Fraud Report February 20, 2025

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It looks like people are finally getting serious about Scam Compounds in Southeast Asia. Premier Xi recently announced a crack down on these operations, and Thailand recently cut power and cell phones into Myanmar.  And most recently this piece of good news:

Militias in Myanmar to deport 10,000 people from scam compounds to Thailand, 500 at a time

Want to know why fraud victims get the blame? (By Anthony Pratkanis)  The media exalt and excuse con criminals with little questioning of their claims.  Case in point: Elizabeth Holmes Breaks Her Silence in First Interview from Prison: ‘It’s Been Hell and Torture’ (Exclusive)

Her troubles — brought on by her choices — are detailed with sympathy.  The impact on victims:  briefly touched on in an easily missed middle paragraph with little detail on the financial, emotional, and trust toll on victims (and on whistleblowers).  Her claim that failure is not fraud is not challenged with the details of her scheme to defraud investors for which a jury found Holmes guilty on multiple counts of fraud. 

Her claim that she is working while in prison on new health care advances is taken at face value.  How?  She has no lab, and the knowledge of biochem, medical devices, medical sensors, or anything else that might lead to a breakthrough never manifested itself at Theranos.  The media often portray fraudulent organizations, con criminals, and those accused of fraud as heroes:  Enron, Theranos, FTX, Wirecard, uBiome, Barry Minkow, Sam Bankman-Fried, Caroline Ellison, Martin Shkreli, Charlie Javice, Joanna Smith-Griffin, Jessica Richman (among others) were all featured for their “business” acumen in Forbes, Fortune, Fast Company, Business Insider, and similar media.  Even AARP has featured in their magazine the good Michael Milken is doing.  No wonder we are awash in fraud. It is a virtue not a crime — at least for some in the media.

Full report here

Fraud Report February 13, 2025

Online sellers in China use counterfeit postage to ship goods into the US for free; sell fake postage on social media

FBI and Secret Service have an operation “Level Up” that identifies crypto romance fraud victims and notifies them that they are involved; notified 4300 victims76% were not aware they were being scammed; 42 people put in touch with suicide prevention specialists

Text messages offering jobs. I’ve been getting quite a few of these. Who sends them?  They are frauds, and seem to be on the increase. Watch out, and warn your friends.

The great Google Ads heist: criminals ransack advertiser accounts

via fake Google ads.  “Online criminals are targeting individuals and businesses that advertise via Google Ads by phishing them for their credentials —ironically — https://www.justice.gov/usao-dc/pr/arizona-woman-pleads-guilty-fraud-scheme-illegally-generated-17-million-revenue-northvia fraudulent Google ads.

• The scheme consists of stealing as many advertiser accounts as possible by impersonating Google Ads and redirecting victims to fake login pages.”

• Advertisers are constantly trying to outbid each other to reach potential customers by buying ad space on the world’s number one search engine.

• We first started noticing suspicious activity related to Google accounts somewhat accidentally, and after a deeper look we were able to trace it back to malicious ads for… Google Ads itself! Very quickly we were overwhelmed by the onslaught of fraudulent “Sponsored” results, specifically designed to impersonate Google Ads, . . . • While it is hard to believe such a thing could actually happen, the proof is there when you click on the 3-dot menu that shows more information about the advertiser.”  (thanks to Judy Yates)

Full report here

Fraud Report January 30, 2025

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Europol effort, led by Germany, takes down two of the world’s largest online cybercrime marketplaces; 2 arrested

WSJ: China works with SE Asia companies to take out scam compounds

AARP:  Bob Sullivan podcast about a 74 year old US widower who got involved in an inheritance scam, and was asked carry candy to Mozambique.  But it really had nine kilos of heroin in it, and was sentenced to 18 years in prison in Africa.  He was turned into an unsuspecting drug mule

Los Angeles: Eight arrested using Port of LA to smuggle in counterfeit goods from China; $13 million of goods seized; total involved much higher 

Full report here

Fraud Report January 23, 2025

We’re falling behind in the fight against fraud.   Though there are far more prosecutions now,  fraud continues to be a growing problem.  Over the last ten years fraud has really taken off.

FTC numbers of complaints and losses

2013:   over 1 million; $1.6 billion

2023:   2.6 million;      $10 billion

IC3 numbers of complaints and reported losses

2013:  262,813; $781,800,000

2023:  880,418; $12.5 billion

Three things I’ve learned as a lawyer.  Not all, always, but surely mainly true. 

  1. Facts are stubborn things
  2. The lawyer on the other side isn’t evil (even if their client is)
  3. Juries make good decisions

Full report here

Fraud Report January 16, 2025

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Seven years of the Fraud Report. It’s hard to believe that we are beginning our eight year.

Warning!!  Obviously many in Southern California are now homeless. So rental scams are likely to be rampant there.  Here is my BBB study on this topic.

EFCC arrests 105, including four from China, operated scam hiring people to do fake hotel reviews, pay was to be made by crypto, but victims hired and who did the work could not withdraw their “pay”

UK looking at experiences of fraud victims government releases study

Miami: Nigerian man pleads guilty to inheritance fraud; sent letters to older people; got $6 million from 400 victims

Full Report here

Fraud Report January 2, 2025

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Nigeria arrests nearly 800 people from crypto romance fraud ring operating from office tower

  • 148 Chinese, 40 Filipinos, 1 Pakistani, 1 Indonesian, rest Nigerian
  • Used WhatsApp accounts tied to German and Italian phone numbers

New Jersey: Dual Russian/Israeli citizen arrested in India; charged that he is developer of Lockbit ransomware; to be extradited to the US

CPFB sues owner of payment app Zelle, Well Fargo, Chase, JP Morgan, and Bank of America for not doing more to stop fraud on the app; alleges victims have lost $870 million over the last seven years

Major hack by China gets access to computer systems at the US Treasury Department

Full report here

Fraud Report December 19, 2024

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A  scam by any other name: Scammers building relationships onlie and then encouraging victims to put money into a crypto account, where it supposedly appreciates but can never be withdrawn, may be the most common fraud in the world right now.  Scammers call it pig butchering, and some enforcement agencies have followed suit. But now Interpol urges use of “romance baiting” instead.  The Fraud Report will continue to use the term crypto romance fraud.  What do you think?

Nigeria arrests 792 for crypto romance fraud; man were from China

Consumer Reports: Scams impersonating banks are becoming increasingly common, and how they work

FTC adopts final Junk Fee Rule, requiring hotels and live event tickets to disclose actual final price before getting consent to purchase; should end resort fees and all mandatory charges up-front; must include price of taxes or shipping and handling

Full report here

Fraud Report December 12, 2024

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New FTC data spotlight report shows job scams up very sharply

  • Complaints tripled from 2020 to 2023
  • First half of 2024 up sharply; losses of $220 million
  • These “jobs” often involve tasks like clicking on websites
  • Initial contacts usually by text
  • Have victims send crypto

Russia raids network of call centers with 100,000 victims in 50 countries; arrest 11; make $1 million per day

WSJ: Brian Kregs and his fight against hackers

Indiana: Man in China indicted for malware that hacked tens of thousands of firewalls

Should we deport scammers and those who knowingly help them?  There are many people present in the US who are integrally involved in scam operations.   If they have overstayed a student visa or are convicted of fraud should they be deported after serving their sentences?  Homeland Security tells me that policies charge ten years or more ago, and that these people are now allowed to stay in the US.

Full report here