Baker Fraud Report

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

Top Stories

Los Angeles: Criminal charges against Nigerian man, Ray Huspuppi, who was expelled from the UAE

• Laundered hundreds of millions from BEC scams
• Social media influencer; flaunted wealth; famous in Nigeria

Las Vegas woman pleads guilty in fraud that sent mailings to seniors telling them they had won sweepstake and needed to send back a fee to claim money; took in $10 million

Ukraine arrests 20 over ransomware scam; laundered $42 million

First ransomware prosecution in years?

Virus benefit theft

• Los Angeles: Man indicted for $1.7 million PPP small business loan fraud; he has fled the country for Belarus
• Las Vegas woman charged with $1million in fraud in small business loan scam
• Washington DC man arrested after fraud in obtaining $2 million in PPP loans; used money to buy a yacht
• UK arrests woman for fraud in trying to get virus small business loans; seize £115,000 in bitcoin
• Salt Lake City: Man charged for fraud in applying for small business PPP loan
• San Mateo County, California:  21 arrested at county jail using ID theft to apply for unemployment benefits; took in at least $300,000
• New York: Taiwanese man charged with fraud in applying for small business PPP virus loans; took in $7 million
• Arizona investigating more than a million unemployment applications for possible fraud
• Ohio stopping $200 million/week in fraudulent unemployment payments; Nigerian Scattered Canary group involved in such fraud there and in 14 state; criminal investigation underway
• Coronavirus
• Isis terror group sold counterfeit N-95 masks to finance their efforts
• Australia finds 55% increase in identity theft during the pandemic
• FTC  finds identity theft is now #1 scam in the US during pandemic
• Free trial offer scams now claim to be selling virus prevention/cure products

Full report here

Top Stories

Update to 2018 BBB study of prize/lottery/sweepstakes scams finds 80% of the money lost is from victims over 65

Appeals court rules police do not need a search warrant for bitcoin transaction records

Check that Zoom invite: Phishing scams now pretending to be schedulers

Minnesota: Third person arrested in magazine scam; he was fleeing to Canada; called elderly to “renew” magazine subscription and charged them; at least $100 million in losses; call centers in Florida and southern Missouri; two others have pleaded guilty

Virus benefit theft

• Illinois suffers 121,000 cases of theft of unemployment benefits
• Criminal charges against nine for fraud in PPP small business virus aid
• Maryland may have $500 million in fraud with virus unemployment benefits; 47,000 fake claims identified
• DOJ charges five more people with fraud in efforts to get small business PPP loans; took in $4 million
• Arkansas man pleads guilty to bank fraud in seeking $8 million in PPP loans
• Ohio virus unemployment fraud losses may be $200 million every week
• Miami:  Nine charged with PPP fraud; defendants from Florida and Ohio
• Many getting letters with California virus benefits they did not apply for
• New Phishing campaign pretends to be from Small Business Administration; seeks banking details
• At least 700 in Canada have had ID thieves apply for CERB virus benefits in their names

Coronavirus

• ACCC in Australia investigating travel agencies for misleading customers about refund policies during pandemic

History review and recommendation of the week:  One of the best things I’ve read in a long while is Guns, Germs, and Steel by Jared Diamond.  Where did civilization first develop and why? Why did European diseases ravage native Americans instead of their diseases wiping out new settlers? Fascinating.

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

Read full report here

Top Stories

California:  Three arrested for celebrity twitter hack; two from Florida, one from UK

People across the US and Canada are getting seeds in the mail from China – that they didn’t order. 

• What gives?  It’s possible that this is something that is being called “brushing.” 
• They send you goods and then post a positive online review in your name for some other product;
• BBB alert on brushing scams

Virus benefit theft

• Chicago Heights police find theft of Nevada unemployment benefits during a traffic stop
• Scammers use name of Arkansas governor to apply for unemployment benefits
• US has 30 prosecutions so far for bogus small business PPP loans

Coronavirus

• Los Angeles settles with company that sold radish paste as a virus cure
• Hackers tied to Chinese government try to get Moderna vaccine research

Tip of the week: Paypal woes/glitch.  The BBB warns that it continues to see online orders where goods are never delivered but the victim does get a tracking number – where the goods were actually shipped somewhere else. Because the item was actually delivered (to someone else) Paypal (at least initially) won’t cover losses.  There are hundreds of complaints about this.

Full report here

Top Stories

BBB releases my new study on government imposter scams

• Claim to be calling from Social Security, IRS, US Marshalls about jury duty, etc. and threaten to arrest you
• Tens of thousands of complaints; $450 million lost 2105-2019
• Threaten immediate arrest; study details what happens in calls
• Want people to buy gift cards; changing now to want cash by mail
• Calls mainly from India; country can do much more to help
• DOJ efforts to block VoIP calls coming into the US effective; robocall complaints in the US are way down; no decrease in Canada
• 91 US prosecutions of those laundering money for this scam

Virus benefit theft

• US losses to fraud in unemployment may be $26 billion; amount usually paid out legitimately in a normal year
• Dozens in Chicago get virus unemployment relief cards in the mail they did not apply for; crooks apparently failed to get mail forwarded to them
• Illinois Attorney General himself receives benefit card he did not apply for
• 185,000 bogus unemployment benefits claims filed in Nevada
• People in Arkansas report getting unemployment benefits they didn’t apply for
• North Carolina suffering from fraudulent unemployment claims
• Unemployment fraud also a problem in California
• Rhode Island:  Feds nab man who faked his death after being charged for fraud in getting virus small business loans
• Two in Tulsa arrested for fraudulent small business loans
• Guam: bogus unemployment claims delay getting money out to people that need it
• Florida man arrested for getting $3.9 million in bogus small business PPP loans; bought himself a Lamborghini
• National Consumer’s League warns of theft of unemployment benefits

Coronavirus

• Survey finds 27% of consumers worldwide have seen phishing attacks with a virus theme
• Over half of counterfeit virus goods coming from China

Quote:  Dr. Robert Kirkpatrick: “Civilization is maintenance”

Full report here

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