Baker Fraud Report

Texas: Chinese man arrested for ID theft; got information from driver’s licenses on the dark web and used them to get new licenses and then used them to get credit cards; got 1273 licenses; part of organized crime group

McAfee survey in India finds that 47% have experience scams that use AI voices or know someone who has

Europol takes down international dark web marketplace selling drugs; arrest 288; nine countries involved

UK approves major anti-fraud push; allocates £400 million; 400 new investigators; new fraud center

Los Angeles: 14 indicted for international scam that debited bank accounts for millions; claimed charges were for things like cloud-computing

Full Report here

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DOJ announces US coordinated effort against vaccine fraud; 18 arrested; includes fake billings for vaccine; counterfeit vaccination cards; billing the government for test kits that were not needed

Nevada: Man pleads guilty to check fraud; got bank account information from foreign telemarketers and then used that to create checks and debit accounts; took in millions
 
Spain dismantles crypto investment operation; arrest 1; took in $110 million; marketed on internet, phone calls; gave investors web page with fake account information, graphics

Myth Two: For most of us, fraud schemes are easy to spot. By Anthony Pratkanis.  The general public believes that scammers usually employ giveaway clues such as typos, poor grammar or a shifty demeanor on the phone.

In explaining why Australians lost a record amount to scams last year, Catriona Lowe, Deputy Chair of the Australian Competition & Consumer Commission, points to a factor identified by others:  “We have seen alarming new tactics emerge which make scams incredibly difficult to detect.  This includes everything from impersonating official phone numbers, email addresses, and websites of legitimate organizations to scam texts that appear in the same conversation thread as genuine messages.”

Over 50 years of research on detecting lies finds that the same results apply to detecting fraud.  People generally think that they can spot liars based on their insincere demeanor.  This may work for the people we encounter on an everyday basis, but these types of cues are a poor means of detecting lies (slightly above chance in laboratory tests).  This is especially the case for con grifters who ooze fake sincerity with a “naturalness and uniformity of action.”  Unfortunately, con criminals’ ability to do this will only improve as they adopt new artificial intelligence tools.

The implications for fraud prevention:  (a)  when training or educating people do not assume that a fraud can be easily spotted and, (b) based on research in lie detection and my own research on fraud (with Doug Shadel and published by AARP in Off the Hook), all of us need to be very skeptical and question critically the information we receive.

Full Report here

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FBI warns of scammers calling Chinese speakers and claiming to be with the Chinese government, accusing the victim of fraud, and threatening to arrest or repatriate them; often use spoofed numbers of Chinese consulate

FTC announces increased efforts to stop robocalls coming from outside the US

• Identifies US gateway carriers that transmit calls into the US phone system
• Issues warnings
• Sues those who don’t stop
• 22 of 24 companies contacted have stopped these calls
• FTC calls this effort “Point of no entry”

Full Report Here

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DOJ seizes $112 million in crypto from crypto investment scams

UK announces arrest of 299 for romance and other frauds

FBI, Europol, take down dark web market for stolen credentials such as passwords and bank accounts, identities stolen with bots; 119 arrested; Dutch police have site to see if your ID was stolen

Full Report here

Arizona: Nigerian man gets more than four years prison for BEC, Romance, fake check, and romance scams; hired people with online jobs and used them to assist the frauds; worked with others in Malaysia;  which extradited him to the US

Florida: One man extradited from Spain (Nigerian?) pleads guilty to inheritance scam; send mail to older victims and told them  to pay money for various fees to get their money; six others charged; got $6 million; used former victims as money mules

DOJ arrests founder of BreachForum, worlds largest hacking forum; takes down marketplace

Australia warns of sharp jump in bank impersonation scams; victims get text from the bank phone number, claiming to be security; ask victims to transfer their money to “keep it safe”

Full Report here

San Diego: Six members of Romanian organized crime gang arrested; laundered jewelry stolen from elderly people in the area, also for theft of unemployment benefits; much money went back to Romania; losses at least $1.4 million

UK’s Which? reports survey on mass marketing fraud there

• Nearly nine in 10 adult internet users have encountered content online which they believed to be a scam or fraud.
• Nearly half of adult internet users have personally been drawn into engaging in an online scam or fraud, while four in 10 knew someone who had fallen victim.
• A quarter of those who said they’d encountered online scams lost money as a result, with a fifth being scammed out of £1,000 or more.
• Three in 10 experienced a potential scam or fraud via email, just under a quarter via social media and just under a fifth through websites and apps.

