Baker Fraud Report

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

Virus Data

People are totally freaked out by the virus, and it is reshaping lives and the future in often unpleasant ways.  We know that there is a risk, but we also want to know just how big that risk is. We all want accurate scientific data, but despite a flood of information out there, it is difficult to find really reliable information that is not colored by politics.  So here is one piece of information people may find useful.

How do we know if we’re making good progress against the virus?  It turn out it is hard to find out.  Several of the public metrics that are almost always used are less than useful. 

New virus tests:  Testing is expanding rapidly, and most of those tested turn out negative.  But of course if you test more people you are going to find more that test positive.  So it is hard to see trends from that data.

Total hospitalizations: This is also a common feature for graphs, but since those hospitalized may be there for a long period, they are a poor way to show trends.

Deaths:  Again, those who die may be hospitalized for a long period.  Thus even if the virus magically disappeared tomorrow there would still be deaths in the days to come.

New daily virus hospitalizations:  In my view, this is a great indicator for trends. It shows those people that have the virus and are really sick, and it can readily be tracked over time.  Unfortunately, many states don’t seem to report this rate, so I was only able to find it for New York City. But that is the hardest hit place in the U.S.

The graph below is from Monday, May 11.  But it clearly shows that new virus hospitalizations have gone down rapidly, suggesting that the worst of the problem may be gone. https://www1.nyc.gov/site/doh/covid/covid-19-data.page

Top Stories

YouTube filmmakers reach out to IRS impersonator in India; interview him; raise money to help him get an honest job; scammer says they know when police are going to raid them

New York AG settles with Zoom over privacy issues during shut down

Coronavirus

• Worldwide problem with antibody tests that come from Chinese and other murky sellers and often don’t work
• US Customs partners with major companies to fight counterfeit virus supplies like PPE
• Nigerian business email compromise gangs now targeting healthcare agencies and organizations with virus-themed phishing emails
• Hackers very active in seeking people’s information to file bogus tax returns or apply for virus relief; even dumpster diving at tax prep companies
• RCMP in Canada seizes 1500 fake virus kits; make arrest
• France seizes 440,000 face masks from smugglers
• Huge spike in pet scams during shut down
• 25% of people in the US are late in paying mortgage or rent
• ACCC in Australia has received over 6000 complaints about travel

Full report here

Thought of the week:  Why is it so hard to get accurate information about Covid19?  At the FTC the philosophy is that given good information people overall make good decisions. They will do OK.

Coronavirus

• Rhode Island: Criminal charges against two that fraudulently applied for $500,000 small business loan
• Arizona: 900 of bottles of totally diluted bleach seized, along with fake virus test kits
• Virus making it harder for scammers to get their money mules to go out and do tasks for them
• Canada has taken down over 1500 virus scam websites
• Canadian PPE suppliers being targeted with orders impersonating other companies; ship equipment to London, where it is forwarded to Nigeria
• Brooklyn: Man arrested for stealing stimulus checks from mail boxes
• Counterfeit PPE coming out of China and Taiwan
• Chicago college student ripped off hundreds by selling toilet paper he never delivered; used ads on Facebook
• Online mask order said it was from the US, but really shipped from China; how scammers manipulate postal tracking numbers
• Ad monitoring group tells FTC that Herbalife is making virus claims
• Postal Inspectors set up web site for virus scams
• Fake Pizza hut websites being set up to steal credit card info

Virus shutdown fuels pet scams (My BBB study on pet scams here)

• Pet scams up 42% during shut down warns National Consumers League
• Petscams.com also reports a big jump in this fraud
• So  does Buzzfeed
• Big spike in pet scams in the UK

Tip of the week: Online shopping, counterfeits and fraud. With so many stores closed people are increasingly shopping online for common goods.  But a large part of those are actually counterfeit.  In fact, over half the goods sold on Amazon are by “third party sellers” that ship directly to victims and not from Amazon; usually from China. Huge numbers of complaints to the FTC and BBB are from people who shopped online, paid with a credit card, and never received anything at all.  So make sure goods you receive are authentic, and call your credit card company and dispute the charge if they are counterfeit or never arrive.  And see my BBB study on counterfeit goods fraud

Prediction:  Bankruptcy! We are almost certainly coming up on a flood of individuals and businesses that can’t pay rent, mortgages, credit card bills, etc.  So expect a large wave of people in financial distress.  And the scammers will be out there to take advantage. Watch for scam debt collectors, mortgage, student loan and credit card debt and other financial relief frauds.

