery fraud study)

• Jamaica: During lottery fraud search police also find six guns and seize drugs; two arrested

Romance Fraud and Sextortion (read BBB romance fraud study)

Chicago: Two Nigerians and a third person arrested for romance, inheritance and other frauds in suburbs  Criminal complain here

Full Report here

Nigerian police rescue romance fraud victim kidnapped and held by scammers for 16 months

• Fraudsters got her to travel to Lagos
• She is a retired civil servant from Washington, DC
• Took her for $48,000
• Crooks also took over her pension payments
• Suspect arrested

Supreme Court agrees to hear two cases on the FTC’s legal authority to combat fraud

Virus benefit theft

• Indiana: Mother and daughter arrested for money laundering; received fraudulently obtained unemployment benefits from Washington State, took a cut, and sent the rest to a third party
• Washington, DC:  Criminal charges against Nigerian for fraudulent attempt to get small business loans; sought $400,000

Coronavirus

• Louisville, Kentucky:  DOJ sues to shut down web sites telling people they could preregister to get virus vaccine for $100 in bitcoin
• Prison for UK man that sold fake virus test kits worldwide
• 3M sues scammer that tried to sell Indiana $14 billion of masks he did not have; company has filed at least 17 other court cases over mask fraud
• Nigerian police and Interpol arrest three for fraud in online sales of masks, romance scams and other frauds; seize millions
• Bangladesh: Doctor arrested over fake virus tests

Full report here

Top Stories

Agari releases new study on BEC fraud gang; now by Russians

• Claim money needed for an acquisition in Asia
• Nearly perfect English in emails
• Also impersonate real prominent UK lawyers
• Actively avoid use of mules in the US; money goes to Hong Kong, or sometimes Romania

Supreme Court strikes down provision that allowed robocalls for collecting money owed to US government

Virus benefit theft

• North Carolina: DOJ seizes $49,000 in unemployment benefits obtained by scammers; much of the money first went to romance fraud victims
• Seattle, Washington: Doctor arrested for fraud in seeking $3 million in paycheck protection loans
• Massachusetts recovers $158 million in unemployment payments that went to scammers; money sent from 58,000 bogus claims

Coronavirus

• FBI warns of fake antibody tests; phone calls offering them, sales on social media; promises to pay you if you take one

Full report here

Top Stories

 Appeals court finds that Amazon is strictly liable for defective products from third party sellers; would cover counterfeits; different outcome from other courts; may end up with Supreme Court

Supreme Court rules SEC can get disgorgement in fraud cases; ruling may affect pending issue of that tool for the FTC

• Opinion suggests FTC may be able to use equitable powers of court
• Limits disgorgement to net profits, after deducting expenses
• Disgorgement must go to victims; but FTC always tries that first; left over money goes to Treasury
• Joint and several liability of defendants also considered

Supreme Court finds CFPB unconstitutional; but saves agency by allowing President to replace head at will like other executive branch heads

My new BBB study on crooked moving companies was just released

• Thousands of complaints to BBB
• Crooks give very low estimate; double or triple the price AFTER loading goods; illegal to raise price after loading
• Goods arrive weeks late, often serious damage
• Crooks often born in Israel; located in South Florida
• It is critical to check movers out carefully in advance; go to BBB.org

Virus benefit theft

• Austin, Texas: Man arrested who filed fraudulent claims for small business loans and just invented business names; took in $2 million
• Texas: Man from Zambia indicted for stolen identity refund fraud; fake returns meant he also received virus stimulus payments
• Virginia: Couple arrested at the airport fleeing to Poland over bogus claims for small business loans
• Boston: Man arrested over fraudulent small business loans; sought over $13 million
• GAO issues report on fraud risks in virus benefit programs
• Hawaii loses $16 million to unemployment fraud

Coronavirus

FTC saw huge spike in complaints about online shopping during shut down; half of them about products never delivered

• Face masks, PPE, puppies and many other products
• Number of people that got nothing at all quadrupled since 2015
• Losses $420 million reported since 2015

Phone recording of scam sale of nonexistent PPE

Happy Fourth of July!  We’re all Americans together, and will get through these times.  No major country in history has been so tolerant and offered such freedom and opportunity. For those with an interest in US History I heartily recommend the Oxford History of the United States.  It is eight volumes now, and perhaps my favorite is Battle Cry of Freedom by James MacPherson, perhaps the best one volume history of the Civil War you can find.

