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Online Scams You Need to Avoid Today

Today with modernization and lifestyle evolution, new forms of convenience and speed appear in our everyday actions, but the forms of theft and deception evolve in different forms.

We truly want to believe that the Internet is a safe place where you can’t fall for all types of online scams, but it’s always good reminder to do a “reality check”. We, humans, can become an easy target for malicious actors who want to steal our most valuable personal data.

Criminal minds can reach these days further than before, into our private lives, our homes and work offices. And there is little we can do about it. Attack tactics and tools vary from traditional attack vectors, which use malicious software and vulnerabilities present in almost all the programs and apps (even in the popular Windows operating systems), to ingenious phishing scams deployed from unexpected regions of the world, where justice can’t easily reach out to catch the eventual perpetrators.

According to a report from the Federal Trade Commission (FTC), Millenials are particularly more vulnerable to online scams than seniors, as shocking as it may seem. The research finds that “40 percent of adults age 20-29 who have reported fraud ended up losing money in a fraud case”.

Source: Federal Trade Commision

For this reason, we need to know what are the most popular techniques malicious actors are using to get unauthorized access to our private information and financial data.

We must not forget their final target is always our money and there is nothing they won’t do to accomplish their mission.

Use the links below to quickly navigate the list of online scams you need to stay away from right now.

Phishing email scams
The Nigerian scam
Greeting card scams
Bank loan or credit card scam
Lottery scam
Hitman scam
Romance scams
Fake antivirus software
Facebook impersonation scam (hijacked profile scam)
Make money fast scams (Economic scams)
Travel scams
Bitcoin scams
Fake news scam
Fake shopping websites
Loyalty points phishing scam
Job offer scams
SMS Scaming(Smshing)
Overpayment Online Scam
Tech Support Online Scams

1. Phishing email scams

More than one third of all security incidents start with phishing emails or malicious attachments sent to company employees, according to a new report from F-Secure.

Phishing scams continue to evolve and be a significant online threat for both users and organizations that could see their valuable data in the hands of malicious actors.

The effects of phishing attacks can be daunting, so it is essential to stay safe and learn how to detect and prevent these attacks.

Phishing scams are based on communication made via email or on social networks. In many cases, cyber criminals will send users messages/emails by trying to trick them into providing them valuable and sensitive data ( login credentials – from bank account, social network, work account, cloud storage) that can prove to be valuable for them.

Moreover, these emails will seem to come from an official source (like bank institutions or any other financial authority, legitime companies or social networks representatives for users.)

This way, they’ll use social engineering techniques by convincing you to click on a specific (and) malicious link and access a website that looks legit, but it’s actually controlled by them. You will be redirect to a fake login access page that resembles the real website. If you’re not paying attention, you might end up giving your login credentials and other personal information.

We’ve seen many spam email campaigns in which phishing were the main attack vector for malicious criminals used to spread financial and data stealing malware.

In order for their success rate to grow, scammers create a sense of urgency. They’ll tell you a frightening story of how your bank account is under threat and how you really need to access as soon as possible a site where you must insert your credentials in order to confirm your identity or your account.

After you fill in your online banking credentials, cyber criminals use them to breach your real bank account or to sell them on the dark web to other interested parties.

Here’s an example of a sophisticated email scam making the rounds that you should be very careful.

Source: News.com.au

Use this complete guide on how to detect and prevent phishing attacks (filled with screenshots and actionable tips) to better fight these attacks.

2. The Nigerian scam

Probably one of the oldest and most popular Internet scam used mostly by a member of a Nigerian family with wealth to trick different people. It is also known as “Nigerian 419”, and named after the section of Nigeria’s Criminal Code which banned the practice.

A typical Nigerian scam involves an emotional email, letter, text message or social networking message coming from a scammer (which can be an official government member, a businessman or a member of a very wealthy family member – usually a woman) who asks you to give help in retrieving a large sum of money from a bank, paying initially small fees for papers and legal matters. In exchange for your help, they promise you a very large sum of money.

