History of scams - part 2

The other day I posted information about how far back there are documented cases of scams.  Scams are a part of our history, so why have we not learned from them to make a things better in our current times and for our future?  I see several reasons for this.

1) The punishment vs the crime - For many scams, the people running them do very little if any jail time.  If there is not a stiff punishment for these crimes, then the money that they gain from the crimes outweighs the punishment for getting caught, if they get caught, so the criminal choose to take that chance.

2) Education - Information about scams and fraud NEEDS to be taught in our school systems . . . it is a part of our history, and I have always been taught that if we do not learn from our history we will be doomed to repeat it.  The fact that scams have been around for as long as they have is evidence enough that we have not learned from our past.

3) Not me thinking - Many people hear the word "scam" or "fraud" and think "I am too smart to fall for something like that." so they just tune out and ignore the information.  Identity Theft is a type of fraud, and I think that everyone would agree that we know that ANYONE can become a victim of Identity Theft . . . it does not matter  where you come from, your income, or your level of education.

4) Assumptions about the victims - It is very hard for victims of these crimes to come forward because so often they are blamed for what happened.  This relates to the above "Not Me" thinking.  Many people assume that because you have become a victim of a scam you are greedy or stupid, or both.  To me this is the same as the thinking that a rape victim "got what she deserved" because she was wearing a short skirt and sexy clothing.  Why is it that we blame the VICTIMS!?!?!?

If we really want things to change in this world we need to take a step back and look at the big picture . . . scams and fraud have been around for for as long as man has been walking on this planet.  The invention of the internet has only made it easier for those criminals to connect with their victims.  If we do not look back to see the patterns and learn from the past, we will only continue to see scams and fraud continue to grow in the future.

The history of scams

Every day there is a new report out about the "new" scam that is out there, but are they really "new"?  Scams are a VERY old business and when you start to look at the history of scams you see that the new ones are just variations of the old ones or the old ones just simply have gone unreported for so long that the scam only appears new.

I found the following information at http://money.cnn.com/magazines/fortune/fortune_archive/2002/03/18/319914/index.htm and it shows a wonderful timeline of scams dating back to the 1920's

1920: The Ponzi scheme Charles Ponzi planned to arbitrage postal coupons--buying them from Spain and selling them to the U.S. Postal Service at a profit. To raise capital, he outlandishly promised investors a 50% return in 90 days. They naturally swarmed in, and he paid the first with cash collected from those coming later. He was imprisoned for defrauding 40,000 people of $15 million.

1929: Albert Wiggin In the summer of 1929, Wiggin, head of Chase National Bank, cashed in by shorting 42,000 shares of his company's stock. His trades, though legal, were counter to the interests of his shareholders and led to passage of a law prohibiting executives from shorting their own stock.

1930: Ivar Krueger, the Match King Heading companies that made two-thirds of the world's matches, Krueger ruled--until the Depression. To keep going, he employed 400 off-the-books vehicles that only he understood, scammed his bankers, and forged signatures. His empire collapsed when he had a stroke.

1938: Richard Whitney Ex-NYSE president Whitney propped up his liquor business by tapping a fund for widows and orphans of which he was trustee and stealing from the New York Yacht Club and a relative's estate. He did three years' time.

1961: The electrical cartel Executives of GE, Westinghouse, and other big-name companies conspired to serially win bids on federal projects. Seven served time--among the first imprisonments in the 70-year history of the Sherman Antitrust Act.

1962: Billie Sol Estes A wheeler-dealer out to corner the West Texas fertilizer market, Estes built up capital by mortgaging nonexistent farm gear. Jailed in 1965 and paroled in 1971, he did the mortgage bit again, this time with nonexistent oil equipment. He was re-jailed in 1979 for tax evasion and did five years.

1970: Cornfeld and Vesco Bernie Cornfeld's Investors Overseas Service, a fund-of-funds outfit, tanked in 1970, and Cornfeld was jailed in Switzerland. Robert Vesco (below) "rescued" IOS with $5 million and then absconded with an estimated $250 million, fleeing the U.S. He's said to be in Cuba serving time for unrelated crimes.

