Category Archives: fraud

True Crime Thursday – Cybercrime Then and Now

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by Debbie Burke

@burke_writer

Cybercrime continues to expand globally with costs estimated to reach more than $10 trillion. That’s trillion with a T.

At the turn of this century, cyberattacks affected relatively few individuals. From 2001 to 2017, statistical charts showed a gradual increase. Between 2018 and 2020, cybercrime numbers shot up like a rocket. Since then, the rise maintains a nearly vertical trajectory.

Take a look at this chart by Statistica.com.

According to Keepnetlabs.com, cyberattacks occur every 39 seconds, with ransomware incidents happening every 11 seconds.

I first wrote about cybercrime, hackers, and deepfakes back in 2019, imagining how AI could be misused in the future. Early on, attacks were often pranks, like that naked guy who crashes a Zoom meeting.

During Covid, people were stuck home with nothing to do. Idle hands are the devil’s workshop. Cybercrime blossomed into a major industry. Since then, with AI advances, it’s exploded beyond all imagination. I’ve written about various forms here, here, and here.  

Here are four updates on cyberscams:

  1. Social media cloning continues to be a growing problem, according to attorney Steve Weisman who writes the great informational site, Scamicide.

Almost a decade ago, cloning happened to me on Facebook. I’d developed a small but loyal following on FB, including readers from all over the US, Canada, UK, Australia, and Japan. Then someone cloned my identity. At the time I didn’t even know what the term “cloning” meant.

Cloning is a process by which a bad actor takes over your social media handle, creates a new account using your same name, information, photo, etc. and pretends to be you. They usually send out new friend “requests” to your contacts. Anyone who accepts the request is now caught in the bad actor’s web.

My FB friends received strange messages supposedly from me. I learned about it after several emailed me, asking if I was in Spain and needed bail money. Uh, no. When I tried to access my account, it was blocked. Nor could I contact FB for help. A brilliant astrophysicist friend figured out what happened and contacted them on my behalf.

Many hours of work later, things were back to normal, with newly adjusted stringent privacy settings. But why did fixing the problem require help from a friend with a Harvard PhD?

Some months later, my account was cloned again. At that point, I decided if FB’s security was that lax, and reporting a problem was so difficult, I didn’t need the headaches. I closed my account, unfortunately losing contact with valued readers.

Back then, FB was reluctant to acknowledge the problem and made it nearly impossible to report. I figured maybe my case was an unusual occurrence.

Wrong.

Now, according to Steve, FB/Meta admits to “as many as 60 million phony cloned Facebook accounts including hundreds of its founder Mark Zuckerberg.”

Cloning happens across all social media platforms, and is especially pervasive when they’re interconnected with each other, like FB and Instagram. Criminals are happy to exploit any opportunity to reach thousands, if not millions, of people with a few clicks. Cloning is only one of many ways they victimize users of social media. That topic could fill up a whole ‘nother post.

2. Smishing scams – According to Steve Weisman’s new post, smishing is defined as:

…Text messages that lure you into clicking on links or providing personal information in response to a text message from what appears to be a trusted source, such as a company with which you do business.

Steve’s post says the FTC warns of a huge uptick in smishing that cost $470 million in the past year. Text messages often appear to come from Amazon, FedEx, USPS, Cash App, Netflix, banks, etc.

A new twist is: 

Making matters worse, scammers are able to use bots to send thousands of smishing text messages in a matter of seconds and while many phones have anti-spam filters to recognize repetitive text patterns used by scammers, scammers are able to use AI to create slight variations of their smishing text messages to avoid detection.

 

Every week, I receive smishing messages supposedly from my bank, warning of suspicious activity in my account. 

Phony messages from Fedex and the post office claim there’s a problem with a delivery and tell you to click on this link. Don’t do it!

And speaking of the post office…

3. Account hacking – Here’s a weird crime twist that recently happened to me.

For years, I’ve used usps.com to preprint and prepay postage for priority mail labels. During extended absences from home, I preprint labels for the friend who forwards first class mail to us once a week at a Florida address.

Around the 2024 holidays, our forwarded mail didn’t arrive in Florida. Tracking showed a circuitous route that ended with the vague message “in transit.” We visited the local Florida post office. The clerk said a bin of mail had gone missing. “It happens all the time. It’ll eventually turn up.”

How reassuring since our envelope contained bills that needed to be paid now.

After more trips to the post office, we learned the envelope had been “returned to sender” to our address in Montana.

What???

The mailing label was totally correct since it had been officially printed by the post office. So why wasn’t it delivered?

Meanwhile, our friend sent another batch of mail to Florida using another preprinted label. But when I checked tracking, it showed that envelope had been delivered to an address in Maryland.

What???

Back to the Florida post office. The same helpful clerk ran the tracking number through his computer. Yup, his also showed delivery to Maryland. Then he disappeared in the back processing room. Fifteen minutes later, he came out with our envelope. Even though tracking showed delivery to Maryland, here it was in Florida where it was supposed to be.

Something smelled fishy.

Since our friend in Montana still had several preprinted labels that had not been used, I checked the tracking numbers for those. Incredibly, all showed as already delivered to addresses around the country—New York, Georgia, California, etc.

What???

Back to the post office to show this evidence to the same long-suffering clerk (who was now our new best pal). He called fraud/security and dug deeper. After nearly an hour of research, he suspected someone had hacked into our usps.com account. He recommended changing the password, which I did.

Fortunately, no one had accessed the VISA card I used to pay for the postage.

The plot thickens.

Turns out this is a regular racket. Clever thieves hack into usps.com user accounts, and steal labels that have already been paid for but not yet used. They reprint the labels with the same tracking bar code but a different address. They then use those fraudulent labels to ship merchandise (usually stolen) to customers of their own shady businesses.