They will be persistent and ask you to pay more and more money for additional services, such as transactions or transfer costs. You’ll even receive papers that are supposed to make you believe that it’s all for real. In the end, you are left broke and without any of the promised money.

Here’s how a Nigerian scam could look like:

Source: MotherJones.com

3. Greeting card scams

Whether it’s Christmas or Easter, we all get all kind of holiday greeting cards in our email inbox that seem to be coming from a friend or someone we care.

Greeting card scams are another old Internet scams used by malicious actors to inject malware and harvest users’ most valuable data.

If you open such an email and click on the card, you usually end up with malicious software that is being downloaded and installed on your operating system. The malware may be an annoying program that will launch pop-ups with ads, unexpected windows all over the screen.

If your system becomes infected with such dangerous malware, you will become one of thebots which are part of a larger network of affected computers. If this happens, your computer will start sending private data and financial information to a fraudulent server controlled by IT criminals.I never thought cyber criminals could be so creative! Check out these online scams to stay away from

CLICK TO TWEET

To keep yourself safe from identity theft and data breach, we recommend using a specialized security program against this type of online threats.

To find out more information about financial malware, read this article. And here’s how you can tell if your computer was infected with malware.

Source: The Beacon Bulletin

4. Bank loan or credit card scam

People can be easily scammed by “too good to be true” bank offers that might guarantee large amounts of money and have already been pre-approved by the bank. If such an incredible pre-approved loan is offered to you, ask yourself:

“How is it possible for a bank to offer you such a large sum of money without even checking and analyzing your financial situation?”

Though it may seem unlikely for people to get trapped by this scam, there’s still a big number of people who lost money by paying the “mandatory” processing fees required by the scammers.

Here are 9 warning signs and sneaky tactics to watch out and avoid becoming a business loan scam.

As regards to credit card scams, a recent report from the Identity Theft Resources Center said that the number of credit and debit card breaches have been on the rise last year. To better safeguard your data and prevent thieves from getting access to your payment card details, consider:

  • Watching your accounts closely and monitor your online transactions;
  • Taking advantage of free consumer protection services;
  • Signing up for free credit monitoring.

Source: ChaffeurDriven.com

5. Lottery scam

This is another classic Internet scam which doesn’t seem to get old. A lottery scam comes as an email message informing you that you won a huge amount of money and, in order to claim your prize or winnings, you need to pay some small fees.

Lucky you, right?! It doesn’t even matter that you don’t recall ever purchasing lottery tickets.

Since it addresses some of our wildest fantasies, such as quitting our jobs and living off the fortune for the rest of our lives, without ever having to work again, our imagination falls prey easily to amazing scenarios someone can only dream of.

But the dream ends as soon as you realize you have been just another scam victim. DO NOT fall for this online scam and have a look at this checklist to see if you are getting scammed.

Source: Ripandscam.com

6. Hitman scam

One of the most frequent Internet scams you can meet online is the “hitman” extortion attempt. Cyber criminals will send you an email threatening to extort money from you. This type of online scam may come in various forms, such as the one threatening that they will kidnap a family member unless a ransom is paid in a time frame provided by the scammers.

To create the appearance of a real danger, the message is filled with details from the victim’s life, collected from an online account, a personal blog or from a social network account.

That’s why it’s not safe to provide any sensitive or personal information about you on social media channels. It might seem like a safe and private place, where you’re only surrounded by friends, but in reality you can never know for sure who’s watching you.

Also,it’s better to be a little bit paranoid and protect all your digital assets like everyone is watching. Here’s how a Hitman scam looks like:

7. Online dating (romance) scams

As the Internet plays an important role in our social lives, with apps like Facebook or Instagram we access everyday, it’s inevitable to use apps to look for love as well.

Online dating apps are very popular these days and they are a great way to meet your future life partners. I have actually an example with a friend of mine who was lucky enough to find her future husband on a dating site.

But not all scenarios have a “happy end” like this one, and you need to be very careful, because you never know who can you meet.

