Baker Fraud Report

Inside the crypto romance industry; billions stolen; suicides of victims; call centers where people are kidnapped

Need an expert witness for consumer protection or fraud issues?  Let me know.

Fraud Studies: Here are links to the studies I’ve written for the Better Business Bureau: puppy fraud, romance fraud; BEC fraud, sweepstakes/lottery fraud,  tech support fraud, romance fraud money mules, crooked movers, government imposters, online vehicle sale scams, rental fraud, gift cards,  free trial offer frauds,  job scams,  online shopping fraud,  fake check fraud and crypto scams

Fraud News Around the world

• Singapore: Police arrest 316 money mules and scammers in anti-fraud push
• India busts call centres phoning the US with government imposter frauds
• San Diego: Prosecutors have a major effort to tackle fraud committed by Romanian gangs; at least some of them gypsies
• San Diego: Husband and wife get prison for laundering money for unemployment fraud and jewelry heists from homes
• New York: Bulgarian  man pleads guilty to international scam that sent bills to churches; doctors offices and small businesses for Yellow Pages ads that never ran; brother also pleads; follows FTC case against them; collected money in Canada: made at least $1.24 million
• Ireland arrests nine members of Nigerian Black Axe gang; seize €1.1 million
• Cape Town police seize R100 million in counterfeit goods
• Boston: Woman pleads guilty to scheme to use stolen ID’s of those from Puerto Rico and then buy cars and arrange financing in their names
• Canada:  Scammers in Alberta dressing up in RCMP uniforms to scam people in person
• Auto glass repair people roam parking lots in Florida; offer to fix cracked windshields; send huge bills to insurance companies; car insurance premiums skyrocket; only in Florida
• Los Angeles: Man gets eight years prison for SIM swapping, taking over social media accounts, impersonating Apple support; ordered to pay $1.2 million resitution
• Over 2 billion robocalls in the US last month
• New study finds 70% of people have been deceived into buying counterfeit goods in the last year; mainly online, and most on social media; younger people more likely to be victims
• Tampa: Man from India sentenced to more than four years prison for laundering victim money from scammers in India impersonating Social Security, FBI, and IRS
• South Carolina: Two men get one year prison each for sales of counterfeit goods such as team sports jerseys

Humor

• Rolling Stones announce tour next year that will be sponsored by AARP

FTC and CFPB

• FTC returns $3 million to businesses that paid for memberships in HomeAdvisers that were deceptively advertised
• CFPB resolves case with Bank of America over not collecting demographic data for mortgage applicants; to pay $12 million

Artificial Intelligence and deep fake fraud

Virus Benefit Theft

• San Diego: Romanian  man gets 40 months prison for his role in unemployment fraud case; got $5 million; part of a group of 200 people in scheme

Social media

• Hong Kong travel agents ask police help as wave of social media accounts impersonating them collect money – and just steal it

Kidnapping and forced to scam

• 127 Malaysians rescued from scam centers in Myanmar

Business Email compromise fraud

IRS and tax fraud

Ransomware and data breaches

• Hits largest real estate title company in the US; affects closings
• Attack on service provider CTS, which provides support for UK law firms
• Hits town of Nassau Bay, Texas
• Attack on French government unit that runs internationals schools
• Hits Vanderbilt University medical center in Nashville
• Attack on large US auto part retailer AutoZone; lose data on 185,000
• Hits Toronto Public library; systems to be down until the end of the year
• Attack on Egyptian fintech company Fawry
• Gang claims attack on Crystal Lake Health Center in Michigan
• Closes emergency rooms in two New Jersey hospitals
• European law enforcement bust ransomware operation in Ukraine; 4 arrested, 30 searches conducted

Bitcoin and cryptocurrency

• Heco hack results in losses of $87 million
• Mastercard teams with AI company to fight digital money laundering and fraud
• Nigeria: Politician arrested for theft from crypto wallet
• Hong Kong citizens lose $15 million to crypto scam

ATM Skimming

• Springfield, Missouri: Two arrested for ATM skimming

Jamaica and Lottery Fraud

• Pennsylvania: Three Jamaicans convicted by jury of lottery fraud; pretended to be Publisher’s Clearinghouse

Romance Fraud and Sextortion

• Nigeria: Man gets a year prison for romance fraud; pretended to be white woman from the US
• Ireland arrests man for romance fraud
• Nigeria arrests three men for romance fraud
• Romance scam complaints drop in Australia
• India arrests man for romance fraud; used Facebook to contact victims
• Two women in the UK who are romance fraud victims set up operation to offer victim support services
• Tennessee: Two Nigerians arrested for romance scam; victim committed suicide

Better Bureau updates my 2021 study on gift card fraud

• Complaints to the BBB are up 50% this year over last
• Most involve online shopping schemes

McAfee releases first global scam message survey; finds people get an average of 12 fake messages every day by email, texts, or social media

• Messages people are most likely to click to open:
• You’ve won a prize!” – 25%
• Fake missed delivery, or delivery problem, notification – 20%
• Information about a purchase the recipient didn’t make – 22%
• Sign in and location verification messages – 20%

Australia warns of fake online stores impersonating real ones; has found 2670 sites so far with bit losses

AI is definitely here: A friend of mine took some voice from a podcast I did, and a bit of video from an old press event, and came up with a video of me that has totally new statements from me that I never said.  See it here.  He used free software he found online.