Selling stolen merchandise and shipping it with stolen postage equals zero expenses and 100% profit for crooked operators. Our post office pal gave the thieves a grudging compliment: “These guys are very good.”

A clear case of postal fraud, likely an inside job. Most of the bogus labels had been routed through the post office’s Bethesda, MD distribution center. If I were a detective, I’d start my investigation in Bethesda. Hint, hint.

Did fraud/security ever follow up? Dunno. Our PO pal never heard another word. Will anyone ever get caught or prosecuted? Unlikely.The advantage for cybercriminals is they are nearly impossible to track. 

4. Impersonation scams – For years, scammers have posed as government agencies and law enforcement. They contact victims by phone, email, text, or social media with bogus claims you owe fines and/or back taxes that must be paid immediately or else you’ll be arrested. But because they are such generous, caring folks, they’ll make your problem go away if you pay them with cryptocurrency, gift cards, wire transfers, or other untraceable funds. 

This morning, I received a public service announcement from the FBI warning of scammers who pose as representatives of the FBI’s Internet Crime Complaint Center (IC3) who claim they recovered money you’d been previously scammed out of. They will return that lost money to you…you guessed it…for a fee, payable by cryptocurrency, gift cards, wire transfers, or other untraceable funds. 

Yup, the cybercrime situation has gotten so out of control that the FBI’s IC3 division has to issue PSAs about their own department being impersonated. Talk about irony.

Back in 2000, we wondered IF we might ever be victims of this mysterious new method of crime.

Now it’s a certainty and the only question is WHEN? 

A sad fact of life in the 21st century.

~~~

Now that I’ve spoiled your day, it’s your turn, TKZers.

Share your personal experience with cybercrime. Any brilliant suggestions to block criminals? Do you have favorite security software?

~~~

Coming July 2025! Debbie Burke’s new writing craft guide:

The Villian’s Journey ~ How to Create Villains Readers Love to Hate

For more details, please click here. No, this link won’t ask for cryptocurrency, gift crads, or wire transfers!

True Crime Thursday – Baby Grand Piano Scam

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Searobin, CC BY-SA 3.0 <http://creativecommons.org/licenses/by-sa/3.0/>, via Wikimedia Commons

by Debbie Burke

@burke_writer

A college music major receives an email that’s a dream come true. A professor from the same college retired and must find a good home for a gently used baby grand piano. Money isn’t important. In fact, the professor will give the piano away as long as the recipient cherishes it as much as the professor did. To receive the piano, the student only needs to pay a moving company to deliver it.

For a little over $500, delivery is in 10 days, or for expedited two-day service, the fee is $1000. Simply pay the charge in advance by Zelle or cryptocurrency.

A university alum receives a similar email from a professor at that university who’s assisting the widow of a faculty member. She must downsize and wants to donate her husband’s precious baby grand piano to someone who will truly appreciate it. Similar terms: pay a moving company only for delivery charges by Zelle or crypto payment in advance.

Seeing a pattern?

In reality, there is no retired professor or widow, no moving company, and, most of all, no piano. There is only a scammer who preys on unsuspecting victims, pocketing untraceable payments that can’t be recovered.

Scammers understand psychology and know how to appeal to emotions. They offer a music lover’s dream come true for free. But free is almost never free. 

Attorney Steve Weisman posts daily fraud warnings on his excellent website Scamicide. His report from June 21, 2024 says:

“Cybersecurity company Proofpoint recently discovered a scam in which people are receiving emails offering a free piano which is available often purportedly due to a death in the family.  The scam has largely targeted students and professors at colleges and universities. Often in the email, the scammer poses a someone from the same college or university as that of the targeted victim.  According to Proofpoint they have identified about 125,000 of these emails sent since the beginning of the year.”

Steve adds:

“People may trust emails such as this due to affinity fraud where we tend to trust people with whom we share some kind of connection and getting an email such as this that appears to come from someone at your college or university may cause the person receiving the email to trust it to be legitimate.”

The free baby grand piano scam has been around for several years but affinity angle may be a newer, more sophisticated refinement. Reddit has numerous reports about the fraud, including this one from 2021 where the intended victim fortunately caught on before sending money.

The scammer runs ads in online marketplaces like Craig’s List, offering a premium piano for free. The ad is embellished with sentiments that appeal to the buyer’s emotions, like: “want[ing] the piano to be used to share with friends and family the joys of music.”

The person who answers the ad is then referred to a professional-looking website of a moving company that will deliver the piano. Contact may be by email or live chat. The mover even sends a photo of the piano to add legitimacy. However, the photo is probably a generic one from a stock photo site…like the one I used to illustrate this post.

Pro tip: To check photo sources, run a reverse image search through TinEye or Google. This tip also works to verify photos featured on dating sites where the subjects are often models, not real people.

The terms for the delivery payment should set off deafening alarm bells: No credit cards, no PayPal, no secured money transfers. Payment must be made in advance via Zelle, money order, or gift cards.

Peer-to-peer (P2P) payments are popular because they are a fast, convenient way to send money.

The downside: if the merchandise isn’t delivered or is defective, the buyer has no recourse.  Once fraudsters receive the money, they disappear. The victim is out of luck because law enforcement can’t help.

Here’s Steve’s recommendation about using P2P services: 

“There are many other scams involving Venmo, Zelle and other P2P services and the legal protection that you get with these services in the event you are scammed is nowhere near as great as the protection you get with your credit card.  A good rule to follow is to never use Venmo, Zelle or any other P2P service for any business transaction, but limit their use to small transfers between friends and family.”

Brown University posts piano scam warnings on their “Phish Bowl” site. They included the below email which was particularly entertaining. Notice Josiah’s position.