A romance scam usually takes place on social dating networks, like Facebook, or by sending a simple email to the potential target, and affect thousands of victims from all over the world.

The male scammers are often located in West Africa, while the female scammers are mostly from the eastern parts of Europe.

Cyber criminals have abused this scamming method for years by using the online dating services. They improved their approach just by testing the potential victims’ reactions.

According to a research published in the British Journal of Criminology last month, the techniques (and psychological methods) used by scammers in online romance scams are similar with those used in the domestic violence cases.

To avoid becoming a victim of these Internet scams, you need to learn how to better protect yourself.

Knowing that hundreds of women and men from all over the globe are victims of this online scams, we recommend using these security tips for defensive online dating, including warning signs that could help you from becoming an easy target.

I would also recommend reading these real stories and learn from them, so you don’t fall for these online scams:

8. Fake antivirus software

We all saw at least once this message on our screens: “You have been infected! Download antivirus X right now to protect your computer!”

Many of these pop-ups were very well created to look like legitimate messages that you might get from Windows or any other security product.

If you are lucky, there is nothing more than an innocent hoax that will bother you by displaying unwanted pop-ups on your screen while you browse online. In this case, to get rid of the annoying pop-ups, we recommend scanning your system usinga good antivirus product.

If you are not so lucky, your system can end up getting infected with malware, such as a Trojan or a keylogger. This kind of message could also come from one of the most dangerous ransomware threats around, such as CryptoLocker, which is capable of blocking and encrypting your operating system and requesting you a sum of money in exchange for the decryption key.

To avoid this situation, we recommend enhancing your online protection with a specialized security product against financial malware, and complement your traditional antivirus program.

Also, make sure you do not click on pop-up windows that annoyingly warn you’ve been infected with virus. Remember to always apply the existing updates for your software products, and install only legitimate software programs from verified websites.

If you’ve been infected, you can use an antimalware tool such as Malwarebytes to try removing the malware infection or pay attention to these warning signs and learn how to find a doable solution.

Source: Oreganstate.edu

9. Facebook impersonation scam (hijacked profile scam)

Facebook. Everyone is talking about it these days, and the scandal about Cambridge Analytica firm harvesting personal data taken from millions of this social media channel without users’ consent.

It’s still the most popular social media network where everyone is active and use it on a daily basis to keep in touch with friends and colleagues. Unfortunately, it has become also the perfect place for online scammers to find their victims.

Just imagine your account being hacked by a cyber criminal and gaining access to your close friends and family. Nobody wants that!

Since it is so important for your privacy and online security, you should be very careful in protecting your personal online accounts just the way you protect your banking or email account.

Facebook security wise, these tips might help you stay away from these online scams:

  • Do not accept friend requests from people you don’t know
  • Do not share your password with others
  • When log in, use two-factor authentication
  • Avoid connecting to public and free Wi-Fi networks
  • Keep your browser and apps updated
  • Add an additional layer of security and use a proactivecyber security software.

To enhance your online privacy, I recommend reading our full guide on Facebook security and privacy.

10. Make money fast scams (Economic scams)

Cyber criminals will lure you into believing you can make money easy and fast on the internet. They’ll promise you non-existent jobs, including plans and methods of getting rich quickly.

It is a quite simple and effective approach, because it addresses a basic need for money, especially when someone is in a difficult financial situation.

This scamming method is similar to the romance scam mentioned above, where the cyber attackers address the emotional side of victims. The fraudulent posting of non-existent jobs for a variety of positions is part of the online criminals’ arsenal.

Using various job types, such as work-at-home scams, the victim is lured into giving away personal information and financial data with the promise of a well paid job that will bring lots of money in a very short period of time.

Read and apply these ten tips that can help you avoid some of the most common financial scams.

Source: Makerealmoneyonlinefree.com

11. Travel scams

These scams are commonly used during hot summer months or before the short winter vacations, for Christmas or New Year’s Day.