CEO of largest US crypto exchange to step down, plead guilty, and to pay $4.3 billion over anti money laundering issues

Full report here

New study on online sextortion

• This involves blackmail and money demands, unlike other conduct often referred to as sextortion
• Victims most often meet on Facebook, perform sex acts before a camera, and then demand money or threaten to release video
• Data drawn from Scamsurvivors.com site
• Victims most often males in their 20’s
• Most often originate from the Philippines, then Ivory Coast and Mali

Credit repair firms drive big increase in synthetic identity theft, provide consumers with fake social security numbers to challenge credit reports or get a new credit identity; losses of $20 billion
Payment App Zelle is now giving refunds to victims of imposter scamsProvides online form here to apply for refunds

Bob Sullivan podcast interview for AARP with a man who was kidnapped and forced to scam – and escaped

Minnesota: Jury finds three guilty in massive telemarketing fraud selling magazines; got $300 million

Say Yes Scams.  We’ve heard various concerns about phone scams that ask you to “say yes” or “can you hear me now.  There are a variety of theories about what scammers do with that information.  But one consumer group has looked hard for evidence that this tactic is actually used in scams – and has found none.  My own suspicion, only that, it that the computers used to make robocalls use this tactic to confirm that a real person it out there, and it not a fax or answering machine.

Need an expert witness for consumer protection or fraud issues?  Let me know.
Fraud Studies: Here are links to the studies I’ve written for the Better Business Bureau: puppy fraud, romance fraud; BEC fraud, sweepstakes/lottery fraud,  tech support fraud, romance fraud money mules, crooked movers, government imposters, online vehicle sale scams, rental fraud,gift cards,  free trial offer frauds,  job scams,  online shopping fraud,fake check fraud and crypto scams

Fraud News Around the world

• Florida: Couple arrested for sales of counterfeit goods; had $400,000 in goods
• India seizes millions from operation that laundered money for tech support, loan, and other scams aimed at the US, UK and Australia
• Apple settles class action charging it over gift card fraud for $1.8 million
• Big recent increase in scam that steals money from online bank accounts by texting victim impersonating bank, telling victim they will then call them, claim problem with account and need to move money to different account
• Scammers sending texts using QR codes was up 50% in September
• London: Three sentenced for selling counterfeit underwear on eBay; made £394,000
• Oklahoma: Ten indicted for fraud in claiming refunds from online marketers; did this themselves and also got customers to make purchases and share information with them  
• Interpol report looks at increase in money laundering by “cyber-related fraud”
• Large scale scam operations advertise guns and ammo online, take payment, but never deliver; website stopgunscams.com takes complaints and reports on scam sites

Humor

• Alaska man caught counting cash outside bank after he robbed it is caught again trying to rob the same bank
• Nebraska man arrested for drunk driving after calling 911 reporting car going wrong direction – and it was him

FTC and CFPB

• Federal court stays CFPB subpoena until the Supreme Court rules on agency’s constitutionality
• CFPB sends refunds to victims of student loan debt relief fraud; to get $240,000
• CFPB fines online lender Enova $15 million for withdrawing money without permission, violating earlier order
• FTC settles with company that provides phone services of prisons and jails; promised great data security and did not have it; must notify users of breach

Virus Benefit Theft

• Kansas City: Former bank manager pleads guilty to aiding $12 million PPP fraud
• Palm Beach: State arrests three for PPP fraud; got $12 million
• Miami: Three charged in conspiracy over PPP fraud; got $14.5 million
• Virginia: Gang member who was in prison organized unemployment benefit fraud effort that got $210,000; sentenced to 68 months prison
• Kansas City: Man indicted for PPP fraud; got $900,000

Social media

• Google sues unnamed individuals in India and Vietnam who are advertising free AI on Facebook to small businesses, but when victims click to get it malware steals their Facebook login credentials

Kidnapping and forced to scam

• BBC: Armed insurgents in area of Myanmar that contain scam call centers try to topple military rulers of the country
• Chinese government issues arrest warrants for crime family involved in scam call centers in Myanmar
• South Korea says 19 have been rescued from Southeast Asia Call Center

Business Email compromise fraud

• Connecticut:Court forfeits $1.1 million stolen from local board of elections in a BEC fraud case

IRS and tax fraud

• Texas: Man gets 30 months prison for stolen identity refund fraud
• Nashville: Three indicted for stolen identity refund fraud; got $1.5 million

Ransomware

• Hits Toronto public library
• Attack on ICBC, China’s biggest bank
• Hits fundraising arm of group of five hospitals in the UK
• FBI says Ransomware gang has hit 350 organizations and demanded $275 million in ransom in the last year