Full report here

Top Stories

Australia issues fraud report for 2019

• Top three:  BEC, investments, romance scams
• $634 million lost;   30 % increase from 2018

BBB issues new report on employment scam; younger more likely to be scammed; fake check and reshippers common

Kentucky: 15 defendants have pleaded guilty, most of them Romanians, and scheme selling nonexistent cars on Craigslist and eBay.  

Virus benefit theft

• Identities of 150 Syracuse, New York teachers used to apply for unemployment benefits
• IRS warns crooks are sending people counterfeit stimulus checks; claim an error and you need to send them “overpayment”
• Boston: man arrested for trying to get $13 million in virus relief loans
• Illinois also seeing ID theft being used to get unemployment benefits

Coronavirus

• UK warns public is getting text messages that a virus testing unit will visit their homes; you must stay in a separate room; fear that this is a dodge to burglarize  
• China sentences head of pharmacy chain to 15 years for selling counterfeit 3M face masks there
• New Orleans:  US customs seizes 2000 counterfeit face masks with designer logos
• Victims who bought fake virus vaccine to get refunds after lawsuit by Washington state AG

Ransomware in Canada poses as government virus tracing app

Full report here

Top Stories

FTC now has live data online about virus and stimulus complaints

Robocalls dropped sharply this year says FTC; April 2020 complaints down 68% from April 2019

Report finds lax internet security – at the CIA

Virus benefit theft

• Theft of unemployment benefits by fraudsters may cost $26 billion
• Scam stealing unemployment now also hitting Wyoming
• Organized crime stealing Canadian Emergency Response Benefits
• Feds warned Washington State about dangers of unemployment scams weeks before the State acted
• Wisconsin has blocked $10 million in unemployment benefit fraud, but $1.2 million has been lost
• Chicago: criminal charges against Indian American business owner who got $400,000 in small business loans
• Boston: Two Nigerians arrested for stealing virus unemployment benefits, romance fraud, other scams

Coronavirus FBI’s Internet Crime Complaint Center warns scammers are now seeking extra fees supposedly related to the virus; e.g. shipping, insurance

Full report here

Top Stories

EU launches new Financial and Economic Crime Center; not clear where it will be located or if it will take complaints from vicims

Criminals got 5 billion records in data breaches and hacks in 2019, costing U.S. organizations more than $1.2 trillion

• Healthcare most targeted
• Social Security numbers most common type of data stolen

FCC sues two robocalls companies that made over 1 billion calls about health insurance; seeks largest ever $225 million fine; 7 State AG’s also sue the companies

Phishing attacks seeking log in information for corporate computer systems traced to operation in India; owner wanted by the FBI

Virus benefit theft

• Secret Service has stopped $1 billion in fraud in virus relief efforts
• FBI testimony on efforts to stop virus related fraud; note that IC3 has already had as many fraud complaints so far this year as all of last
• Washington state has lost roughly $600 million to Nigerians in unemployment fraud; about $300 million recovered so far
• West Virginia loses millions to fraud unemployment claims
• Nevada is having major problems with theft in its virus assistance efforts
• Michigan reviewing 15% of unemployment claim for possible fraud

Coronavirus

• Over 10% of people in the UK have been victims of a virus scam
• Canadian woman learns scammers received Canadian Emergency Response benefits using her name
• UK arrests man selling fake virus test kits to UK and US
• FBI statement on efforts to fight virus frauds
• 3M sues Amazon seller over counterfeit N95 masks