1983: Marc Rich Fraudulent oil trades in 1980-81 netted Rich and his partner, Pincus Green, $105 million, which they moved to offshore subsidiaries. Expecting to be indicted by U.S. Attorney Rudy Giuliani for evading taxes, they fled to Switzerland, where tax evasion is not an extraditable crime. Clinton pardoned Rich in 2001.

1986: Boesky and Milken and Drexel Burnham Lambert The Feds got Wall Streeter Ivan Boesky for insider trading, and then Boesky's testimony helped them convict Drexel's Michael Milken (above) for market manipulation. Milken did two years in prison, Boesky 22 months. Drexel died.

1989: Charles Keating and the collapse of Lincoln S&L Keating was convicted of fraudulently marketing junk bonds and making sham deals to manufacture profits. Sentenced to 12 1/2 years, he served less than five. Cost to taxpayers: $3.4 billion, a sum making this the most expensive S&L failure.

1991: BCCI The Bank of Credit & Commerce International got tagged the "Bank for Crooks & Criminals International" after it came crashing down in a money-laundering scandal that disgraced, among others, Clark Clifford, advisor to four Presidents.

1991: Salomon Brothers Trader Paul Mozer violated rules barring one firm from bidding for more than 35% of the securities offered at a Treasury auction. He did four months' time. Salomon came close to bankruptcy. Chairman John Gutfreund resigned.

1995: Nick Leeson and Barings Bank A 28-year-old derivatives trader based in Singapore, Leeson brought down 233-year-old Barings by betting Japanese stocks would rise. He hid his losses--$1.4 billion--for a while but eventually served more than three years in jail.

1995: Bankers Trust Derivatives traders misled clients Gibson Greetings and Procter & Gamble about the risks of exotic contracts they entered into. P&G sustained about $200 million in losses but got most of it back from BT. The Federal Reserve sanctioned the bank.

1997: Walter Forbes Only months after Cendant was formed by the merger of CUC and HFS, cooked books that created more than $500 million in phony profits showed up at CUC. Walter Forbes, head of CUC, has been indicted on fraud charges and faces trial this year.

1997: Columbia/HCA This Nashville company became the target of the largest-ever federal investigation into health-care scams and agreed in 2000 to an $840 million Medicare-fraud settlement. Included was a criminal fine--rare in corporate America--of $95 million.

1998: Waste Management Fighting to keep its reputation as a fast grower, the company engaged in aggressive accounting for years and then tried straight-out books cooking. In 1998 it took a massive charge, restating years of earnings.

1998: Al Dunlap He became famous as "Chainsaw Al" by firing people. But he was then axed at Sunbeam for illicitly manufacturing earnings. He loved overstating revenues--booking sales, for example, on grills neither paid for nor shipped.

1999: Martin Frankel A financier who siphoned off at least $200 million from a series of insurance companies he controlled, Frankel was arrested in Germany four months after going on the lam. Now jailed in Rhode Island--no bail for this guy--he awaits trial on charges of fraud and conspiracy.

2000: Sotheby's and Al Taubman The world's elite were ripped off by years of price-fixing on the part of those supposed bitter competitors, auction houses Sotheby's and Christie's. Sotheby's chairman, Taubman, was found guilty of conspiracy last year. He is yet to be sentenced.

TDoS attacks

I wanted to share the latest press release from the FBI on scams 

06/21/10—The FBI Newark Division released a warning to consumers concerning a new scheme using telecommunications denial-of-service (TDoS) attacks.

The FBI determined fraudsters compromised victim accounts and contacted financial institutions to change the victim profile information (i.e., e-mail addresses, telephone numbers, and bank account numbers).

The TDoS attacks used automated dialing programs and multiple accounts to overwhelm victims’ cell phones and land lines with thousands of calls. When victims answered the calls they heard dead air (nothing on the other end), an innocuous recorded message, advertisement, or a telephone sex menu. Calls were typically short in duration but so numerous that victims changed their phone numbers to terminate the attack.

These TDoS attacks were used as a diversion to prevent financial and brokerage institutions from verifying victim account changes and transactions. Fraudsters were afforded adequate time to transfer funds from victim brokerage and financial online accounts.