Bitcoin and cryptocurrency

• Lloyd’s bank warns crypto scams up 24% in the UK, and mainly affect younger people
• New York: Former One Coin executive pleads guilty to fraud in multilevel marketing crypto fraud operation run from Bulgaria
• Binance freezes $12.5 million stolen from its executives after they were kidnapped
• India arrests three Nigerians for crypto mining investment fraud
• Brooklyn: Develop of nonfungible token (NFT) pleads guilty to rug pull, fake international investment; to return $1.5 million
• Scammers are now sending messages on Twitter supposedly from security at crypto operations saying funds are at risk and must be moved — to sites owned by scammers

Jamaica and Lottery Fraud

• Scranton, PA: Jamaican man extradited to the US gets 16 years prison for lottery fraud

Romance Fraud and Sextortion

• South Africa: Man arrested for romance fraud; pretended to be airline pilot
• Canada: Peel police arrest man for romance fraud; had claimed to be working on an oil rig; got $250,000 in crypto from victim
• Nigeria: Man gets one year prison for crypto invesment/romance fraud against American woman

Just for fun: Highwaymen, by Johnny Cash, Waylon Jennings, Kris Kristoffeson and Willie Nelson

Top Stories

Florida: Two Nigerian men get 10 years and 7 years prison for inheritance fraud that sent letters supposedly from bank in Spain to older Americans claiming that they had an inheritance; demanded fees to get the money; laundered money through other victims; duo had been extradited from Spain

Enforcement efforts are working!  New FTC report shows robocalls complaints have fallen to a five year low

New BBB Scam Tracker report on frauds hitting younger consumers

• Those 18-24 have highest median dollar losses than any other group
• Top three frauds for this group are online shopping, job frauds, and crypto investments

WSJ:  Chinese criminals behind crypto romance frauds in SE Asia, and China is trying to crack down on it

Three extradited to the US from Morocco and Romania; had run reshipping scheme from Russia that used stolen credit card information to order goods online and be shipped within the US, and then had goods reshipped to Russia and Eastern Europe; at least $48 million involved

Review and recommendation:  I just finished Walter Isaacson’s biography of Elon Musk.  It is fascinating.  Creator of PayPal, Space X, Tesla, the Boring Company, and several other companies that would be great accomplishments standing alone.   Plus now Twitter.  And he’s not done yet.   Like Ford, Edison,  Rockefeller,  Carnegie and Vanderbilt he’s made a big improvement in everyday lives

Full report here

Australia busts massive operation run by China that laundered fraud money from around the world; handles $229 million; seven arrested; $50 million in property seized

Quebec arrests 17 in $5 million real estate scheme; used ID theft to get mortgage loans on houses they didn’t own

Vermont: Woman from India who lived in Florida pleads not guilty when charged with tech support fraud where victims were contacted by email claiming to be from Geek Squad; moved money from victim’s savings accounts to checking, and claimed they had accidentally made too large a “refund” and victim to return “excess” to them; part of a larger group charged

Full Report here

Top Stories

India: Five from Nigeria convicted of black money scam; convinced victims to invest in chemicals that could supposedly remove ink from trunk full of cash

Malaysia: Police say that in the last nine months they are arrested over 1000 scammers from fraud call centers, raided 148 locations

Full report here

Global scam study concludes 25% of people worldwide have been scam victims with losses of over $1 trillion

FTC issues new report to Congress on frauds against older victims

• Investment frauds; tech support scams and business impersonation top the list

DOJ releases report on elder fraud to Congress

Tampa: Man extradited from Moldova and charged; sold computer passwords on the dark web; had at least 350,000

India undertakes national crackdown on tech support operations; raids 76 locations

India: Mumbai police raid call center defrauding Canadians by claiming they were law enforcement and need to keep victim money “safe;” five employees leap from top of one story building to escape and are injured; 17 arrested

Full report here

Top Stories

FTC releases study with data on scams that begin on social media

• One quarter of victims reporting since 2021 say scam began on social media, with losses of $2.7 billion
• More than any phone, email or any other method of contact
• Younger people hit harder; 47% with victims 18-19; 38% of those 20-29
• 44% of losses due to online shopping where goods were never delivered, mainly clothing and electronics
• But 53% of the money lost was to investments; mainly crypto romance fraud

Full report here

At least some police really can recover crypto stolen by scammers

Los Angeles: Three from China convicted by jury of gift card fraud; callers overseas claimed to be police or other authorities and assessed “fines”, also worked for tech support scam; had victims buy Target gift cards, which defendants laundered; handled $2.5 million

Full report here

North Carolina: Nigerian man found guilty after trial for scheme that contacts lawyers and asked to be represented; sent them a fake counterfeit check as payment, and then canceled and asked for a refund by bank transfer; got over $20 million
 
New Jersey: Two men from India get 41 months prison each for fraud that used robocalls from India to impersonate the Social Security Administration or the FBI and DEA; handled $1.2 million of victim money
 
New Facebook scam claims to be giving away laptop or Playstation, but asks for money to pay shipping; no product exists

Australia reports that scams calling Chinese speakers, claiming to be with the Chinese government, and threatening arrest or deportation, have recently doubled; demand victims pay a “fine.”

India busts eight tech support fraud call centers; arrest over 200

Full Report here