Internet Fraud Casebook E-Book

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 762

Veröffentlichungsjahr: 2010

Beschreibung

Real case studies on Internet fraud written by real fraud examiners Internet Fraud Casebook: The World Wide Web of Deceit is a one-of-a-kind collection of actual cases written by the fraud examiners who investigated them. These stories were hand-selected from hundreds of submissions and together form a comprehensive, enlightening and entertaining picture of the many types of Internet fraud in varied industries throughout the world. * Each case outlines how the fraud was engineered, how it was investigated, and how perpetrators were brought to justice * Topics included are phishing, on-line auction fraud, security breaches, counterfeiting, and others * Other titles by Wells: Fraud Casebook, Principles of Fraud Examination, and Computer Fraud Casebook This book reveals the dangers of Internet fraud and the measures that can be taken to prevent it from happening in the first place.

Leseprobe

Table of Contents

Title Page

Copyright Page

Dedication

Preface

Internet Fraud Tree

CHAPTER 1 - Phantom Figurines

A House Divided

Internet Auction Figures

Vanishing Act

Mounting Complaints

Modeling a Case

Bid Winner

Proving a Negative

The Witnesses

Restitution and Bankruptcy

About the Author

CHAPTER 2 - From Russia with Love?

More Than a Name Change

The Captain

Hook, Line and Sinker

The Honeymoon Is Over

Two Is Better Than One

A Revealing History

Annulment and Deportation

About the Author

CHAPTER 3 - Behind a Smoke Screen

Shin Tao

The Gathering Storm

New Challenges

Redemption and Raids

About the Author

CHAPTER 4 - Cars, Cards, Chemicals and Crayons

The Benefits of Early Morning Banking

Following an Online Trail

The Credit Card Lifter

Insanity and Bulls**t

The Jig Is Up

Felonies, Felonies and Felonies

Sentencing

About the Author

CHAPTER 5 - Small-Town Boys

Thrown Together by Fate

A Ruined Cup of Coffee

Making the Right Connections

Gone Phishing

Coming out of Their Shell

About the Author

CHAPTER 6 - Dangerous Diet

Local Market

The Beauty Queen

The Same Defense Twice?

About the Author

CHAPTER 7 - The Suburban Spoofer

The Survivor

An Unexpected Move

A Checkered Past

Repeat Victim

Special Delivery

The Flood Gates Opened

About the Author

CHAPTER 8 - Don’t Mess with Texas

Abuse of Power

The Handover

Mysterious Payments

Security Breaches

Deceptively Simple

God’s Plan?

The Bank Records

The Final Tally

Lack of Remorse

About the Author

CHAPTER 9 - Hot Wire

Onward and Upward

Night Watch

Information Deployment

Trip Wire

Mission Accomplished

About the Author

CHAPTER 10 - A Business within a Business

Surfing on the Job

Failed Controls

Covering the Bases

Across the Table

Good Behavior

About the Author

CHAPTER 11 - Double Play

Free Lunch for Fraudsters?

The Investigator Became the Victim

The Tables Were Turned

Double Agent

Sweet Relief

About the Author

CHAPTER 12 - The eBay-Fraud Brothers

Entrepreneurial Spirit

FBI Tip

Caught on Tape

Two for One

About the Author

CHAPTER 13 - Not-So-Precious Metals

The Deal

Welcome to the Family

Compliance Check?

Deepening Relationship

All That Glitters Is Not Gold

The Investigation

The Jig Is Up

Falling through the Cracks

About the Author

CHAPTER 14 - The Cool-Cash Syndicate

Phishing

Card Cloning

Extrapolation

Saving for a Home

Can I Get Your Number?

Falling Like Dominoes

The Syndicate Dissolves

About the Author

CHAPTER 15 - Dastardly Design

Perfect Fit?

Lunchtime Alarm

Calling in the Big Guns

You Can’t Hide

Gee, Look at This Gmail!

About the Author

CHAPTER 16 - The Reckless Clerk

WestBank Conflict

Roots of the Problem

Sounding the Alarm

If at First You Don’t Succeed . . .

A Lazy Caller

Catching the Rat

About the Author

CHAPTER 17 - Close Quarters

Polar Opposites

A Disturbing Claim

Long-Distance Sleuthing

Role Reversal?

A Fruitful Harvest

Photo Finish

About the Author

CHAPTER 18 - Playing with Fire

Community-Based Fraudsters

High-Profile Victims

Getting Our Hands Dirty

The Ultimate Betrayal

About the Author

CHAPTER 19 - Hack, Pump and Dump

The Perfect Storm

China Gold

Empty Nest Egg

A Fad or a Ring?