Protection from TDoS attacks and other types of fraud requires consumers to be vigilant and proactive. In Newark’s Public Service Announcement (PSA), they recommend the following guidelines for consumers to protect themselves:

• Implement security measures for all financial accounts by placing fraud alerts with the major credit bureaus if you believe they were targeted by a TDoS attack or other forms of fraud.
• Use strong passwords for all financial accounts and change them regularly.
• Obtain and review your annual credit report for fraudulent activity.

If you were a target of a TDoS attack, immediately contact your financial institutions, notify your telephone provider, and promptly report it to the IC3 website at www.ic3.gov. The IC3 complaint database links complaints to assist in referrals to the appropriate law enforcement agency for case consideration. The complaint information is also used to identity emerging trends and patterns

GoDaddy scam email

I had to share this information that was passed onto me by my friend Denise Richardson of GiveMeBackMyCredit.com

Quick scam alert...DO NOT FALL FOR the latest email scam circulating. It arrives as an order confirmation from Go-Daddy and though it appears to look very authentic -it's anything but that. The email includes Go-Daddy's official phone number and logo and it also includes a few infected links that the scammers hope you will click on. When clicked on you will undoubtedly download malicious spyware onto your computer.

To read the entire article go to
Scam Alert: GoDaddy "Order Confirmation" email is a Scam - Denise Richardson

Social Security numbers

While watching the movie The Blind Side, my husband and I noticed something . . . when the main character Michael Oher gets his drivers license there is a close up shot of it, and his Social Security number is listed on the driver's license!


I was shocked when I saw this, and I had no idea that some states actually did this since I have never lived in a state that did this.  Since I saw this as a HUGE risk to identity theft,  I asked a good friend of mine, Denise Richardson, who operates the website GiveMeBackMyCredit.com and is a wonderful resource on the topic of identity theft about this, and here is what she sent to me . . . 

Can a state use my Social Security number as my drivers' license number?

Not any longer. The Intelligence Reform and Terrorism Prevention Act of 2004 prohibits states from displaying your SSN on drivers' licenses, state ID cards, or motor-vehicle registrations. The law went into effect December 17, 2005, and applies to all licenses, registrations, and identification cards issued after that date. If your license still uses your SSN as the ID number, you can request this be changed. You don’t need to wait until it expires to get one with a different number, though you may be charged a fee for the new issuance.


More information on the Intelligence Reform and Terrorism Prevention Act of 2004 is available as follows:

• Social Security Administration, www.ssa.gov/legislation/legis_bulletin_010705.html
• Congressional Research Service, www.fas.org/irp/crs/RL32722.pdf .

Scammers using the Make A Wish Foundation's name

Scammers are calling people telling them that they have won a sweepstakes sponsored by the Make A Wish Foundation. This scam preys on the victims trust of the good name of the company that the scammers are hiding behind. There was a full article on this that you can read here.

Remember, you have to enter a sweepstakes in order to win, and if there are any fees connected with your winnings a legitimate company could take those fees from your winnings.  You would never need to wire them any such fees.

Bank of America

I just had to share this with all of you.  I found it at http://showdowninamerica.org/edda-lopez-petition

Edda Lopez entered into an agreement with her previous mortgage company under a federal program, the Home Affordable Modification Program.

Edda complied with the three-month trial period and was then notified that her trial-period mortgage payment would be fixed for the next five years, at $2100/mo.

Unfortunately, once Bank of America took over the servicing of her mortgage, they reneged on this agreement, and increased her payments to $3100/mo. When Edda called Bank of America to find out why her payments had increased, she was told that her home was already in foreclosure and set to auction on June 28.

It is difficult to interpret Bank of America’s decision as being anything other than willfully cruel. Ms. Lopez is a disabled widow who nonetheless complied with her agreed-upon mortgage amount, and is now facing homelessness after living in her home since 1996.

If you agree with me that this is wrong, please go to http://showdowninamerica.org/edda-lopez-petition and sign the petition.

Warning from the BBB

The BBB would like to warn people about scammers using TTY telephone services. TTY is a telephone service that allows people with hearing or speech disabilities to place and receive phone calls.

A recent article about this scam can be found at http://www.myfoxtwincities.com/dpp/news/bbb-warns-business-of-phone-scam-june-13-2010




These scams work in the same way as the IP relay scams that we have reported on at Scam Victims United for several years now.