Here’s how it happens: you receive an email containing an amazing offer for an exceptional and hard to refuse destination (usually an exotic place) that expires in a short period of time which you can’t miss. If it sounds too good to be true, it might look like a travel scam, so don’t fall for it!

The problem is that some of these offers actually hide some necessary costs until you pay for the initial offer. Others just take your money without sending you anywhere.

In such cases, we suggest that you study carefully the travel offer and look for hidden costs, such as: airport taxes, tickets that you need to pay to access a local attraction, check if the meals are included or not, other local transportation fees between your airport and the hotel or between the hotel and the main attractions mentioned in the initial offer, etc.

As a general rule, we suggest that you go with the trustworthy, well known travel agencies. You can also check if by paying individually for plane tickets and for accommodation you receive the same results as in the received offer.

If you love to travel, you can easily fall prey to airline scams by simply looking for free airline tickets. Airline scams are some of the most popular travel scams, and we recommend applying these valuable tips.

12. Bitcoin scams

If you (want to) invest in Bitcoin technology, we advise you to be aware of online scams. Digital wallets can be open to hacking and scammers take advantage of this new technology to steal sensitive data.

Bitcoin transactions should be safe, but these five examples of Bitcoin scams show how they happen and how you can lose your money.

The most common online scams to watch out for:

  • Fake Bitcoin exchanges
  • Ponzi schemes
  • Everyday scam attempts
  • Malware

Here’s how you can spot a Bitcoin scam and how to stay safe online.

Source: Express.co.uk

13. Fake news scam

The spread of fake news on the Internet is a danger to all of us, because it has an impact on the way we filter all the information we found and read on social media. It’s a serious problem that should concern our society, mostly for the misleading resources and content found online, making it impossible for people to distinguish between what’s real and what is not.

We recommend accessing/reading only reliable sources of information coming from friends or people you know read regular feeds from trusted sources: bloggers, industry experts, in order to avoid fake news.If it seems too good to be true, it’s most likely a scam. Take a look over these online scams

CLICK TO TWEET

This type of scam could come in the form of a trustworthy website you know and often visit, but being a fake one created by scammers with the main purpose to rip you off. It could be a spoofing attack which is also involved in fake news, and refers to fake websites that might link you to a buy page for a specific product, where you can place an order using your credit card.

To avoid becoming a victim of online scams, you can use tech tools such asFact Check from Google orFacebook’s tool aimed at detecting whether a site is legitimate or not, analyzing its reputation and data.

Cyber security experts believe that these Internet scams represent a threat for both organizations and employees, exposing and infecting their computers with potential malware.

Source: Opportunitychecker.com

14. Fake shopping websites

We all love shopping and it’s easier and more convenient to do it on the Internet with a few clicks. But for your online safety, be cautious about the sites you visit. There are thousands of websites out there that provide false information, and might redirect you to malicious links, giving hackers access to your most valuable data.

If you spot a great online offer which is “too good to be true”, you might be tempting to say “yes” instantly, but you need to learnhow to spot a fake shopping siteso you don’t get scammed.

We strongly recommend reading these online shopping security tips to keep yourself safe from data breaches, phishing attacks or other online threats.

Source: Originalo.de

15. Loyalty points phishing scam

Many websites have a loyalty program to reward their customers for making different purchases, by offering points or coupons. This is subject to another online scam, because cyber criminals can target them and steal your sensitive data. If you think anyone wouldn’t want to access them, think again.

The most common attack is a phishing scam that looks like a real email coming from your loyalty program, but it’s not. Malicious hackers are everywhere, and it takes only one click for malware to be installed on your PC and for hackers to have access to your data.

As it might be difficult to detect these phishing scams, you may find useful this example of acurrent phishing campaign targets holders of Payback couponing cards, as well as some useful tips and tricks to avoid being phished.

Source: G Data Security Blog

16. Job offer scams

Sadly, there are scammers everywhere – even when you are looking for a job – posing as recruiters or employers. They use fake and “attractive” job opportunities to trick people.