Timing Is Everything

The Monster Strikes Back

A Multi-Headed Hydra

Where Is the Head?

About the Author

CHAPTER 20 - Dangerous Learning Curve

Introducing Internet Banking

Control Lapse

Follow the Money

A Slap on the Wrist Gone Awry

About the Author

CHAPTER 21 - The Sherwood Boys

An International Assembly

The Tentacles Start to Spread

On the Case

Shell Companies

High-Tech Organization

Offshore Banking

The Search Continues

About the Author

CHAPTER 22 - The Broken Nest Egg

International Cast of Characters

A Victim’s Shame

Escalating Transfers

Reinforced Partnership

Mounting Fees

An Unsatisfactory End

About the Author

CHAPTER 23 - One More Lap to Go

Meneo Bank

Billy Lo Needs a Loan?

The Investigation

Under New Management

Phishing for PINs

Prepaid Cards, Politics and Arson

The Outcome of the Investigation

About the Author

CHAPTER 24 - Death and Taxes

The Tax Man Cometh

The Name Game

Code Violations

What’s in a Name?

Family Bond

Have a Cookie

A Rose by Any Other Name . . .

Paying the Piper

About the Author

CHAPTER 25 - Keeping It All in the Family

The Rise of Condor

Double Trouble

Skirting Controls

A Discrete Tip

The Call for Help

Snooping Around

The Confrontation

Enter the CFEs

Like Mother, Like Son

About the Author

CHAPTER 26 - No Security in Online Advance Fees

Formal Introductions

Wide Reach

The Art of Delaying

About the Author

CHAPTER 27 - The G.I. Hacker

A New Beginning

The Mathises

Sabotage

Following the IP Trail

Surveillance and Searches

Angry Intent

About the Author

CHAPTER 28 - The Wrong Suspect

A Call from an Old Friend

The Big Picture

Focusing on the Details

Collaborative Investigation

About the Author

CHAPTER 29 - Dribbling on the Internet

The Disgruntled Investor

Suspicious Web Site

An Australian Diversion

Mounting Pressure

Home Visit

Man-to-Man Chat

Cease and Desist

About the Author

CHAPTER 30 - Behind the Mask

Picture-Perfect Compliance

Occupational Curiosity

Passing of the Torch

Details Emerge

About the Author

CHAPTER 31 - Online Pharmacy

Supply and Demand

TPG’s Clientele

Online Marketplace

Deflecting Blame

The Tip of the Iceberg

Defining the Crime

Sentencing

About the Author

CHAPTER 32 - The Porn Procurement Process

The Air Force Procurement Process

Small Transactions Pack a Big Punch

Refund Request

Establishing Contact

Just Deserts — and Ketchup

About the Author

CHAPTER 33 - Gambling on a Profit

The Wrong Bet

The Tip-Off

Unchecked Manipulation

Bouncing the Accounting Ball

Calling the Bluff

Chasing the Crooks

About the Author

CHAPTER 34 - The Solitaire Trader

Unauthorized Transfer

Not for the First Time

The Enemy Within

Tea for Two

A New Direction

About the Author

CHAPTER 35 - The Big Brother He Never Had

The American Dream

A Window of Opportunity

The Perfect Storm

A Picture Is Worth a Thousand Words

Remittances to the Motherland

Mixed Results

About the Author

CHAPTER 36 - Wanted: Your Money

United Online

The Reports Were Piling Up

A Long-Term Plan

Time Is Running Out

About the Author

CHAPTER 37 - The Business of Making Money

Online Money from Money Online

Not-So-Excellent Technology

The Master Impersonator

Missing Checks and Double-Checks

Boring, Boring, Boring

About the Author

CHAPTER 38 - Failure to Deliver

Sentimental Value

Collecting Complaints

Still No Response

Accepting Responsibility

About the Author

CHAPTER 39 - Cyber Psycho

Flying into Danger

Intimidation and Bullying

Home Invasion

Who’s Crazy Here?

Piecing It Together

Overdue Answers

Where’s the Justice?