Oil spill and charity scams

Why is it that when there is a tragic event in our world it always seems to be followed by a new wave of scams? I feel that is because the scammers use our emotions and wanting to help others against us.  They know that if we think we are helping someone else out we are more willing to donate money or not check out the facts.

It is times like this that we usually see an increase in charity scams, where the scammer will pretend to be a representative of a charity collecting money to help the victims of a tragedy.  We as Scam Victims United recommend that you NEVER give money to a charity through an email link that was sent to you, a phone call or a person that knocks at your door.  If you really would like to help out the people suffering from a tragedy, then you should be the one to contact that organization to make the donation.  This way you will know that it is a real agency or charity and not just a person trying to separate you from your money.

How do you find the "real" charities? I would start by checking with the following organizations.

BBB Wise Giving Alliance
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203
(703) 276-0100
www.bbb.org/charity

American Institute of Philanthropy
P.O. Box 578460
Chicago, IL 60657
(773) 529-2300
www.charitywatch.org

Charity Navigator
1200 MacArthur Boulevard
Mahwah, NJ 07430
(201) 818-1288
www.charitynavigator.org

GuideStar
4801 Courthouse Street, Suite 220
Williamsburg, VA 23188
(757) 229-4631
www.guidestar.org

Scam Emails

Here is one where the subject and content of the email says that they are with the Attorney General's Office, but the "from" email address says Western Union Agent . . . and of course the reply to email address is a totally different address.

Subject: OFFICE OF THE ATTORNEY GENERAL ..

From: westunionagent@gmail.com

Reply To:

ericholder1961@yahoo.com.hk

OFFICE OF THE ATTORNEY GENERAL

441 4th Street NW, Suite 1145S

Washington, DC 20001

Attention: Sir,

We have received instruction from the Police Department ,Home land Security and the Federal Bureau of Investigation (FBI) here in the United States of America to prosecute you over allegations of money laundering and terrorist ($10m usd) related activities to which there is over whelming evidence of your involvement.

Note a copy of this email have been forwarded to the UNITED STATE OF AMERICA POLICE/AUTHORITIES and will be ordered for your immediate arrest.

The need for your urgent prosecution arose from your inability to secure the mandatory Clearance Certificate from the Economic And Financial Crimes Commission (EFCC), Nigeria inspite of several opportunities given to you by the Police Department,Home land Security and FBI.

Inview of the indicting report submitted to the Police Department ,Home land Security and FBI by the Economic and Financial Crimes Commission (EFCC), the Police Department ,Home land Security and FBI has recommended for your immediate prosecution.

You have to obtain the required Certificate from EFCC- DIRECTOR, DR. FRANK ALI.

CONTACT HIM ON THIS EMAIL ADDRESS : drfrankali@hotmail.com and the Cost of the Certificate is $170.00 only We are giving you notice of service of writ of summons after seven days of receiving this letter by mail.

If after the seven days and you are not able to obtain the Certificate to clear yourself before the Police Department ,Home land Security and FBI, Legal prosecution will begin immediately.

Justice delayed is justice denied.

Your's faithfully,

Attorney General

Eric Holder

Survivors in Action

Survivors In Action (SIA) is a non-profit national advocacy group that supports victims and the families of victims of any crime, including domestic violence, identity theft, elder abuse, cyber-stalking, stalking, child abuse, rape, and sexual assault.

I am proud to say that Scam Victims United and Survivors in Action are both working towards the same goal of supporting victims.

Good news for some homeowners

In a press release from the FTC it was announced that Countrywide, who was accquired by Bank of America in 2008, will be paying $108 million to homeowners who were struggeling to keep their homes and Countrywide collected exsessive fees from.

“Life is hard enough for homeowners who are having trouble paying their mortgage. To have a major loan servicer like Countrywide piling on illegal and excessive fees is indefensible,” said FTC Chairman Jon Leibowitz. “We’re very pleased that homeowners will be reimbursed as a result of our settlement.”

The bank took advantage of the fact that these people were in an emotional place while they were making these choice because they feared that they could loose their home.  They trusted what the bank employees were telling them, and as my husband and I learned years ago, you cannot always trust that the information that they are giving you is true and accurate, even when you think you are asking the right questions.

