Baker Fraud Report

US forms scams task force to tackle organized crime and fraud from Southeast Asia

China says the $13 billion in Bitcoin that the US seized from indicted scam compound leader Chen Zhi was money stolen from Chinese investors in a bitcoin mining operation

Fraud-related industries:  The Southeast Asia scam compounds apparently began as online casinos.  What do we know about organized crime involvement.  Would there be many consumer complaints?  And what of the pornography industry?  We did a case while I was at the FTC against a porn company that asked for credit cards for a free trial, promising that credit cards would not be charged. We initially had only 16 complaints, but this grew into a huge multi-million dollar fraud, run by an organized crime family.  People just rarely complained.  I fear that these are areas of massive consumer fraud that we simply don’t hear about from victims.   One thing they seem to have in common is that they have found a way to get access to the credit card system.  Let me know if you can if my suspicions are correct – or not.

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Meta made $16 billion from scam ads in 2024; 10% of its income; internally estimates that its platform is involved in one third of scams in the US

Myanmar military demolishes 150 building in scam compound on the Thailand border

Password for the security camera system at the Louvre was “louvre”

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Google says its new AI powered defenses block 10 billion scam calls and texts on Android each month

China sentences five to death for operating scam compounds

Europol takes down three large credit card fraud operations; 18 arrested; used stolen card numbers to launder fraud money; over €300 million in losses

Digital Arrest Scams.  There is much angst in India about this type of fraud. But from reading articles about this, I’m not sure there is agreement about just what this consists of. It does seem to begin with a call from a law enforcement impersonator, claiming that the victim has been involved and threatening arrest. Beyond that I’m not sure if this is actually a different pitch than the scams we see that tell victims that they need to move their money to the caller to keep it “safe.”  So it may be just a new term for a fraud that we already see. But I’m be interested in hearing from anyone that knows more than I.

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Meta takes down 8 million scam accounts on Facebook and Instagram

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Myanmar military arrests 2000 at scam compound call center

Canada set to set new national fraud strategy and to launch new financial crime agency

SpaceX says it has cut off 2500 Starlink devices at scam compounds in Myanmar

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India busts call center, arrest 16 who were calling victims in the US and Canada claiming they were to be arrested and needed to pay money

US attempts to seize $14 billion in bitcoin tied to Chinese-run crypto romance fraud ran from Cambodia

Brooklyn: US indicts head of same Cambodian crypto romance call center

WSJ: Scam texts for unpaid road tolls and phishing come from Chinese gangs; more than $1 billion worth; used for ghost tapping frauds used to buy physical goods by mules

Excellent webinar on the work and role of Nigerian Black Axe Gang (60 minutes)

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Interpol operation in Africa leads to arrests of 260 for romance fraud and sextortion

FTC settles case against Amazon over Prime subscriptions and making it hard to cancel; to pay $1 billion penalty and another $1.5 billion in refunds to victims

FTC explains who is eligible for refunds from Amazon Prime

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Brooklyn: DOJ indicts two members of the Jalisco drug cartel for operating call centers in Mexico reaching out to US owners of Mexican timeshares claiming they had a buyer; operated ten years; the  two are not yet in custody

Interpol operation involving 40 countries seizes $440 million from romance, BEC and other frauds

Nevada: Woman pleads guilty to scheme that mass mailed notices to victims telling them they had won and needed to send a small sum to claim prize; took in $15 million

Scams or Fraud – Is there a difference?  I’ve heard some people believe that  these terms have legal significance.  To prove fraud, of course, requires that the perpetrator did it intentionally, that it was not a mistake for example.  Normally that isn’t too hard to prove.  I suspect that the term “scams” developed as a shorthand and suggests that they have a lesser significance.  But for my purposes they are the same, and the term scams is not meant to downplay the seriousness of the activity.

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Tech support frauds in India partner with Chinese groups to pick up and launder victim money.  How does this system work?  Interesting insights into those networks

Does prosecuting scammers work?  From time to time I hear people say that you can’t arrest yourself out of scams.  To the extent that such voices are saying that there are other things that can be done (education disruption, dealing with the avenues where scam money travels, etc.) that is doubles true. But I fear that at times this is just as excuse by law enforcement which does not have the resources, training, or internal support to take action.  In my experience, though, the frauds do keep a close eye on what enforcers are doing, and since they really don’t want to go to jail they avoid engaging in scams where there has been effective enforcement.  For example, after the Southern District of Illinois successfully extradited some scammers who ran call centers in Canada and convicted them in the US the number of fraud call centers in Canada plummeted.  And there are other types of frauds and scams that we have eliminated.   If burglaries were never prosecuted is there any doubt that they would skyrocket?  I doubt they would ever be eliminated, but they might be kept to manageable levels.  The crooked and greedy will ever be with us.  But we should all honor and encourage the law enforcement agencies that take the time and work to successfully send the crooks to the clink.  They are watching what we do.

Full report here

Scammers are NOT Robin Hood.  Fraudsters bring in a lot of money, and of course spend it in the area where they are located. Some may even contribute to local charities. But the data shows that the areas where scammers tend to locate also suffer more scams and fraud than other places.  For example, Florida has often topped the list of scam complaints per capita. Where crooks locate, spread, and teach others their methods local people suffer.

Full report here