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, and rental fraud

full report here

Top Stories

Coronavirus — Masks

• San Francisco: Michigan man arrested and charged for “selling” N95 masks online he never delivered
• US Customs seizes 2000 Chinese counterfeit N95 masks in Cincinnati
• UK recalls 2700 facemasks from police after learning they had fake certifications
• France seizes 14,000 counterfeit masks
• SEC sues Florida corporation that claimed it could provide masks when it could not
• Behind a company selling overpriced masks with over 1 billion emails; some not delivered; operated by a Portuguese millionaire

Coronavirus – Other scams

• New York AG sends warning letters to air purifier company over claims they can prevent virus
• Flaw at online portal of Small Business Administration may have exposed info on 8000 applicants; no misuse so far
• DOJ takes down hundreds of  virus-themed domains
• UK took down over 2000 such sites
• India swept by Ponzi scheme with virus theme
• Phishing emails want Zoom log in info OR pretend to be HR with new pay to install malware
• Ticketmaster to refund money for postponed/canceled events
• Detroit: criminal charges against Doctor that billed Medicare for vitamins he prescribed as virus treatment
• FTC gives dos and don’ts for small business loans for virus
• UK warns scammers have set up fake copies of National Health Service site; get personal information from victims
• Three types of virus frauds to avoid; notes impersonation of Johns Hopkins virus site

Full report here

Top Stories

Hackers stole Facebook information on 267 million people; database for sale on dark web for $600; researchers set up site to check if yours stolen

Your rights if you’ve canceled an airline flight because of the virus

BBB releases update two years after study on free trial offer/subscription trap study; Visa and MasterCard adopt new policies; more FTC lawsuits

VISA announces new policies to fight free trial offers scams: “Specifically, cardholders will benefit from receiving the following — via email or text — from the seller they initiated a trial or introductory offer subscription with:

• immediate confirmation of the terms of the agreement
• proactive notification of any future payments at the end of the trial period
• instructions on how to initiate a cancellation”

FTC tips on stimulus check fraud

• Only use irs.gov/coronavirus to submit information to the IRS – and never in response to a call, text, or email.
• The IRS won’t contact you by phone, email, text message, or social media with information about your stimulus payment, or to ask you for your Social Security number, bank account, or government benefits debit card account number. Anyone who does is a scammer phishing for your information.
• You don’t have to pay to get your stimulus money.
• The IRS won’t tell you to deposit your stimulus check then send them money back because they paid you more than they owed you. That’s a fake check scam.

Coronavirus

• Fake pop up virus testing sites appear across the US; collect victim DNA, personal info, and $250 for bogus tests
• Contact tracing apps must respect privacy
• Europol warns of widespread counterfeiting of virus-related items
• Australians lose $138,700 to virus related online shopping scams – in one week
• Rental scammer uses virus as reason for not showing apartment in person
• US seizes counterfeit masks, medications, testing kits
• Scam text message tells people they have been exposed to the virus, must self-quarantine – and click a link to get details
• UK does search warrant on location sending text messages claiming to be from the government offering help with virus
• San Diego: criminal charges against Dr. offering hydroxychloroquine as “100% cure” for virus (but what if it turns out that this drug mostly does work?)

Read full report here

Top Stories

Please send us press releases!  The Fraud Report wants to keep everyone up to date on fraud issues. The media attention now is all about virus issues, so they may not report arrests or prosecutions. Send them along and we’ll include them here.

FTC releases data on international scams reported to econsumer.gov, fraud reporting site that shares complaints with 35 countries

• Can take complaints in many languages
• 2019 received 40,432 complaints
• Losses of $151.3 million
• Top complaints about products sold online, goods paid for but never received goods

Germany has to end small business loans because criminal gangs set up dozens of fake web sites to apply and get government money