To read all of the information on this case and the settlement with the FTC, you can go to
http://ftc.gov/opa/2010/06/countrywide.shtm

MoneyGram and Nigeria

On June 8th, 2010 MoneyGram released the following information. Because I feel so strongly about this topic, I would like to share the entire press release with you, along with my personal thoughts on it.

MINNEAPOLIS, Jun 08, 2010 (BUSINESS WIRE) --MoneyGram International (NYSE:MGI), a leading global money transfer company, announced today that First Bank of Nigeria Plc has selected MoneyGram to provide money transfer services in its more than 500 locations across the nation. First Bank, established in 1894, is Nigeria's oldest bank and one of the largest in terms of network size. First Bank has locations in all key cities including Abuja, Benin, Lagos, Iabdan, Port Harcourt, and Warri as well as a significant presence in rural Nigeria, some operating 24 hours a day, seven days a week, making MoneyGram services even more convenient for Nigerians.

Is this really what we need?  for Money Gram services to be even more convenient for Nigerians?  I feel that it is pretty convenient for them just as it is.  Actually it is way TOO convenient for them to pick up money that people receive from counterfeit cashier's checks, or for fake Secret Shopper jobs or that people believe that they are sending to someone within the United States.

"MoneyGram, which has operated in Nigeria since 1998, saw significant growth between 2006 and 2008 when it tripled its network in the country," said Vicky Johnston, MoneyGram's senior regional director for Anglo Africa and Middle East. "We are excited about partnering with First Bank as it is MoneyGram's most recent and significant expansion which will allow us to provide a service to so many more people through the bank's large number of branches."

Ironically, during the same time period that MoneyGram increased it's network in the country, the number of money lost to scams and fraud also increased.  You can see the increase on the chart below which is from the Annual Report put out by the Internet Crime Complaint Center (IC3.gov)

To commemorate the agreement with First Bank Plc, MoneyGram's Chairman and CEO, Pamela H. Patsley is in Nigeria and will attend the official launch event scheduled for today. During her visit, Patsley will address the media as well as CEOs of MoneyGram's agent banks in Nigeria, discussing the common goal of bringing needed financial services to the people of Nigeria and the growth opportunities there.

I have a better idea . . . what about discussing the common goal of fighting all of the scams and fraud that pass through MoneyGram every day, and how they can do more to save those customers from becoming victims.  Before we start looking at the financial needs of the people of Nigeria, I think we need to protect the financial needs of the people right here in the United States. 

"MoneyGram is pleased to partner with First Bank," said Patsley. "Our partnership will help to ensure that our services are accessible and convenient for the people of Nigeria and that we can continue to meet the growing demand of consumers in this important remittance market."

And why are their demands growing?  Because there are more and more scams going undetected or people just turning a blind eye to them. 

Nigeria, Africa's most populous nation, is ranked in the top 10 receive countries for money transfers. The World Bank estimates that $10 billion USD in remittances was sent to Nigeria in 2009 - with the United States being the primary send country. Other top send countries include Canada, Germany, Israel, Italy, Liberia, Libya, Malaysia, Spain, South Africa and the United Kingdom.

That is because Nigeria is also ranked in the top 3 countries for money wire transfer scams.  The other countries would be Canada and the United Kingdom, who are also ironically on the list above.  I wonder hom much of the $559.7 million dollars from the chart above that went out of this country in scams is directly a part of the $10 billion reported to be going into Nigeria in 2009? 

With the First Bank agreement, MoneyGram now has a total of eight bank relationships, thus further proving that MoneyGram is dedicated to providing reliable and safe money transfer services to Nigerians - wherever they may reside. Furthermore, agent banks in Nigeria have brought a positive experience to the remittance business with their individual pedigree in banking, service quality delivery and branch network, which provides a sense of ease for those receiving funds from family members working in other countries.

So we are going over and above to make sure that Nigerians have a reliable and safe money transfer service, but we are doing very little to offer that same kind of safety to the MoneyGram customers in the United States.  The last sentence in the above paragraph really gets me . . . . which provides a sense of ease for those receiving funds.  Why is it that we seem to care more about the people in another country, who are one of the main sources of these scams, than the people here in the United States that they are scamming? 