From: Josiah [deleted]
Subject: Baby yamaha piano for free
Date: October 13, 2023 at 5:37:10 PM EDT
To:

Dear Student /Staff/Faculty,
One of our staff, Mr. Phil H. is downsizing and looking to give
away his late dad’s piano to a loving home. The Piano is a 2014 Yamaha
Baby Grand size used like new. You can write to him to indicate your
interest on his private email [deleted] to arrange an
inspection and delivery with a moving company. Kindly write Mr. Phil H. via your private email for a swift response.

Josiah [deleted]
Professor of Psychoceramics

Per Wiktionary: “Noun. psychoceramics. The study of crackpots.”

Gotta appreciate a scammer with a sense of humor.

Many thanks to Steve Weisman for permission to quote.

~~~

TKZers: Do you know about frauds where valuable items (like a piano) are offered as bait? Have you or someone you know ever been targeted by an affinity scammer?

~~~

 

Investigator Tawny Lindholm encounters a clever affinity scam in Stalking Midas. But a glamorous con artist has killed before to cover her tracks. Now Tawny is in her crosshairs.

Sales link.

 

 

 

True Crime Thursday – Rent-A-Vet Frauds

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Photo credit: house.gov

by Debbie Burke

@burke_writer

In an earlier life, my husband and I operated several businesses in San Diego, historically a Navy and Marine Corps town. Whenever possible, we hired veterans. Most became valued key employees, supervisors, and managers we trusted and appreciated.

Giving hiring preference to U.S. veterans dates back to the Revolutionary War when government jobs were granted to those who had served their country, a tradition traced even earlier to European practices. In those days, the courtesy was mostly extended to officers, not the rank-and-file soldier.

The first law giving veterans hiring preference was enacted during the Civil War:

Persons honorably discharged from the military or naval service by reason of disability resulting from wounds or sickness incurred in the line of duty shall be preferred for appointments to civil offices, provided they are found to possess the business capacity necessary for the proper discharge of the duties of such offices.

The Veterans Preference Act of 1944 expanded coverage and was endorsed by President Franklin Delano Roosevelt who wrote:

“I believe that the Federal Government, functioning in its capacity as an employer, should take the lead in assuring those who are in the armed forces that when they return special consideration will be given to them in their efforts to obtain employment. It is absolutely impossible to take millions of our young men out of their normal pursuits for the purpose of fighting to preserve the Nation, and then expect them to resume their normal activities without having any special consideration shown them.”

From moving companies to handyman services to landscaping to construction, “rent-a-vet” is common term that appeals to those of us who want to do business with former service members. “Rent-A-Vet” ads are listed on Yelp, Craig’s List, and through employment services.

But, as always, honorable intentions can be twisted by dishonorable people for their own selfish benefits.

Unfortunately, you can’t always believe claims that workers are veterans or that companies are veteran-owned.

Rent-A-Vet fraud schemes are common. Two popular variations are 1) workers who claim to be vets but aren’t, and 2) companies that “rent vets” (IOW, they pay vets) to front as owners and/or officers of a company.

In a 2017 example, a veteran named Paul R. Salavitch was hired by Jeffrey K. Wilson (not a veteran) who owned a Missouri-based construction company, ironically named “Patriot Company, Inc.” Salavitch was named president of Patriot and acted as their front man, using his status as a service-disabled veteran to give the company preference when bidding for 20 government contracts totaling $13.8 million. Salavitch did not make decisions and was not involved in day-to-day operations. In further irony, he held a full-time job at the Department of Defense.

In 2018, Patriot owner Wilson pled guilty to one count of government program fraud. Salavitch pled guilty to a misdemeanor charge of making a false writing.

More recently, in March, 2024, Edward DiGorio Jr., 65, and Edward Kessler, 68, pled guilty to two counts of fraud in federal court in Pittsburgh, PA. Neither DiGorio nor Kessler were veterans, nor service-disabled. Between 2007 and 2018, to gain lucrative government contracts for two construction companies they owned, they “paid service-disabled veterans to falsely represent themselves as the primary owners and operators of ADDVETCO and Hi-Def, and to falsely attest to ownership of the companies on critical documents submitted to the VA.”

Their companies were awarded 67 contracts; 50 totaled $1 million plus. For two recent contracts, they received more than $400,000 in profits. Edwards and Kessler face up to $1 million in fines and up to 10 years in prison. They will be sentenced in July, 2024.

These fraud cases deprived legitimate veterans and service-disabled veterans of contracts and income they should have been entitled to.

How can you avoid frauds by people and companies passing themselves off as veterans or veteran-owned? Here are a few ways:

  • A DD-214 is proof of military service.
  • An employer may ask the person if s/he is a veteran.
  • Check out small business certification at: veterans.certify.sba.gov/
  • Call references.
  • Look up the company with the Better Business Bureau.

~~~

TKZers: Have you or someone in your family benefited from veteran’s preference?

Is veteran status important to you when looking for a contractor or employee?

Have you hired or employed veterans?

~~~

 

 

Easter weekend sale! Only $.99 for Deep Fake Double Down, mystery-thriller finalist for BookLife Prize. Buy at this link. 

 

True Crime Thursday – Investing in Blueskycoin

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by Debbie Burke

@burke_writer

Meet Sophie and Fred, both 59. Fred has a good job with the county and hopes to retire in a few years. Sophie’s job as an administrator pays well but she recently had to cut back to part-time to care for her mother who has cancer.

Their mortgage is paid off but this year property taxes on their home jumped by a third. They no longer have weekly date nights because restaurant prices have increased. They’re helping their adult son Bobby with rent and car payments because he’s paying back student loans. Plus, he recently told them he and his girlfriend are having a baby. Even though that means more expenses, Sophie and Fred are ecstatic and post the ultrasound image of their granddaughter on Facebook. They also regularly post photos of their entertaining dog.

