Friday, March 2, 2012
Stop Fraud and Financial Scams
Stop Fraud and Financial Scams
Great link. Have noticed across all media that RSA and the SAPS have also taken up a marked sea change in attitudes towards fraud and scams of any financial nature.
Of interest to me was this paragraph
The operators of these schemes often promise high returns to investors, but engage in little to no legitimate investment activity. Such schemes include Ponzi schemes, affinity fraud, prime bank/high-yield investment scams, foreign exchange (FOREX) frauds, business opportunity fraud and other similar schemes. In some instances, operators of these schemes filed for bankruptcy in an attempt to avoid claims by victim-investors.
which it seems is exactly what Grieve and his wife tried to do with their lawyer.
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Monday, December 6, 2010
Financial Fraud Enforcement Task Force Announces Results of Largest-Ever Nationwide Operation Targeting Investment Fraud
WASHINGTON – Attorney General Eric Holder announced today the results of Operation Broken Trust, a nationwide operation organized by the Financial Fraud Enforcement Task Force to target investment fraud. To date, the operation has involved enforcement actions against 310 criminal defendants and 189 civil defendants for fraud schemes that harmed more than 120,000 victims throughout the country. The operation’s criminal cases involved approximately $8.3 billion in estimated losses and the civil cases involved estimated losses of more than $2.1 billion. Operation Broken Trust is the first national operation of its kind to target a broad array of investment fraud schemes that directly prey upon the investing public.*
In announcing the results of Operation Broken Trust, Attorney General Holder was joined by FBI Executive Assistant Director Shawn Henry, U.S. Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami, U.S. Postal Inspection Service (USPIS) Chief Postal Inspector Guy Cottrell, Deputy Chief Rick Raven of the Internal Revenue Service Criminal Investigation (IRS-CI), Acting Director of Enforcement Vince McGonagle of the U.S. Commodity Futures Trading Commission (CFTC), and other members of the Financial Fraud Enforcement Task Force.
The interagency Financial Fraud Enforcement Task Force was established by President Obama to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on Aug. 16, 2010, within a three-and-a-half month period, Operation Broken Trust involved 211 criminal cases and 60 civil enforcement actions. Ninety-one defendants have been sentenced, including several sentences of more than 20 years in prison.
“With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” said Attorney General Holder. “To the public: be alert for these frauds, take appropriate measures to protect yourself, and report such schemes to proper authorities when they occur. And to anyone operating or attempting to operate an investment scam: cheating investors out of their earnings and savings is no longer a safe business plan - we will use every tool at our disposal to find you, to stop you, and to bring you to justice.”
“This operation highlights the scope of this problem, and its impact on individuals from all walks of life,” said FBI Executive Assistant Director Henry. “This one sweep alone involves fraud schemes that harmed more than 120,000 victims. The schemes may change, but the underlying greed does not. Working with our partners, we in the FBI will use all the investigative techniques in our arsenal, including undercover operations, to bring those responsible to justice.”
“Fraud by well-known companies or high-profile executives gets the biggest headlines, but other scams are equally devastating to hard working families and retirees,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Victims want justice and don’t much care who the fraudster is or how unique the fraud. Today’s actions underscore that law enforcement agrees and will pursue fraud in whatever form.”
Enforcement actions taken as a result of Operation Broken Trust involve a range of different investment fraud schemes, all of which prey directly on the investing public. The operators of these schemes often promise high returns to investors, but engage in little to no legitimate investment activity. Such schemes include Ponzi schemes, affinity fraud, prime bank/high-yield investment scams, foreign exchange (FOREX) frauds, business opportunity fraud and other similar schemes. In some instances, operators of these schemes filed for bankruptcy in an attempt to avoid claims by victim-investors.
“The U.S. Postal Inspection Service has a long tradition of protecting postal customers from these types of investment and Ponzi scams and bringing those responsible to justice,” said USPIS Chief Postal Inspector Cottrell. “The Postal Inspection Service constantly strives to protect our customers and the general public from falling victim to these scams that claim millions of dollars every year.”
“The results announced today demonstrate the effectiveness of federal civil and criminal law enforcement in bringing to justice those who have engaged in financial fraud schemes,” said Acting Director McGonagle of the Division of Enforcement for CFTC. “The CFTC continues to devote substantial enforcement resources to combat financial fraud. We appreciate the partnership with the other members of the President’s Financial Fraud Enforcement Task Force to protect the public from financial fraudsters.”
“Securities and investment frauds are serious offenses which have brought financial ruin to many citizens. Promoters of Ponzi schemes prey upon trusting investors and then steal their hard earned money,” said Rick Raven, Deputy Chief, IRS Criminal Investigation. “IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture with our law enforcement partners to put a stop to this and other types of white collar fraud.”
Operation Broken Trust was conducted in conjunction with various Department of Justice components – including the U.S. Attorney Offices, the FBI, the Criminal and Civil Divisions and the U.S. Trustee Program – as well as the SEC, USPIS, the CFTC, IRS-CI, the Federal Trade Commission, the U.S. Secret Service and the National Association of Attorneys General.
As a part of Operation Broken Trust, the task force is making the public aware of resources available to protect against these types of fraud and how to report fraud when it occurs. To learn more about investment scams, how to take steps to protect yourself from scams, or how to report investment fraud if you believe you have been victimized, go to StopFraud.gov. The website includes links to a wide array of task force member resources.
The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
*Numbers updated as of Dec. 14, 2010.