Full report here

Virus benefit theft

• Virginia man indicted for fraud in applying for disaster loan; got $190,000
• DOJ makes arrests in New York and Texas over fraudulent paycheck protection program fraud
• Maine Department of Labor puts hold on unemployment cases over concerns scammers engaging in ID theft to steal benefits
• Massachusetts also worried about Nigerians stealing unemployment money
• 2/3 decrease in unemployment applications filed in Washington State suspected to be result of scammers
• Massachusetts reviews 150,000 unemployment applications in effort to avoid fraud
• Pennsylvania has 53,000 to 58,000 bogus claims for virus payments; now sending paper checks instead of direct deposit
• Washington state has recovered $300 million in unemployment benefits stolen by scammers
• Agari study of Nigerian fraud gang Scattered Canary, now believed to be behind theft of massive amount of unemployment benefits
• Unemployment benefit scam also hits Michigan; local people not getting payments
• National Consumers League warns of theft of unemployment benefits, how to check to see if they are and where to complain
• FTC explains what to do if scammers apply for benefits with your name

Coronavirus

• Google warns that scams in India are sending emails that seem to be from the World Health Organization to get victim google login info
• Ransomware hitting Italians claims to be contact tracing app
• Hollywood executive arrested for fraud in getting PPP small business loan that he kept for himself
• US Customs seizes half a million counterfeit masks, testing kits, drugs that were virus-related in March and April
• UK seizes millions of  counterfeit face masks at Heathrow
• Kenya arrests two for theft of virus relief funds
• Scotland:  People getting calls from someone impersonating police and demanding fines for violating lockdown regulations

UK victims receiving a flood of text messages, over 11,000 claiming to be notifying people of virus contact tracing; designed to get people to enter personal information

Read the full report

IRS is mailing at least 4 million prepaid debit cards with stimulus money on them

Coronavirus

• Washington State adopts new verification steps to help stop theft of unemployment benefits by Nigerian scammers; $120 million recovered last week
• Dept of Transportation issues enforcement notice telling airlines they must grant refunds
• FTC sends 50 more warning letters to companies over virus claims
• Wired: More on Nigerian gangs stealing unemployment benefits
• Bank of America discloses that it may have lost data in uploading paycheck protection plan applications
• Seattle:  software engineer charged after fraudulent attempts to get virus small business loan of $1.5 million; criminal complaint here
• UK: scammers are calling families of those killed by virus, claim they need money for funeral director to get credit card info
• Australian hospital workers end up with counterfeit masks
• Canada warns of text messages asking people to click a link to get their Canada relief fund money
• Canada finds 1500 fake websites impersonating government agencies about virus issues

Full report here

Top Stories

Secret Service warns Nigerian gangs are running massive fraud to steal state  unemployment benefits; losses may be hundreds of millions

• Use stolen identities of law enforcement, teachers, others to apply
• Money goes into money mule accounts, often in other states
• Many of the accounts opened by romance fraud victims
• Biggest problems found so far are Washington State, North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida

ID theft victims can’t get benefits
Nigerian fraud gang Scattered Canary involved
Here is my study on how romance fraud victims are used as mules

Three big US credit report agencies now let people get one free every week for the rest of the year

FTC launches new dashboard that allows searches of international scam transaction;

• Data from e-consumer.gov web site
• Data search page here

Coronavirus

• Do you remember the Hong Kong Flu in 1969 that killed 83,000 in the US when the population was much smaller? I don’t either
• India investigating corruption in purchases of masks
• Australia sees 2000 complaints about stimulus payment fraud; $700,000 in losses
• U.S. healthcare workers are finding many masks are counterfeit
• SEC sues two companies for claims in press releases that their testing products combat the virus
• FTC: nursing homes can NOT take stimulus checks from people on Medicare
• India sees big increase in virus scams
• ACCC in Australia seeing five times more pet scams complaints during shut down
• Group finds 24 mask sellers on eBay claiming to be FDA certified when they are not
• UK arrests man that was sending text messages claiming to be from the UK government and claiming that victims could get tax refunds due to virus; trying to get their bank account info
• FTC and Small business agency send warning letters to two “lead generators” that offer loans during virus
• Scammers are sending emails that look like they are from a cruise line offering a refund; want your credit card number
• FinCEN issues advisory on virus scams; bogus products, undelivered goods etc.

Full report here