Then Sophie’s mom gets worse. Sophie quits her job to be a full-time caregiver. Inflation strains their budget. Their income is reduced. Bills increase. Fred must continue to work and retirement is pushed far into the future. Just to survive, they may have to sell their home.

They are not wild speculators or greedy Wall Street wolves. They are regular folks feeling desperate about money.

Enter Amelia. 

Amelia is a high school classmate whom they hadn’t heard from in years. She reaches out to them on social media.

[Alarm bell #1]

Just for fun, let’s have a quiz. Where alarm bells are noted in red, what are reasons for them to ring? Answers at the end of the post.  

Sorry to miss our 40th reunion but I was on a cruise in Bermuda. How are you guys doin’? Excited about your new granddaughter! Do you still have that adorable little cockapoo Sniffy?

They message back and forth, catching up.

Then Amelia admits she’s had money problems–her employer went bankrupt, taking down her 401K and pension accounts. She lost her home to foreclosure and her car was repossessed.

“How can she afford a Bermuda cruise?” Sophie asks Fred.

“Hope she doesn’t hit us up for a loan,” he answers.

But that doesn’t happen. In fact, Amelia’s next communication is just the opposite.

The good news is, Amelia made an amazing recovery by investing in a new cryptocurrency, BlueSkycoin (fictitious name). In just over a year, thanks to her investment “coach”, her initial investment of $20,000 is now worth $432,497.

[Alarm bell #2]

She sends screenshots showing the meteoric rise in value. Her statements also show large withdrawals she’d made to buy a new home and a Tesla.

Sounds kinda risky, Fred messages back. Are you sure it’s legal? 

Absolutely! Totally legal with a guaranteed return. You can take your profits out anytime. 

[Alarm bell #3]

Amelia was always at the top of their class and earned an MBA from Wharton. Fred and Sophie figure she must know what she’s talking about. Now they’re curious.

Amelia directs them to a glamorous, professional website with testimonials from renowned financial gurus and celebrities. Even Elon touts this cryptocurrency platform.

[Alarm bell #4]

Amelia explains “Investment Coach” Victoria is very picky about whom she accepts as clients and needs to check people out before she agrees to let them into the exclusive limited pool of investors.

[Alarm bell #5]

When Sophie and Fred email Victoria for more information, she asks them to demonstrate they’re serious by opening an online account with a good faith deposit of $5000, along with a processing fee of $500, all refundable of course once they’re approved.

[Alarm bell #6]

She conveniently provides a link to set up the account and their digital wallet.

[Alarm bell #7] 

And there’s one more detail for security purposes. She needs to positively verify their identities.

On the link, Fred and Sophie are asked to send photos of their Social Security cards, passports, driver’s licenses, and bank account numbers to prove their creditworthiness. For added safeguards to protect their investments, they need to make videos of themselves for biometric verification and facial recognition to prevent unauthorized access to their digital wallet.

[By now, the alarm bells are deafening]

Fred and Sophie comply with the requests.

A few days later, Victoria sends screenshots showing their $5000 has already grown to $19,286.

Weeks later, their BlueSkycoin portfolio is worth $77,894.

More good news. A special limited new issue of BlueSkycoin is being offered to a select group of Victoria’s clients. For only a $15,000 deposit, Sophie and Fred will receive $45,000 worth of BlueSkycoin. Further growth is not only projected but guaranteed.

They deposit $15K more from savings and watch their earnings grow day by day.

[Each additional request for money is another alarm bell. Notice Sophie and Fred keep putting money in but have not actually taken out any of their supposed earnings. Their profit shows only onscreen] 

They promise to help Bobby and his girlfriend move to a larger apartment and they buy baby furniture. Sophie hires a helper for her mother.

Now they are committed. Even if they suspect something is amiss, they don’t feel they can back out.

When the value of their BlueSkycoin reaches $175K, Fred suggests they celebrate by taking their long-postponed dream vacation to Tahiti.

They request funds from their digital wallet. Victoria says no problem. However, before withdrawal, there are taxes and handling fees that must be paid. That requires an additional $20K deposit to their account.

[More requests for money equal more alarm bells]

Of course, Victoria promises, they’ll quickly make that up because BlueSkycoin is set to run up even higher in value.

Sophie deposits money to cover the taxes.

Then the blue sky falls.

Overnight, Sophie and Fred are blocked from accessing their Blueskycoin account. The digital wallet they believed contained $175K is nonexistent. The trading platform vanishes, along with Victoria’s glamorous website.

Forwarding address: EffU.com

Fred and Sophie are victims of a “rug pull” which is exactly what it sounds like.

The glowing testimonial on Victoria’s website was delivered by a deepfake Elon.

Further, the rest of their savings were drained from their real bank account by “Fred” and “Sophie” imposters masquerading with stolen identification and login credentials to make withdrawals. A bank employee even talked to “Sophie” on Zoom.

Sophie could be a victim of revolutionary new malware called GoldPickAxe.

Phil Muncaster of Infosecurity Magazine describes GoldPickaxe as:

“…a sophisticated new Trojan designed to steal facial biometric data and use it to produce deepfakes of victims which can bypass banking logins.

“[The malicious app] prompts the victim to record a video as a ‘confirmation method’ in the fake app. This is then used to create a deepfake video, which can be deployed in addition to the other collected data to enable a cybercriminal to bypass banking logins.”

Who are Amelia and Victoria?

Credit: Wikimedia

Chatbots.

The real Amelia has no idea of the mischief being done in her name because her social media account was cloned. A bot is using her account to impersonate her. Personal details, like the new granddaughter and Sniffy the cockapoo, were scraped from the internet.

Chatbots are ideal employees. They don’t call in sick; they don’t complain about working graveyard shift; they don’t demand raises.

In fact, they don’t even have to be paid.