Auction Fraud/Auction Fraud – Romania
Auction fraud involves fraud attributable to the misrepresentation of a product advertised for sale through an Internet auction site or the non-delivery of products purchased through an Internet auction site
Counterfeit Cashier's Check
The counterfeit cashier's check scheme targets individuals that use Internet classified advertisements to sell merchandise. Typically, an interested party located outside the United States contacts a seller, and the seller is told that the buyer has an associate in the United States that owes him money. As such, the buyer will have the associate send the seller a cashier's check for the amount owed to the buyer, but the check is actually counterfeit.
Credit Card Fraud
Credit card fraud is the unauthorized use of a credit/debit card, or card number, to fraudulently obtain money or property.
Debt elimination schemes generally involve websites advertising a legal way to dispose of mortgage loans and credit card debts. After obtaining information from the participant, the fraudster will issues bonds and promissory notes to the lenders that purport to legally satisfy the debts of the participant. In exchange, the participant is then required to pay a certain percentage of the value of the satisfied debts to the subject.
Parcel Courier Email Scheme
The Parcel Courier Email Scheme involves the supposed use of various National and International level parcel providers such as DHL, UPS, FedEx and the USPS.
Employment/business opportunity schemes involve bogus foreign-based companies that recruit citizens in the United States on several employment-search websites for work-at-home employment opportunities. These positions often involve reselling or reshipping merchandise to destinations outside the United States.
Escrow Services Fraud
In an effort to persuade a wary Internet auction participant, the perpetrator will propose the use of a third-party escrow service to facilitate the exchange of money and merchandise. The victim is unaware the perpetrator has compromised a true escrow site and, in actuality, created one that closely resembles a legitimate escrow service. The victim sends payment to the phony escrow and receives nothing in return. Or, the victim sends merchandise to the subject and waits for his/her payment through the escrow site which is never received because it is not a legitimate service.
Identity theft occurs when someone appropriates another's personal information in order to commit theft or fraud.
Internet extortion involves hacking into and controlling various industry databases, promising to release control back to the company if funds are received, or the subjects are given web administrator jobs. Similarly, the subject will threaten to compromise information about consumers in the industry database unless funds are received.
Investment fraud is an offer using false or fraudulent claims to solicit investments or loans, or providing for the purchase, use, or trade of forged or counterfeit securities.
The lottery scheme deals with persons randomly contacting email addresses advising them they have been selected as the winner of an International lottery.
Nigerian Letter or "419"
Named for the violation of Section 419 of the Nigerian Criminal Code, the 419 scam involves communication from individuals representing themselves as Nigerian or foreign government officials, offering the recipient the "opportunity" to share in a percentage of millions of dollars, and soliciting for help in placing large sums of money in overseas bank accounts. Payment of taxes, bribes to government officials, and legal fees are often described in great detail with the promise that all expenses will be reimbursed as soon as the funds are out of the country. The recipient is encouraged to send information to the author, such as blank letterhead stationery, bank name and account numbers, and other identifying information using a facsimile number provided in the letter. The scheme relies on convincing a willing victim to send money to the author of the letter in several installments of increasing amounts for a variety of reasons.
Phishing and spoofing refer to forged or faked electronic documents. Spoofing generally refers to the dissemination of email which is forged to appear as though it was sent by someone other than the actual source. Phishing, often utilized in conjunction with a spoofed email, is the act of sending an email falsely claiming to be an established legitimate business in an attempt to dupe the unsuspecting recipient into divulging personal, sensitive information such as passwords, credit card numbers, and bank account information after directing the user to visit a specified website. The website, however, is not genuine and was set up only as an attempt to steal the user's information.
Ponzi or pyramid schemes are investment scams in which investors are promised abnormally high profits on their investments. No investment is actually made. Early investors are paid returns with the investment money received from the later investors. The system usually collapses. The later investors do not receive dividends and lose their initial investment.
The "reshipping" scheme requires individuals in the United States to receive packages at their residence and subsequently repackage the merchandise for shipment, usually abroad. The reshipping scheme helps facilitate the transfer of goods purchased online by fraudulent means.
With improved technology and world-wide Internet access, spam, or unsolicited bulk email, is now a widely used medium for committing traditional white collar crimes including financial institution fraud, credit card fraud, and identity theft, among others.
Third Party Receiver of Funds
The subjects, usually foreign, post work-at-home job offers on popular Internet employment sites, soliciting assistance from United States citizens. The subjects allegedly are posting Internet auctions, but cannot receive the proceeds from these auctions directly because their locations outside the United States makes receiving these funds difficult. The seller asks the United States citizen to act as a third party receiver of funds from victims who have purchased products from the subject via the Internet. The United States citizen, receiving the funds from the victims, then wires the money to the subject.
What is the Financial Fraud Enforcement Task Force?
President Obama established the Financial Fraud Enforcement Task Force in November 2009 to hold accountable those who helped bring about the last financial crisis as well as those who would attempt to take advantage of the efforts at economic recovery.
The task force is improving efforts across the government and with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, recover proceeds for victims and address financial discrimination in the lending and financial markets.
With more than 20 federal agencies, 94 US Attorneys Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. The Task Force has established Financial Fraud Coordinators in every US Attorney’s Office around the country to help make these broad mandates a reality on the ground.
What is Financial Fraud?
Financial fraud takes many different shapes, and fraudsters wear many different masks. From mortgage scams that target the elderly, Ponzi schemes that shock the world, procurement fraud that steals money from our nation’s coffers, predatory lending that discriminates against vulnerable communities, securities fraud that undermines the trust and transparency of our markets, and the list goes on.
But the American people have something on their side the fraudsters don’t: the force of the largest coalition of federal, state and local partners ever assembled to combat fraud.
The Financial Fraud Enforcement Task Force’s mission is broad, because the problem is broad, and the task force is working tirelessly to combat these and future scams to protect the American people.