Baker Fraud Report

Top Stories

Kentucky: Bulgarian who had bitcoin exchange convicted of laundering money for Romanian scam “selling” nonexistent cars; handled at least $4.9 million

BBB study looks closely at online purchasing fraud

• 64% of all complaints with money losses to BBB Scam Tracker are “online purchases:”
• 80% of victims in online purchase fraud lost money
• Victims found scam sellers on:  1. Facebook (30%); 2. Google (28%); 3. specific websites (17%); and 4. Instagram (9%)
• 54% said online shipment tracking info they got was fake
• Big increase since the pandemic began
• #1 complaint was about pets and pet supplies; #2 vehicles and parts
• Largest number of complaints from those 35-44
• 68.5% of complaints from women; Asians hit harder

Global State of Scams Study tries to collect worldwide data

• Looked at data for 31 countries; study has country by country breakdown
• Nearly all report strong growth in scams
• Rough estimate is that losses in 2019 were €36 billion ($42.25 billion)

FTC releases annual Do Not Call report for 9/19-9/20

• Robocalls DOWN
• Top robocall complaints: 1. Imposters; 2. Car warranties; 3. Lower credit card interest

FinCEN proposes requiring reporting of international transactions of $250, down from current $3000; domestic would not change

Virus benefit theft

• Louisiana arrests five for fraud in unemployment benefits
• Los Angeles arrests woman for fraud in getting unemployment benefits
• Wisconsin: Five charged with PPP fraud; got $1.1 million; three of defendants from Chicago
• Arrest and criminal charges in Florida against man who got $1.9 million in fraudulent PPP loans
• Virginia man pleads guilty to PPP fraud
• Seattle man pleads guilty to PPP fraud
• New Hampshire finds over 6000 cases of ID theft used to get unemployment benefits
• Charges against two in Detroit in fraud that got $2.5 million in unemployment benefits

Full report here

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Dutch group to host Global Online Fraud Summit on November 13; free online registration

FTC releases annual report to Congress on efforts to protect seniors

Lose most money to Romance scams; #2 gov’t imposters; #3 lottery scams

FTC data shows huge increase in scams starting on social media

• Losses in first half of 2020 nearly equal to all 2019
• Top losses are goods ordered online but never delivered
• 94% of scams starting with social media Facebook or Instagram
• Fivefold increase in pyramid and MLM complaints

Oh no! Paypal announces it will let people buy and sell bitcoin

US indicts six Russian military officers over malware, hacking, ransomware; caused at least $10 billion damage

Virus benefit theft

• Rhode Island: Four from Florida arrested for theft of virus benefits
• Well Fargo fires 100 who were involved in PPP fraud separately
• San Francisco man charged with theft of $22 million in PPP fraud
• The IRS has hundreds of investigations of virus relief scams
• Virginia man arrested for $2.5 million PPP fraud
• Memphis, Tennessee: Three charged with PPP fraud; got $1.1 million
• Rapper arrested after he posts video of his new song about illegally getting unemployment benefits; got $1.2 million
• UK launches new COVID fraud hotline to report
• Louisiana woman arrested for having California unemployment benefits of others

Tip of the week: How do we know how much fraud there is?

A 2004 FTC fraud survey, based on phone calls, found that only 8.4% of fraud victims ever complained to the BBB or law enforcement. (page ES-6).  Of course this means that over 90% do not.  Some people don’t even realize they’ve been ripped off, others are embarrassed.  Some may not know where to go. 

Full report here

Top Stories
Agari issues new study on Business Email Compromise Fraud; scammers now located around the world, 25% operate within the US; 900 US mules identified

Microsoft gets court order shutting down Trickbot botnet in effort to limit ransomware attacks

Virus benefit theft

• Texas man charged with PPP fraud; took in at least $24 million; bought homes and a Bentley
• Worcester, Massachusetts:ID thieves used information from 550 city employees to file fraudulent applications for unemployment
• Los Angeles: Woman arrested for fraud in getting unemployment benefits; used identity theft; received $500,000

Tip of the week:How do we know how much fraud there is? 

• We don’t.It is hard to measure.In the US the FTC has done phone surveys several times to try and get a good measure, in 2004, 2007, and 2017.
• There are national databases that try to centralize complaints in Canada (the Canadian Anti-Fraud Centre); the UK (Action Fraud); Australia (ScamWatch), and in the US the FTC’s Consumer Sentinel Database and the FBI’s Internet Crime Complaint Center.The FTC and IC3 once shared information, but unfortunately no longer do.
• I am not aware of any centralized database for European countries, or in South America, Africa, or Asia.I presume in these locations complaints go to local civil consumer protection authorities or local police.
• But 35 countries cooperate with complaints filed in many languages at econsumer.gov.
• If you know of another government database that centralizes scam complaints please let me know.