Photo credit: CCA by SA 4.0 International, https://www.bybit.com/en-US/

Fred and Sophie are not real people, but rather composites of actual victims of cryptocurrency scams perpetrated by fraudsters assisted by AI chatbots.

They are victims of pig-butchering, defined by trendmicro.com as the way “scammers fatten up their victims with the promise of lucrative returns before ‘slaughtering’ them for their money.”

The State of California’s Department of Financial Protection and Innovation runs a scam tracking website that contains an ever-growing list of complaints about cryptocurrency scams.

In broad generalities, cryptocurrency is virtual money.

According to Investopedia:

“Virtual currencies are digital representations of value whose transactions are conducted only through electronic networks or the internet. They do not have a physical incarnation.”

In other words, you can’t put bitcoin in a vending machine and buy a soda, nor can you flip it and call heads or tails.

Investopedia goes on to say:

“Virtual currencies are a novel form of currency and, as such, are mostly unregulated. But that situation is changing, and an increasing number of government agencies and countries are considering the implications of introducing virtual currencies into their economies.”

According to Statista.com, revenue from the global cryptocurrency trading market is estimated at $51.5 billion for 2024. The number of users is projected to be 992.5 million by 2028.

Trading bots use artificial intelligence to predict where crypto markets are going. Some trading bots are legitimate; some are not.

SEON.io offers fraud prevention to online businesses and cryptocurrency platforms. According to their site:

“Bots are particularly useful to newbies and inexperienced traders. Many rely on trading bot platforms not just to trade fast and tirelessly but also to cover gaps in their knowledge as they learn the ropes. This is because bots use artificial intelligence to deliver insights as well as automation.

“The bots can react faster than humans and they never sleep. This means they can make split-second decisions that make traders more money.”

If you say so. To me, investing in financial transactions I don’t understand is bad enough; making them at lightning speed sounds, well, worse.

Here’s a formula for fraud: Take an investment that almost no one understands. Promise fabulous returns. Add AI technology to make money manipulation easy. Use AI chatbots to scale up to reach more victims. 

That adds up to a scammer’s bonanza.

What is the best protection against cryptocurrency scams?

Follow the immortal advice of Bernie Madoff:

“If you don’t understand the investment, don’t put your money there.” 

And,

“If it sounds too good to be true, it is.” 

~~~

Time for answers to the alarm bell quiz – what is the reason for each alarm? 

  1. Contact out of the blue. Scammers frequently impersonate friends, family, banks, government agencies and law enforcement. Always verify if the person on the other end of a private message, text, or email is actually who they say they are.
  2. Too good to be true. No legal, legitimate investment yields returns like this.
  3. Profits on investments are NOT guaranteed. 
  4. Fake celebrity endorsements are a growing trend. Just ask Elon, Oprah, and Taylor. Recently deepfake images of them have been used to sell products the celebrities didn’t endorse.
  5. False exclusivity. Scammers use this psychological trick to convince victims they are  lucky to be among the few members of an exclusive club.
  6. Money demand. As soon as the victim delivers money, the scammer wins.
  7. Clicking on an unverified link is dangerous. The scammer has control of the account and any money in it. Plus they can upload malware to your computer, phone, or other device.

Deafening alarm bells from here on. Victims have given scammers free rein to steal their identities and sell the info on the dark web. With GoldPickAxe software, they can create deep fakes of victims for endless nefarious purposes.