Coronavirus

• Italy gives contract for masks and protective gear to two men previously accused of fraud for not delivering goods
• UK warns scammers are sending emails asking for donations in bitcoin to National Health Service
• Reno, Nevada:  Man arrested for stealing masks from veteran’s hospital
• Facebook sues cloaking software maker that lets those running virus scams evade the social media company’s filters
• BBC piece about online mask scams from Cameroon
• Chinese companies selling defective tests and protective equipment
• Georgia: man arrested for trying to sell Veterans’s Affairs hospitals  $750 million worth of masks and other gear he did not have
• Malaysia reports several organizations lost money to undelivered face masks advertised on Facebook
• 291 cases of counterfeit masks seized at border to Kenya
• Europol busts elaborate scam selling nonexistent face masks to governments; €15 million involved; fake web sites; some money recovered, rest went to Nigeria / Irish radio on this case
• Fraudsupport.org has tips if videoconferences are hacked
• State governments and hospitals being scammed for counterfeit or nonexistent masks and protective equipment
• FTC reports on the virus scams it is seeing; good news is that robocalls are down
• London: Pharmacist arrested for false claims while selling “virus test kits”

Tip of the week:  Counterfeit goods. With so many people shopping online right now there is an increasing danger of buying goods that are counterfeit, including of course things like masks and cleansers.  Be extra careful with third party sellers on Amazon. Check out 1 star reviews, where people often report that goods are not what they claim to be. And call to get a full refund on your credit card if you’re ripped off.  Here is the BBB study on counterfeits.

Full report here

Top Stories
 
Volunteer group identifies scam sites for masks and protective gear sold online but never delivered

• Perhaps the largest category of virus complaints we’re seeing now are scammers taking money for masks and protective gear and not delivering them
• Scam.directory has located over 300 such sites operating around the world
• This is by a volunteer group that also operates petscams.com
• Most scams are operated by the same gangs in Cameroon that run puppy frauds; here is BBB study on pets
• Many of the sites are registered in the U.S.
• They don’t just rip off individuals.Here is an article on a Greek pharmacy losing their money
• [email protected]

Scam email by a BEC scammer
A contact just got an email he thought came from a friend. It reads:
Thank you XXX. I should have called you to explain further but still can’t access my mobile phone. I  need you to kindly purchase 5pcs x $100 of either eBay or Target or Amazon gift cards which totals $500 as donation for the purchase of preventive items from Corona Disease (COVID 19) due to the vulnerability of Veterans at Hospice & Palliative Care .I will be liable for reimbursement.
 You can purchase them online as (e-gift card) or at any Kohl’s, CVS, Kwik, Macy’s, Walmart, or Walgreen’s Store. Due to the time frame of the pledge, I will be glad if you get them early enough today.
E-mail me immediately you buy them for instructions how to get them across. Let me know if a check will be fine for reimbursement. Thank you.
 Coronavirus 

• Canadian foreign minister warns of foreign (Russian) disinformation to panic the public
• BBB breakdown of virus complaints to date; 39% mask scams
• Czech police seize hundreds of thousands of masks and respirators meant for Italy and donated by China; apparently stolen
• Federal state virus task forces popping up
• Federal and State officials launch virus task force in West Virginia
• DOJ, HHS distributing vast amount of masks and medical supplies seized from price gougers
• Europol issues updated risk assessment for cybercrime during virus
• FTC warns grandparent scams are now claiming the kids are sick with virus
• FBI IC3 had 1200 virus complaints at end of March; warn of BEC and other scams
• FBI arrests Georgia man for submitting false claims of virus tests to get money from Medicare
• Europol has man arrested in Singapore; impersonated a real company and collected €6.6. million for sales of masks and hand sanitizer he never delivered
• Australia warns scammers are calling to get information about retired people’s superannuation (retirement funds)
• How supplement makers are turning to immunity boosting products – and everyone knows what they are implying these can help with
• US authorities break up scam where Australian claimed to have 39 million N95 masks in a Georgia warehouse and available to sell to Kaiser Permanente for $7 million; no charges to date
• UK man faces criminal charges in Los Angeles for selling unapproved virus treatment kits
• FBI says BEC scams increase and take advantage of virus
• Here’s another powerpoint on virus scams; focus on BEC

Tip of the week: Scams continue and will go after big money from the government There is no reason at all to think that scams are down right now; in fact I suspect they are up with so many people at home.  The courts have limited their schedules, so there may be fewer prosecutions, and the news media is currently covering very little that is not virus related.  But if anything scammers are surely redoubling their efforts. 
After previous disasters I’ve seen price gouging, bogus charities, and other scams during and immediately after they happen, but the really big losses come later with crooked/incompetent contractors or people inappropriately getting insurance or government benefits.  For example, we saw Nigerian scammers defrauding FEMA in the wake of Hurricane Harvey in Houston.  So get ready to deal with scammers looking for money from stimulus checks, business loans, and other assistance.  There lie the big bucks.

Full report here