Full report here

Top Stories

Very good podcast on the Black Axe, (Nigerian Organized Crime); where they came from, what they do, how they work with the Italian Mafia in prostitution (30 min.)

Europol releases annual cybercrime threat assessment; problems getting worse

US Treasury warns of fines against those who pay ransom; FinCEN says may need to file Suspicious Activity Reports

Virus benefit theft

• CEO of Hawaiian defense contractor charged with PPP fraud; took in $12.8 million
• Oakland man from My Black Muslim Bakery charged with PPP fraud

Business man in Madison, Wisconsin pleads guilty to PPP and a second fraud as well

Full report here

Top Stories

FBI warns of potential for foreign actors to try and affect voting; stress no evidence of this so far

FTC announces nationwide effort to tackle “phantom” debt collectors; collect money that is not owed

• This scam often targets people in real financial difficulties
• Over 50 actions by FTC and state/local partners
• Three new FTC cases; settlements of three previously filed
• Two CFPB cases
• Criminal cases announced as well
• Chart of cases filed here

Plans to expand and improve UK Action Fraud hotline

Virus benefit theft

• Riverside, California: Police investigating 200 cases of theft of unemployment benefits
• Pittsburgh:  20 inmates and accomplices charged in theft of unemployment benefits; 10,000 inmates nationally engaged in this scam
• UK watchdog agency warns of dangers in virus relief payments
• Massive problems and fraud in Ohio virus benefits
• Georgia loses $4 million to virus relief fraud
• Police in Burbank, California arrest six for theft of unemployment benefits
• North Carolina man charged with PPP fraud; sought $6 million; got $1.7 million
• Rhode Island: Man pleads guilty to PPP fraud

Full report here

Top Stories

BBB releases my new study today on online sales of cars, RV’s and other vehicles that are never delivered

Advertise on Craigslist and other online platforms

Claim must sell quickly and cheap because of divorce, deployment overseas, or that car belonged to dead son or husband

Have people do bank to bank wire transfer to supposed third party escrow company; really goes to crooks

Largely the work of Romanian organized crime gangs

FBI warns of dangers from foreign disinformation on election results

FTC sending $147 million in refunds to victims from settlement with Western Union

Thousands of Suspicious Activity Reports (SARs) leaked from FinCEN to Buzzfeed; highly confidential investigation records

Europol announces worldwide effort to disrupt sales of illegal items on the dark web; 179 arrested

The rise and fall of Nigerian Instagram star Hushpuppi; in jail for laundering BEC money

Virus benefit theft

• Thieves using stolen unemployment benefit cards spending big in Beverly Hills stores; 44 arrested
• Ohio: Three from Florida indicted for stolen identity refund fraud for tax refunds; also got stimulus payments
• Albany, New York: Man arrested for PPP fraud; got nearly $5 million
• Montana man charged with PPP fraud
• Miami: Houston man charged with PPP fraud; got $1.2 million
• California stops unemployment claims for two weeks to deal with fraud issues
• Rhode Island: Man previously convicted of bank robbery charged with PPP fraud; got $4.7 million

Coronavirus

• Police in Indonesia arrest three who sold $4.3 million of PPE to Italian organization but never delivered
• Ottawa Public health warns of scam callers impersonating them and asking for money to perform COVID tests

Phishing, BEC fraud, spyware all peaked during the pandemic

Full Report here

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New York Times on rise in money mules during pandemic; reshipping scams, romance fraud, and others

Montreal police arrest 12 in massive romance fraud; expect six more arrests in the Ivory Coast; at least 50 victims and $2.3 million losses

US indicts four, including two Canadians, for mass mailings claiming victims had won and needed to send back a small payment to get prize money; tens of millions in losses; also violated Postal consent decrees

Virus benefit theft

• Maryland has frozen unemployment benefits of thousands over concerns about fraud
• DOJ announces it has now filed criminal charges against more than 50 people over PPP fraud
• South Carolina: Seven charged with laundering money for PPP fraud; at least $2.1 million involved
• Miami:  Jets wide receiver, nine others charged in $24 million PPP fraud scheme
• Buffalo: Two brothers arrested for PPP fraud; sought $7 million
• Man in Detroit pleads guilty to PPP fraud; got $590,000