~~~

TKZers: How many answers did you get right? What additional reasons for alarm bells can you think of?

~~~

 

Deep fake videos are weaponized as false evidence against an innocent woman. When Tawny and Tillman try to help her, they’re sucked into a dangerous world of deception where only death is real. 

Deep Fake Double Down, BookLife Prize Finalist for Mystery/Thriller

Buy at this link

True Crime Thursday – Baby Formula Fraud

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Photo credit – Pexels Public Domain

By Debbie Burke

@burke_writer

When there’s a chance for profit, fraudsters never let a crisis go to waste.

One recent emergency was the 2022 shortage of infant formula, especially worrisome for parents of babies who have allergies or who need medical specialty formulas.

Vladislov Kotlyer, 43, of Staten Island, NY, saw the crisis as a profit opportunity. From March 2019 to October 2022, he collected $1.9 million from fraudulent claims to medical insurers and formula suppliers.

The Justice Department Criminal Division, the FBI, and US Attorney for the Eastern District of New York reported:

According to court filings, Kotlyar submitted forged prescriptions and medical records for specialty baby formula that was paid for by health insurers. Kotlyar obtained prescriptions and medical records for infants who were prescribed specialty baby formula and forged those records to obtain additional specialty baby formula. After receiving the specialty baby formula, Kotlyar fabricated issues with the shipments, including falsely claiming they were damaged or the incorrect formula in order to obtain additional formula at no additional cost. As part of the scheme, Kotlyar and his co-conspirators submitted more than $1.9 million in fraudulent claims to health insurers, including during a national shortage of baby formula.

On March 16, 2023, in federal court, Kotlyar pleaded guilty to fraud, agreed to forfeit $1 million, and pay more than $738,000 in restitution. He faces up to 20 years in prison for mail fraud. 

No word about what happened to the baby formula that he obtained as a result of his false claims.

The CDC cautions: “If you buy infant formula online, only purchase from well-recognized distributors and pharmacies (not individual people or auction sites).”

TKZers: Anyone want to guess what happened to the extra formula?

Donated to an orphanage?

Sold out of a car trunk in a Walmart parking lot?

A really splashy gift for a baby shower?

Or something else?

 

 

True Crime Thursday – Wire Transfer Fraud

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Photo credit: Tima Miroshnichenko-Pexels

 

By Debbie Burke

@burke_writer

Recently a family member purchased a condo in Florida and ran into a disturbing glitch that could have cost him a lot of money.

In olden days, when you bought real estate, you delivered a cashiers check—on a physical piece of paper—to the escrow company. The escrow company then completed the transfer of title and you received a recorded deed to the property—also on a physical piece of paper.

Fast forward to the digital world of 2023. Physical pieces of paper have mostly been replaced with electronic records. In many real estate transactions, instead of a cashiers check, funds are sent via wire transfer. You make a request to your bank to shoot money through cyberspace to the escrow or title company. Once the money is received, the escrow closes, and a virtual deed is recorded that you can access online. There is no physical piece of paper unless you print it yourself.

Exchanging large sums of money without a physical, analog way to trace it sounds fraught with peril.

Turns out it is fraught with peril. Criminals know wire transfers are an excellent way to steal money. Fraud is rampant, costing an estimated $220 billion/year. According to a 2021 survey by American Land Title Association, ONE THIRD of transactions with title companies were targeted by fraudsters. In 71% of cases, full recovery of money was not possible.

Scary? You betcha.

So why use wire transfers when large amounts of money are at stake?

According to a source at the Florida title company, Florida is designated as a state with a high level of drug trafficking and money laundering. Because of that, the federal government wants financial institutions to use wire transfers to enable the government to track money laundering. The source couldn’t explain why a cashiers check couldn’t also be tracked since it leaves a paper trail.

When my relative said he preferred to pay by cashiers check, he was told that the title company would not accept a cashiers check, even though it is legal tender.

How does wire fraud happen?

In many cases, the thief contacts the buyer via email, posing as a real estate agent, title company, or bank official. The email appears genuine. The message says the escrow needs money sooner than anticipated, or the amount has been recalculated and the final amount is different (or some other excuse).

And here is the transaction number to wire the money to.

Of course, the transaction number doesn’t go to the escrow but rather to the thief.

It vanishes with no way to trace or recover the money.

According to Hari Ravichandran, founder and CEO of Aura.com:

“Can a Wire Transfer Be Reversed?

The short answer: Not usually.

Domestic transfers between accounts at the same bank usually happen within 24 hours. But with the rise of digital banking, wire transfers process almost instantly.

Fraudsters can quickly receive the money, move it into another account, and vanish before the victims have time to cancel or reverse the transfer.

You can only reverse a wire transfer if the sending bank notifies the receiving bank of your cancellation request before the receiving bank processes the transfer. Once the receiving bank accepts the funds, you cannot reverse the transaction.”

Here’s a link to the full article about wire transfer scams.

Victims are banks, title companies, escrow companies, and, of course, the poor consumer who thinks he’s just bought the home of his dreams.

The title officer assured my relative that all would be fine as long as he didn’t fall prey to bogus emails.

But…(there’s always a But)

His transaction ran into a different problem.

Cyberattack.

A few weeks before, when escrow opened, he had visited the title company in person and obtained a physical piece of paper with the wire instructions and the account number to send the money to. That way, he avoided the potential trap of bogus emails.

On closing day, he went to his bank in person and requested they wire the money from his account to the title company’s account, per the written instructions. The clerk entered all his information into the computer, a process that took 30+ minutes including verifying his identity and that he was indeed the owner of his account.

At last, she hit send and smiled. “All done!”

He requested a paper copy of the confirmation.

“Oh, you can access it online.”

He insisted on the paper copy.

Good thing.

A half hour later, he called the title company. No, they had NOT received the wire transfer. For the next two hours, he tried to call the bank but couldn’t get through constant busy signals.

Concerned, he returned to the bank. The clerk jumped up to greet him saying, “Oh, I’m so glad you came back! Our computers and phone systems crashed. I had no way to get hold of you because I couldn’t remember your name.”

His wire transfer had NOT gone through. It had vanished in cyberspace.

He spent the next two hours recreating the transaction with the clerk, but her computer kept freezing and wouldn’t accept the transfer. She called the bank fraud department, but was unable to speak with them because calls were repeatedly cut off. What the heck was going on? 

Photo credit: Karolina Grabowska-Pexels

During that same time, other customers came into the bank complaining they couldn’t access their online accounts. More customers wanted to make deposits, but tellers couldn’t give receipts because their computers were down. All banking transactions ground to a halt.

Hmmm.

Later, my relative learned there had been a cyberattack affecting a region from South Carolina to Florida. It had not specifically targeted individual banks but rather was a Denial of Service (DoS) attack. The perpetrators, believed to be located in China, had flooded the net with cyberjunk, overloading the information superhighway. Digital transactions were gridlocked in a virtual traffic jam on a virtual freeway.

Fortunately, my relative had his physical piece of paper, his only proof of the transaction.

The following morning, the wire transfer finally went through and escrow closed.

But what if he had trusted the assurances of the title company and bank? He could have lost significant money. If only the title company had accepted a physical cashiers check, he could have avoided a lot of worry.

Coincidentally, the day after his close call, I happened to overhear a real estate agent talking about a recent sale he’d handled, also in Florida. He’d received an email supposedly from escrow, requesting money be wired a day early. Fortunately, he called to double-check and learned they had not sent the email.

If he had instructed his clients to act on the bogus message, they would have lost their money to fraudsters.

In contrast, according to a retired attorney, California financial institutions do not use wire transfers because of the high likelihood of fraud. Real estate transactions in California are done with cashiers checks. 

Every day, we’re pushed farther into paperless banking. Every day more fraudsters hack accounts or otherwise compromise the security of financial transactions. 

Until the financial world develops better security, whenever possible, I’ll stick with paper checks and physical documentation.

~~~

TKZers: Have you or someone you know been a victim of banking cyberfraud? Was the money recovered?