About the Author

CHAPTER 40 - Drag Queens and Drugs

High-School Reunion

Equal-Opportunity Fraud

The Investigation

The Low-Tech Side

Closing in on the Suspects

Searching for Clues

The Junkyard Dogs

A Treasure Trove of Evidence

Prosecution

About the Author

CHAPTER 41 - Wire Transfers from Nowhere

The Mathematics of Profit

A Pattern Emerges

A Fortuitous Error

Combining Forces

Early Morning Surprises

The Outcome

About the Authors

Glossary

Index

Copyright © 2010 by Association of Certified Fraud Examiners. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data

Internet fraud casebook : the World Wide Web of deceit / edited by Joseph T. Wells. p. cm.

Includes index.

ISBN 978-0-470-64363-1

1. Internet fraud-Case studies. 2. Computer crimes-Case studies. 3. Computer security-Case studies. I. Wells, Joseph T.

HV6773.I573 2010

364.16’3-dc22 2010013506

To James D. Ratley, my friend and colleague

All profits from the sale of this book go to the ACFE Foundation, which provides scholarships to deserving students. They will become tomorrow’s fraud fighters

Preface

Let me admit one thing up front — I am a computer Neanderthal. As a matter of fact, when I graduated from college nearly four decades ago, these electronic wonders (that now manage nearly every aspect of our lives) had not even found their way into business school curricula.

My, how times have changed. But one thing that has stayed the same is the definition of fraud, which has been a part of our lexicon for eons. Simply put, it is an intentional false statement used to deprive an innocent victim of money or property. What is completely new is how people are now victimized. In other words, it is the same song but with a different verse.

Before the advent of mail, it was usually necessary for the fraudster to deliver a spiel to the potential victim face-to-face. When letters came in to existence, the crook only had to invest in a postage stamp to remotely defraud the victim. Not now. Anyone with a computer can deliver faceless phony pitches to millions of people almost instantaneously over the Internet — at little or no cost. Moreover, without proper security (as if there were really such a thing), thieves can tap into bank accounts, credit cards and most of the world’s cash.

Although former U.S. Vice President Al Gore has taken great pains to discredit the rumor, many people actually still believe that he “invented” the Internet. The truth is that it began in 1969 as an experiment between the University of California at Los Angeles and Stanford Research International. In 1974, the term Internet was used for the first time. But the network didn’t really take hold until 1988 — when it was opened to commercial interests. By now, nearly 2 billion computers are connected worldwide, a number that continues to grow rapidly.

There are few inventions in history that have brought so much benefit to mankind. Conversely, the Internet is increasingly being used for evil. Cyber attacks in various forms are now commonplace. We’ve listed the typical schemes in the front of this book with a graphic we have dubbed the “Internet Fraud Tree.” A glossary of computer-related terms is also included at the end of the book.

No good data exists on the number of Internet crimes but according to most experts, they are growing in number and sophistication. And as with other criminal activity, efforts to control Internet fraud always seem to lag behind; crooks try hard to be ahead of the game.

This is not unique to Internet crimes. Airport security gained importance after repeated attempts were made by terrorists to hijack and/or destroy planes and passengers. Physical screening became the norm but it was not (and is not) foolproof. Richard Reid, the so-called “shoe bomber,” was one step above — pun intended — prevention measures of the time when he walked aboard an airplane with explosives concealed in the heel of his shoe. Now, every man, woman and child must remove their shoes to have them x-rayed before boarding a commercial aircraft. And then came the “underwear bomber,” who unsuccessfully attempted to blow up a plane. This serves to illustrate that those who are determined to commit crimes will likely try to find a method that works.

With Internet fraud prevention, there isn’t (and likely won’t be) nirvana. Just as soon as the good guys think they’ve developed the perfect solution, the bad guys will prove them wrong. That leaves us with learning from the past so we will recognize the Internet fraud scams that have occurred and take appropriate measures. Put another way, education is the best fraud prevention tool.

As you will see in the following pages, Internet fraud is not committed by electronic machines but rather by the people using them. However, computers are a vital aspect of the miscreants’ schemes and our efforts to catch them. If we are able to identify who is behind the keyboard, bringing them to justice most frequently involves traditional investigative methods — victim and witness interviews, methodically gathering evidence, undercover operations and confrontation of the suspect.

This is the arena where I am not a Neanderthal. For those of you who may not have kept track, I am entering my fourth decade in the anti-fraud field. I’ve conducted thousands of investigations. And although each has been different, they are also much the same in the approach to solve them.

First, an allegation is made. It is then evaluated to see if the facts, if they are proven, would constitute fraud. Assuming so, there begins the methodical process of gathering the evidence. In almost all situations, the documentary proof is gathered first. Next the investigation moves in a manner similar to rings on a tree trunk, beginning on the outside with interviewing witnesses who are the least culpable and working inward, toward the suspect or suspects.