Shawn Mosch
Co-Founder of ScamVictimsUnited.com
 
Find us on Twitter, Facebook and more through
http://www.retaggr.com/page/ShawnMosch

Sign our petition for Scam Education and Awareness Programs at
http://www.change.org/petitions/view/create_scam_education_and_awareness_programs

Teaching cyber safety in our schools

A recent survey conducted by the National Cyber Security Alliance interviewed school staff members about the cyber safety information being taught to students today. Below are some of the results that relate to the information we educate people on at Scam Victims United

What Cyberethics, Cybersafety, and Cybersecurity issues have come up within classroom discussions with your students?

Scams, fraud, social engineering, and phishing 1%
Identity theft 1%

Who is primarily responsible for teaching children to use computers safely and securely?
72% of Teachers answered Parents
46% of School Administrators answered Parents
58% of Technology Coordinators answered Parents

This part scares me since many parents do not know the correct information, so how are they supposed to teach their children? We need to get more information on scams and fraud into the schools. This is why I go to local high schools to give presentations.

If you would like to see scam education in your school system there are several things you can do.

1)  Contact me and I can assist you with finding an expert in your area to speak at your school
http://www.retaggr.com/page/ShawnMosch

2)  Sign our petition asking for scam education and awareness programs http://www.change.org/petitions/view/create_scam_education_and_awareness_programs

3)  Contact your school and have them contact us for more information.  If they have a Personal Finance teacher they are usually open to these presentations.  http://www.retaggr.com/page/ShawnMosch

Identity Theft Sends Innocent Student to Jail - Denise Richardson

Here is a great article from my good friend Denise Richardson of GiveMeBackMyCredit.com

I feel that this is very important information for every teenager to read. At this time of year when everyone is thinking about graduations and going off to college, it is important for us to remember that scams, fraud and identity theft can happen to anyone at any time, and that we need to have the right information to protect ourselves.

Darrius Whitehorn, a Loyola University criminal justice student spent a week in jail for a crime he didn't commit. Darrius learned the hard way that when it comes to identity theft, you are guilty until proven innocent. It seems his Social Security number and his birthdate matched that of a deceased, convicted robber named Kirk Davis.

To read the full article, go to
Identity Theft Sends Innocent Student to Jail - Denise Richardson

Survivor Scams

I was recently at an event sponsored by the BBB and AARP, and they mentioned a scam that I had not heard of yet that they were calling The Survivor Scam. Using the information in an obituary listing, the surviving spouse is contacted and told that this person knew a member of their family, maybe from high school, and was very sorry to hear about their recent loss. This person then goes on to say that they now own a company, like a carpet cleaning company for example, and would like to offer the surviving spouse a free carpet cleaning as a sign of their sympathy for their loss.

Now, this scam can run one of two ways. Either the person really does work for a carpet cleaning company, and when they come out to complete the complementary cleaning they will then sell the surviving spouse on additional services that they do not need, or the person does not really work for a cleaning company and they are just trying to get into the house to rob the surviving spouse.

Be on guard for these scams. Ask for the name of the company and then tell them that you will have to look at your schedule to see when you could have them come out. If it is a person just trying to get into your house to rob you, then they will not be able to give you a company name.
If they do give you a company name, on your own, look up the name and phone number of that company in the phone book or on the internet and call them back if you really do want to schedule something. Be ready to be firm and say no to additional charges and services.

Counterfeit checks and MoneyGram

I am currently working with a lawyer who is interested in speaking to victims of counterfeit cashier's check scams who wired money using MoneyGram.  Please contact me if you would be willing to speak with this lawyer.  If this turns into a case, it could be a huge break for victims of these scams.

Do not post your contact info here . . . if you do not already have my contact information, you can find me through http://www.retaggr.com/page/ShawnMosch

 

News from the FTC

The FTC has some great information on efforts that they have taken against scams and fraud.  A recent press release talks about a New Jersey based telemarketing scheme and Civic Development Group.  To read the entire press release, go to http://www.ftc.gov/opa/2010/03/cdg.shtm