Does your state handle real estate transactions with wire transfers or cashiers checks? 

~~~

 

Coming soon! DEEP FAKE, a new thriller by Debbie Burke. 

What you see with your own eyes may not be real. 

To be notified when DEEP FAKE is released, sign up HERE. 

 

True Crime Thursday – Pee for Profit

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By Debbie Burke

@burke_writer

 

Did you ever think pee could lead to riches? Me neither.

However, the owners of Northwest Physicians Laboratory (NWPL) of Bellevue, OR, figured out a way that earned them millions of dollars before the feds caught them.

In April, 2022, Richard Reid, 53, of Astoria, OR, was convicted of five federal felonies resulting from his and his co-conspirators’ scheme to receive illegal kickbacks for lab tests on urine specimens.

According to U.S. Attorney Nick Brown, NWPL officers and Reid knew:

“…it was illegal to profit on tests conducted by his toxicology lab that were paid for by government insurance. The web of referrals and kick-backs increased profits for Reid and his co-conspirators, while inflating medical costs for the rest of us. This is essentially theft from taxpayers.”

The Anti-Kickback Statute prohibits physician-owned labs from profiting for services billed to Medicare, Medicaid, and TRICARE. A statement from the Department of Justice says:

“Paying remuneration to medical providers or provider-owned laboratories in exchange for referrals encourages providers to order medically unnecessary services.” 

How did NWPL’s scheme work?

Reid, VP of Sales, and his cohorts steered urine tests to other labs, resulting in payments from Medicare, Medicaid, and TRICARE of more than $6.5 million. Those labs then turned around and shared the ill-gotten gains with NWPL by paying them more than $3.7 million disguised as “marketing services.”

The scheme lasted from 2013 to 2015 until investigators uncovered it. In February, 2021, NWPL pled guilty and was sentenced to pay more than $8 million in restitution. The lab is now out of business.

NWPL’s CEO Jae Lee and Executive Director Kevin Puls pled guilty, along with Steve Verschoor, the head of a lab that paid kickbacks. In July, 2022, the co-conspirators will be sentenced and face up to five years in prison for each count.

Pee for profit sounded like a good idea at the time. After conviction, though, I suspect the conspirators might say, “Aw, p*iss on it!”

~~~

TKZers: Any thoughts on this scheme? Bad jokes welcome.

~~~

 

 

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True Crime Thursday – You Got the Wrong Guy

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By Debbie Burke

@burke_writer

Photo credit: Alex Galloso, Unsplash

We’re all aware of the staggering rise of identity theft that can screw up our credit. According to the Insurance Information Institute, in 2020, the FTC received 4.8 million reports of identity theft and fraud, a 45% increase from 2019.

But if a criminal claims to be you, does that mean you could be locked up for an outstanding warrant?

In the case of Jonah Scott Miller, yes.

When Zin Mali McDade, a transient, was arrested in Brevard County, Florida, he claimed his name was Jonah Scott Miller, who had been a childhood acquaintance. Both were born in December, 1985, six days apart. However, Jonah is 6’2” and Zin is 5’7”.

The real Jonah, who works security for a hospital, was arrested during Bike Week in Daytona Beach in 2019 on a failure to appear warrant for shoplifting, a warrant actually meant for Zin.

When Jonah told police they had the wrong man and he had never been to Brevard County, the arresting officer accused him of lying. According to the Daytona Beach News-Journal, she said:

“I suggest you get a lawyer because somebody’s lying. If it’s not you lying to me, it’s somebody you know because they know way too much about you. They knew your date of birth, your social, where you were born, your address and they have your tattoos.”

Jonah protested his tattoos couldn’t match anyone else’s because they were the names of his kids.

Apparently, no one at the scene brought up the mugshot from Zin’s arrest.

Jonah was booked into Volusia County Jail. There, officers discovered the mugshot on file didn’t match the real Jonah. The fingerprints on record also didn’t match the real Jonah. Yet, despite the obvious mistake, the innocent victim of identity theft spent the night in jail.

Attorney Steve Weisman of Scamicide.com recommends being proactive if someone impersonates you. Contact a lawyer, law enforcement, and the prosecutor/district attorney to file a report that you are the victim of identity theft. Show your driver’s license, passport, or other photo ID to prove who you are. Request a letter from the district attorney explaining the situation. In some states, you can request an Identity Theft Passport that may help if you are detained because a criminal steals your identity.

Booking photo of Zin Mali McDade

 

Whatever happened to Zin Mali McDade (alias Jonah Scott Miller)? He currently resides at the Brevard County Jail in Cocoa, FL.

~~~

TKZers: Have you ever been the victim of mistaken or stolen identity? Would you obtain an Identity Theft Passport?

True Crime Thursday – Follow the Money

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by Debbie Burke

@burke_writer

Photo credit: Jake Blucker – Unsplash

When Alvin Schottenstein died in 1984, employees of Schottenstein Department Stores wept, describing their boss as kind and compassionate. Alvin and his brothers had built the Columbus, OH retail business, started by his father in 1917, into a multi-billion-dollar conglomerate.

Alvin was well known as a dedicated family man who said: “The time I get to spend with my grandchildren is the greatest time of my life.” (7/8/84 Columbus Dispatch article)

Almost four decades later, Alvin’s widow Beverley, now 94, sued two of those grandsons, Evan and Avi Schottenstein, along with J.P. Morgan Securities, in an elder fraud case. Her claims included financial fraud, abuse of fiduciary duty, and fraudulent misrepresentations and omissions.

Beverley is the matriarch of the Scottenstein empire whose holdings include American Eagle Outfitters, American Signature Furniture, DSW, and others. In 2015, the Schottenstein family was named #100 of the richest families in America by Forbes.

But…money does not guarantee happiness.