People with limited experience in conducting investigations are likely to skip directly from the initial allegation to a confrontation with the suspect (s), omitting the crucial middle steps. The problem with this approach should be obvious: With no evidence to prove otherwise, the fraudster is likely to deny involvement. The pinnacle of an investigation is to conclude with a legally binding admission of guilt. Although many cases are made in court without a confession, getting one is the goal.

In this book, you will see many and varied examples of how Internet fraud is uncovered and investigated. Most cases were resolved, but not every one. Some fraudsters confessed; others stonewalled. Many were convicted while some escaped justice. Of those adjudged guilty, punishment was adequate for some; others received a slap on the wrist. But that is the lot of the criminal justice system — you can’t win ’em all.

The cases to follow were written by members of the Association of Certified Fraud Examiners, the world’s largest anti-fraud organization. These authors are in the trenches every day across the globe fighting fraud in an uphill battle. Were it not for them, the climb would be even steeper. The stories you will read were carefully selected. To protect privacy, key names have been changed.

Thanks first goes to those who have given of themselves and their time to provide these compelling stories for Internet Fraud Casebook: The World Wide Web of Deceit. Ms. Laura Hymes of the ACFE research staff deserves special recognition for her job as the book’s project manager and for her superb editing skills. Were it not for Ms. Hymes, it is unlikely this work would be in print. Thanks also go to John Gill, head of the research department and to Ms. Andi McNeal, his second-in-command. And I’d be remiss if I didn’t thank personally Jeanette LeVie, my trusty assistant of 19 years, who has been indispensible to me; and to James D. Ratley, the ACFE’s president and my friend of a quarter-century.

If you investigate Internet fraud, are responsible for its early detection or prevention, if you educate others or if you simply have an interest in this fascinating topic, you will find much valuable information between these covers. Although I don’t have a crystal ball, I’m going to make an almost sure-fire prediction. As use of the Internet grows, so will the problem of fraud.

Joseph T. Wells, CFE, CPA Founder and Chairman Association of Certified Fraud Examiners Austin, Texas, USA April, 2010

Internet Fraud Tree

CHAPTER1

Phantom Figurines

JOHN OUELLET

She was a widow with three grown sons. Her late husband left her with a he was a widow with three grown sons. Her late husband left her with a tidy inheritance that would have been sufficient for most women, but not for Eleanor Wallace; she was far too motivated and independent. At a mere 63 years old, she wanted more from life than idle contentment.

He was unhappily married and living on the western side of Michigan, some 200 miles from Eleanor. Like Eleanor, Roland Granger was not one to let life pass by without noticing him. He was two years younger than her, with a head for business and an eye for women.

Eleanor was refined; Roland was brash. She was tall and slender; he was compact with a burgeoning belly. She took great pride in her appearance and kept her hair smartly colored and coiffed. He was gray, balding and often disheveled. She chose her clothing carefully, for appearance and fit, while he kept the appearance of a weekend golfer in mid-July on the 18th green. In a bit of a character turnabout, it was Eleanor who preferred the informal “Ellie.” He insisted on “Roland” for its formality, because most nicknames lacked respectability, and others he thought were just plain silly.

They met at an antique show. He was a seasoned pro, having been in the business with his wife for several years, and Ellie was still green. She used the money left to her by her late husband to start up her own business. Her sons warned her against such a venture. After all, she was getting on in years and had no experience — better to hand it over to an investor and live on the dividends. But Ellie had more trust in her own instincts than those of a stranger.

Ellie Wallace’s business was really more of a consignment shop. She took in trinkets and gadgets, knickknacks and doodads. Those items she liberally called antiques had no place among Roland Granger’s genuine artifacts.

Roland was smooth. His glib ways made it easy for him to sell and for folks to buy. He knew his merchandise and priced it right. Anyone near his booth was a buyer — or so he reasoned. They just didn’t know it until they heard his pitch. But he wasn’t condescending. He didn’t argue, tussle or mortify. Most of those who waved him off often returned later for small talk and perhaps a purchase or two.

Ellie was impressed. She was a more striking figure than Roland, but she was stiff and uncomfortable in the role of salesperson. She had little confidence in her business acumen and none in her products. During a respite in his day, Roland challenged himself: “See that piece you’ve got?” he asked Ellie, pointing to a costume brooch. “I’ll sell it for a glass of wine with you after the show.” He took it back to his booth and returned an hour later with $45.