Coronavirus

• Customs seizes 500,000 counterfeit N95 masks at O’Hare
• Full report here

Virus benefit theft

• Florida: Roofer arrested for PPP fraud; got $2 million and bought a $700,000 boat
• New Jersey:  Lawyer arrested who got $9 million in PPP loans
• Salt Lake City:  Man pleads guilty to PPP fraud
• Virginia: Woman pleads guilty to PPP fraud
• Ohio: 3 from Florida charged with stolen identity refund fraud and stimulus payment fraud; took in at least $1 million; stole PII on the dark web and used IRS e-verify system to make sure it was good

Coronavirus

• At request of Interpol, Nigeria arrests two for defrauding German company of €14.7 million in nonexistent PPE

History review and recommendation of the week:  American Lion, a biography of Andrew Jackson, by John Meacham.  Once the hero of the New Deal, he is now vilified.  But the story is far more complex, and he is far more interesting, than the detractors know. He adopted an Indian boy as his son.  He saved the Union from the first secession attempt.  And of course winning the Battle of New Orleans was hugely important for the infant United States.

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, government imposters and rental fraud

Fraud News From Around the World

• CFTC sues five Canadians, others for $165 million binary option fraud operating around the world
• India arrests man for defrauding US and Canadian victims by claiming to be tax or immigration official
• India arrests two Nigerians for hacking into a bank
• Puppy scams soar during pandemic
• Twitter hack of India PM Modi to push bitcoin investments
• Waterloo, Ontario: Woman arrested for puppy scam
• North Carolina: Money mule gets five years prison; handled funds for BEC scams, romance fraud, and account take overs; sent most money to west Africa
• Nigeria arrests 13 yahoo boys in Lagos for cyber fraud
• Police in Milton, Ontario investigating moving scam
• Man convicted of laundering money in the UK over text messages that seemed to come from victim’s bank
• Washington State: Attorney General wins $10 million fine against duct cleaning company that made millions of robocalls
• East St. Louis: Four charged for fraud; used ID theft to buy new cell phones and resell them
• Philippines arrests four Nigerians for hacking banks

Full report here

Top Stories

US Agencies warn of North Korean hacking group that is hacking and robbing banks around the world

Jamaican Police Superintendent in charge of lottery scam task force shot and killed

Herbalife resolves SEC and criminal charges under the Foreign Corrupt Practices Act for business in China; to pay $123 million

Virus benefit theft

• DOJ has brought 41 criminal cases against 60 people so far for PPP fraud; small business administration hotline got 800 calls on fraud last year, 42,000 so far in 2020
• Miami: Two with fake identities arrested for PPP fraud
• Florida: Two neighbors charged with fraud; got 1 million in PPP loans; pretended to be farmers
• Useful statistics on the extent of bogus unemployment scams in the US; about ¼ of all claims in Washington State
• Chicago: Owner of already closed suburban restaurant indicted for PPP fraud
• Congress investigation finds over $1 billion in PPP fraud
• Michigan: Man arrested for PPP fraud

Coronavirus

• University of California Santa Barbara medical school finds over 2000 bogus posts on social media for virus treatments, etc.
• North Carolina: Man pleads guilty to virus fraud schemes; offered virus loans to both small business and individuals; also sold goods online he never delivered
• DOJ shuts down 300 websites from Viet Nam that “sold” hard to get virus products but never delivered

History review and recommendation of the week:  Undaunted Courage, by Stephen Ambrose.  How Thomas Jefferson decided to send an expedition to explore the West.  The incredible trek of Lewis and Clark over two years or more.

Full report here

Top Stories

Texas: Nigerian living in Canada extradited over Toronto-based scam sending sweepstakes mailings containing counterfeit checks; elderly victims lost at least $900,000: also did stolen identity refund fraud

Virus benefit theft

• Pennsylvania: 33 inmates and accomplices charged in unemployment benefit scam
• Detroit: Man indicted for fraud in getting unemployment benefits from Michigan and Pennsylvania
• Illinois unemployment benefit site suffers data breach; identities of 32,500 gone; social security numbers stolen
• Minnesota man charged with fraud in applying for PPP loans; got $841,000; spent money on motorcycle and golf
• UK arrests woman for fraud in applying for virus small business loans; freeze £115,000 in bitcoin proceeds
• Michigan: Two charged with fraud in getting virus unemployment benefits; took in $1.8 million
• Massachusetts charges man with fraud in seeking unemployment benefits
• Virginia man pleads guilty to PPP fraud
• North Carolina: Man charged with seeking $414,000 in virus relief benefits

Full report here