In 2014, Beverley’s grandsons Evan and Avi were employed by J.P. Morgan as brokers. During their five-year tenure handling her account, they made hundreds of stock trades, reportedly earning millions in commissions. But, despite Beverley’s many requests for information, they refused to tell her details of the transactions, stating only that they were doing well for her.

According to Bloomberg News, while the grandsons were supposedly growing her investments, Evan would challenge Beverley over charges she made with her own credit cards, which he evidently monitored. He criticized her for patronizing a non-Kosher restaurant and scolded her for watching TV on Shabbat.

Beverley’s son (Evan and Ari’s father) lives a few floors below Beverley in the same condominium building in Bal Harbour, FL, putting the grandsons in convenient proximity to her.

Evan reportedly entered Beverley’s home unannounced and shredded documents relating to J.P. Morgan. Charges appeared on her credit card statements that Beverley had not made. Her seven-million-dollar diamond engagement ring disappeared from a safe deposit box to which one grandson had a key. A check to her caregiver bounced because the bank had frozen her account.

What happened to the money her grandsons were handling for her?  

After several years of suspicions and unanswered questions, Beverley insisted they had to consult her before making trades on her account. Her banking, credit card, and stock statements from J.P. Morgan mysteriously stopped being mailed to her.

Despite a phone conversation with J.P. Morgan Chase CEO Jamie Dimon, Beverley’s requests for reports and proper accounting were ignored.

In 2019, she’d had enough and consulted a lawyer. After an audit of her finances, an accountant concluded: “It appears that Ms. Schottenstein’s broker sold her these risky, illiquid products without regard for her financial wellbeing to generate extraordinary income for him and for his employer.” 

The unauthorized buying and selling of securities amounted to more than $400 million.

Assisted by her granddaughter Cathy Schottenstein (cousin to Evan and Avi), Beverley sought help from FINRA (Financial Industry Regulatory Authority) because “retail investors can’t take their brokers to court.” (Source: NextAvenue.org)

Shortly before the case was filed in 2019, J.P. Morgan terminated Evan and Avi. According to the FINRA letter of acceptance, waiver, and consent, Evan Schottenstein was “[d]ischarged” and provided a termination explanation stating, “[c]oncerns relating to trading activity for the account of a family member, and the accuracy of the records regarding the same.”

After arbitration, in February 2021, FINRA found J.P. Morgan and Evan liable for elder abuse according to Florida statutes.

FINRA awarded Beverley $19 million, ordering “J.P. Morgan to pay $8.9 million, Evan Schottenstein to pay $9 million as the chief beneficiary of the scheme, and Avi Schottenstein to pay $620,000. They were also ordered to pay legal fees and Finra hearing costs.” (Source: fa-mag.com)

Beverley’s granddaughter Cathy Schottenstein has written a soon-to-be-published memoir entitled Twisted, chronicling her grandmother’s ordeal.

This determined nonagenarian didn’t allow herself to be victimized by her own flesh and blood and refused to give up against one of America’s largest banks.

Beverley followed the money. Unfortunately it led to the discovery of family betrayal that would have devastated Alvin Schottenstein, Evan’s and Avi’s doting grandfather.

~~~

Thanks to Ann Minnett for alerting me to this case.

~~~

 

 

A glamorous predator zeros in on an aging millionaire until investigator Tawny Lindholm interferes. Then elder fraud turns deadly in Debbie Burke’s thriller, Stalking Midas. 

Buy links: Amazon     Major online booksellers

True Crime Thursday – Motorized Surfboard Fraud

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Photo credit: Brent Storm – Unsplash

By Debbie Burke

@burke_writer

 

Cowabunga! was a popular exclamation by surfers in the 1960s. An earlier iteration, kawabunga, was coined on “The Howdy-Doody Show” in the 1950s. In the 1990s, the Ninja Turtles revived cowabunga’s popularity.

In 2016, Roberto Clark, 50, of Palm Bay, Florida, had a concept for motorized surfboards he called “Jetboards” that apparently caused some investors to holler “Cowabunga!”

Between 2016 and 2019, Clark convinced people he met in bars, restaurants, and adult entertainment establishments in Virginia, Maryland, and D.C. to invest in his company, KRM Services. KRM was supposed to manufacture Jetboards to be sold at big profits to cruise lines and water sports companies. Clark had a patent, purchase orders, and signed, notarized contracts to prove substantial buyer interest. He collected more than $350,000 from 14 investors.

Only one problem: he never manufactured any Jetboards.

The patent, purchase orders, and buyer contracts were falsified.

Investors’ money went, not to build Jetboards, but to finance Clark’s luxurious lifestyle. According to court filings by the U.S. Securities and Exchange Commission, he spent: “at least $41,000 to restaurants and bars; at least $19,000 to hotels; at least $15,000 to family members; at least $8,000 to department and clothing stores; at least $5,000 to convenience and gas stores; at least $3,000 to grocery and liquor stores; at least $1,000 to gyms; at least $1,500 to spas and beauty salons; at least $1,000 to pet stores and groomers; and at least $200 to a bail bondsman.”

That last expense might have been incurred in March, 2018, when the Fairfax County Police Department arrested Clark.

Yet he brazenly continued to solicit more investors as late as 2019. When suspicious victims demanded return of their money, Clark paid some of them…with checks that bounced.

Photo credit: Kurt Anderson – Unsplash

The Jetboard scam wiped out once and for all in January, 2021, when Clark was found guilty of multiple charges including securities fraud. He was sentenced to six years in prison and fined $400,000.

Here’s hoping his victims were compensated and hollered, “Cowabunga!”

~~~

No TKZer would ever invest in a company whose owner they met in a bar or adult establishment, right? Do you know anyone who has?

~~~

 

 

 

If you invest in Debbie Burke’s new thriller Flight to Forever, she absolutely guarantees she will yell: “Cowabunga!” Please check it out at this link.