January 12, 2017

Welcome to this week’s issue of the Baker Fraud Report. If you missed last week’s issue, you can see it here.

Tips for the New Year

For many people the money to pay off Christmas bills comes from tax refunds. And lots of us would like to lose some weight, get into a good relationship, and have working computers to stay in touch. For all of these desires there are crooks that want to rip you off. So here are four tips that are timely for everyone.

1. Avoid Tax ID Theft. File your federal taxes early. This may help prevent someone using ID theft to file a bogus tax return in your name. The IRS starts accepting federal returns on January 23. From 2011-2014 the IRS paid out $23 Billion in bogus tax refunds. In 2015 this happened to 250,000 people. Last year St. Louis had more cases of ID Theft per capita than any other metro area in the country – almost all of it bogus returns. The National Consumer’s League recently issued a warning on this, and the Federal Trade Commission has announced that it, and other agencies, will be doing more to educate the public on this issue for Tax ID Theft Awareness Week from January 30-February 3. And if you do owe taxes be aware that the IRS itself never calls people to threaten lawsuits or arrests – but crooks do.

2. Avoid bogus diet pills, especially with free trial offers at on line sites. An FTC study found that in 2011, 5.1 million adults had been ripped off by bogus diet pills – more victims than any other fraud topic they surveyed. (The Fraud Report will be providing a more detailed look at this problem soon). Many of these operations claim there are free trial offers, that they are endorsed by celebrities, and that they have a money back guarantee. Even people who are skeptical about the products may be enticed to give it a try if they think they only have to pay a dollar or two for shipping and that there is a money back guarantee. But in many cases victims find that their credit cards are charged right away for a hundred dollars or more, and that it is very difficult to cancel or return the products.
The FTC has done many cases against such companies and found that the pills are totally worthless. And the BBB in St. Louis recently warned about another company claiming a free trial offer for a skin care products. Unfortunately, for those of us who want to lose weight, the only solution is to eat less and exercise more.

3. Don’t be ripped off at dating sites. Millions of people use online dating sites to find a partner. But be careful. Many sites let you sign up for free, but then send fake emails and texts from people that supposedly want to meet you. But you can’t read these unless you enter your credit card and become a paid member. Because the messages are computer generated and not from real people these messages disappear when you enter your credit card for a paid membership. People also need to be careful to be sure they know how long they are signing up for, so that their credit card is not charged again for an unwanted renewal. And sometimes the profiles on the web sites are for people that don’t actually exist. Finally, if you do meet someone on line make sure they are not frauds that romance you and then want your money. Find out more about romance scams here.

4. Don’t let crooks take remote control of your computer. If you get a call or a popup claiming that there is a problem with your computer it is probably a tech support scam. Don’t let them into your computer. If you have a problem with your computer take it to a store with real live people to help you out. Learn more here.

FTC announces top consumer protection accomplishments last year

Bogus Debt Collection
The FTC has been seeing a wave of fraudulent debt collection companies calling and demanding payment of debts that the consumer doesn’t owe and that these companies have no legal right to collect. Many of these are supposedly from online payday loans. FTC has just sued an operation that sold lists of people of potential victims to these debt collection companies that often included victim’s addresses, social security numbers, and bank account information. Armed with this information, they are often able to convince victims that they really are liable for the debt. For more on recent efforts to tackle bogus debt collectors see this article.

There is a growing worldwide problem run by organized fraud gangs that entice young males into performing sex acts over Skype with someone they have met on Facebook – and then being blackmailed. One group in the UK says it has helped over 15,000 victims. The UK police and the U.S. military have recently been warning of this fraud. A new post by the Baker Fraud Report on this topic can be found here.

FTC sues memory pill Prevagen pitched to older people.

Ever walked into a room and forgot what you were looking for? The FTC and New York Attorney General have just sued the company that makes Prevagen, a memory improvement pill, alleging that the company made deceptive claims and asking for refunds for customers. The company has sold over $165 million worth of their products. Here is the FTC blog on this case. The company denies the charges.

Mystery Shopping scammer sentenced
On December 2, 2106 the U.S. Attorney’s office in Springfield, Missouri announced that a woman from St. Robert’s Missouri had been sentenced to 12 years in federal prison. She headed up a group of several local people who were working with Nigerians to run a mystery shopper fraud. Unindicted coconspirators in Nigeria were providing her with the fake cashier’s checks and money orders. See the Baker Fraud Report article on mystery shopping here.

Costa Rica Sweepstakes scammers sentenced
Three US citizens were sentenced on December 13 for their work with a sweepstakes fraud operating out of Costa Rica. See the Baker Fraud Report article on this case here.

More on Money Mules
Victims, many of them older, are being used by overseas frauds to assist in the fraud by sending fake checks to victims of other frauds or by receiving money from fraud victims and sending it off to the frauds themselves. Here is a good recent article on money mules and how they work. And here is the Baker Fraud Report article on money mules.

Study on Fraud Affecting Older Victims
A new study by Allianz Life shows that 37% of active caregivers say the elder they care for has experienced financial abuse or exploitation. Not surprisingly, those with some mental decline were more likely to be victims, and in addition to the monetary losses they suffered emotional issues such as depression, anger and guilt. The study also showed that at least a third of victims were unlikely to report their losses because of embarrassment or not knowing where to complain.

Romance Scams

Court in Nigeria sentences man to two years in prison for victimizing a Canadian woman in a romance scam out of more than $32,000.

Court in Nigeria sentences romance scammer to 24 years in prison. He was allegedly a college student in Malaysia.

Nigerian police arrest two romance scammers for ripping off an Italian.

Taiwan police have arrested a Nigerian and two Taiwanese for running an international romance scam from Taiwan. Allege there are dozens of victims from at least 12 countries.

Police in Northern Ireland warn of romance scams.

Police in India arrest two Nigerians and accomplice for romance scam. This case also seems to have employed a slightly different tactic used by romance scammers. The fraudster/love interest sends a package with a gift to the victim. Then a supposed third party such as a Customs office contacts the victims claiming money must be paid to release the package.

Jamaica Sweepstakes scams

Jamaican police issue video urging Jamaicans to help stop lottery fraud
Video by Jamaican Lottery Task Force urging Jamaicans to help stop lottery scams. It focuses on an event in which a family member opened the door and ten people were shot, of who six died. This massacre apparently resulted from lottery fraud. Four people involved in shooting.

Baker Fraud Report article on Jamaican fraud picked up by Forbes.

Money Mule Indicted in Ohio
Federal indictment of woman in Canton, OH who received over $100,000 through Western Union and MoneyGram from a TN man who had been told he had won a sweepstakes and had to pay fees. The news release states that she was working with “others” but does not specify if it was with Jamaicans.

Victim of Fraud Letter Supposedly from Publisher’s Clearinghouse
An 84 year old woman in Dallas woman received a letter supposedly from Publisher’s Clearing House telling her she had won money. The mailing included a counterfeit check for $600,000. She lost $6000. This article has a good graphic of the letter she received.

Jamaican living in Iowa pleads guilty to taking part in lottery fraud.

Add to the News! Have you seen a recent prosecution or other fraud information that others should know about? Send it into the Baker Fraud Report at