Brooklyn: New Jersey man pleads guilty to mass mail campaign claiming victims had won a prize or part of a legal settlement (they had not), took in $1.6 million; he did that while awaiting sentencing for another mass mail campaign claiming people had won and needed to pay $20 to claim winnings (no one won) that took in $50 million

Issue of the week, Recidivism by Fraudsters:  A fraud expert and regular reader noted the story above, and suggested that convicted confidence crime criminals (for example, people who do mass marketing fraud and who work in boiler rooms, commit mail fraud, or engage in on-line frauds such as romance scams) have a high rate of re-arrest and continue to be involved in fraud crimes.  

One study (by Weisburd & Waring, 2001) found that many criminals in street gangs tend to “age out” of criminal life, but that  “white collar” criminals have long careers and possibly learn more tricks and stay in the scam game. This study also found that 62% of those who commit the crimes of mail, credit, or false claims are re-arrested for another crime — a high rate of recidivism. 

I’ve surely seen convicted scammers return to their ways after being convicted, and romance scammers often point to the absence of prior arrests in seeking lighter sentences. So:

• Are scammers less likely to be caught and prosecuted?
• Do they tend to get shorter sentences because they don’t have prior arrests? 
• And are they more likely to continue to engage in fraud after their jail time?
• What other data bears on the recidivism rates for con criminals?

Let’s open this discussion up, and let me know what your experience is.

Full report here

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Watch out! Scammers are already taking advantage of the collapse of Silicon Valley Bank to register deceptive domain names and to send phishing emails

FBI’s Internet Crime Complaint Center 2022 fraud report

• Losses reported more than doubled since 2020; $4.2 billion in 2020, $10.3 billion in 2022
• BEC scams increasingly asking for crypto as payment
• Investment frauds were top source of complaints; losses to that more than doubled from $1.4 billion in 2021 to $3.31 billion
• Tech support and government impersonation both up sharply
• Largest number of complaints from victims 30-39, though 60+ lost more money
• ID theft, lottery fraud, counterfeit goods down somewhat
• Phishing complaints were number 1 complaint topic
• State by state breakdowns here

US and German authorities take down infrastructure of darkweb crypto money laundering mixer ChipMixer; had laundered €2.73 billion

France 24 TV:  Mafia Africa:  A dive into organized crime in France

Full report here

BBB releases annual scam tracker risk report

• Total complaints and losses down slightly in 2022
• Online purchases still tops the list for most complaints
• Employment scams increases to number two, passing crypto
• Often these are work at home, where the “employer” sends you a check for needed items such as a laptop, and you are told to deposit that and send money to a supposed third party. But the check is fake

Canadian grandmother flew to visit romance scammer and was given clothes to deliver to him in Hong Kong. But buttons were filled with cocaine, and she is in jail there; scammer also arrested in Hong Kong

Full report here

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FTC releases 2022 data on fraud and ID theft

• Total losses reported of $8.8 billion; up 40% from 2021
• Total complaints were down somewhat
• Investment fraud was largest, and more than double 2021
• Those aged 20-29 reported more losses than those 70+
• Top payment method was bank transfers; crypto second
• Losses to business imposters tripled
• 22% of the time first contact was by text
• Breaks both ID theft and fraud state by state
• Down: grants, ID theft, internet service, online shopping, travel
• Up: Sweepstakes/lotteries; advance fees for credit/loans; payday loans; student loans; job scams; pyramids; romance scams

Interpol joins forces with law enforcement in Africa in four month operation; 11 arrested; action taken against romance and other scams

Full report here

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Six Nigerians indicted for inheritance fraud

Three lived in Spain; three in the UK

One has been extradited from the UK

Contacted victims telling them of big inheritance

But needed to pay “taxes” and other fees

Used other victims as mules

Chainalysis releases 2022 Crypto Fraud Report

• Losses hit an all time high of $20.6 billion (excluding FTX etc)
• Majority of that was ransomware
• Stolen funds up 7%
• Pump and dump fake tokens investments a major problem

Ponzi schemes up sharply in 2022; one quarter of them involve crypto; losses of $5.3 billion

PayPal has suffered a “credential stuffing” attack; 35,000 affected; thus crooks are hacking into accounts; if contacted by PayPal make sure it is really them

Full report here