It starts with a phone call (or a direct message on LinkedIn) from someone claiming to be a recruiter from a well-known company who saw your CV and saying they are interested in hiring you. Whether you’ve applied or not, the offer might be very appealing, but don’t fall into this trap.

To protect yourself from job offer scams, it’s very important to:

  • Do a thorough research about the company and see what information you can find about it;
  • Check the person who’s been contacted you on social media channels;
  • Ask for many details and references and check them out;
  • Ask your friends or trustworthy people if they know or interacted with the potential employer.

To avoid these types of online job scams, check thisarticle.

Source: Drexel.edu

17. SMS Scaming (Smshing)

Smartphones. You can’t live without them in the era of Internet. They’ve become essential for communication, online shopping, banking or any other online activity.

Needless to say the amount of data we store on our personal devices which make them vulnerable to cyber criminals, always prepared to steal our online identities or empty our bank accounts.

Smishing (using SMS text messages) is a similar technique to phishing, but, instead of sending emails, malicious hackers send text messages to their potential victims.

How this happens? You receive an urgent text message on your smartphone with a link attached saying that it’s from your bank and you need to access it in order to update your bank information, or other online banking information.

Be careful about these SMS you receive and don’t click on suspicious links that could redirect to malicious sites trying to steal your valuable data. These useful tips can help you easily spot these types of online scams.

Source: Malwarebytes Labs

18. Overpayment Online Scam

If you are considering selling different items on specialized online sites, we strongly recommend watching out for overpayment scam.

A typically overpayment online scam like this works by getting the potential victim “to refund” the scammer an extra amount of money because he/she send too much money. The offer will often be quite generous and bigger than the agreed price. The overpay (extra money) is to cover the costs of shipping or certain custom fees.

One such story can unfold right now and can happen to each of you. This happened to one of our Heimdal Security team members. After smiling a bit and seeing the method, we did realize that’s a common online scam and we had to share it with you. Also, we included a few security tips and actionable advice to prevent falling prey to overpayment online scam.

Our colleague posted a sofa for sale on a Danish site called dba.dk which is a sort of a flea market online. After a few days, he received a message from a person claiming to be interested in the item and willing to pay more than the price offered, via PayPal account.

Here’s how a scam email looks like in which the malicious person asks for personal information to transfer the money.

Also, here’s the confirmation email coming from the scammer which shows that he paid an extra amount for the sofa, including extra shipping fees and MoneyGram charges the extra fee for transportation.

After that, he also got another email saying that he needs to refund the extra amount of money, including the shipping and transportation charges to a certain shipping agent via MoneyGram transfer.

Here’s how the phishing email looks like that you should be very careful and don’t fall for it:

Follow these security tips to protect yourself from overpayment online scam:

  • If you notice a suspicious email coming from untrusted source or something out of ordinary, you should report it as soon as possible.
  • If you receive a similar email like the one our colleague got, do not transfer extra money to someone you don’t know, especially if he/she wants to overpay. A legitimate buyer won’t do that.
  • Also, do not transfer money to a fake shipping company or some private shipping agent, because it’s part of scam and you need to be very careful.
  • Do not provide personal information to people who don’t show a genuine interest in buying your item.
  • Do not send the product to the buyer until the payment was completed and received in your bank account.

19. Tech Support Online Scams

Here’s another online scam that is common and you need to be extra careful. The next time your smartphone rings and you don’t know the number, think twice before answering. Maybe it’s not your friend on the other end of the phone, maybe it’s the scammer!

According to a recent report “nearly half of all cellphone calls next year will come from scammers”, so we need to learn how to better detect and prevent such malicious actions coming from skilled persons.

Tech support scams are very common and widespread these days. Scammers use various social engineering techniques to trick potential victims into giving their sensitive information. Even worst, they try to convince potential victims to pay for unnecessary technical support services.

These tech “experts” pretend to know everything about your computer, how it got hacked and many other details that help them gain your trust and convince victims to fall prey for their scams.

A scenario like this can happen as we write this, and one of our Heimdal Security team members recently got a phone scam call. While we got amused by the conversation he had with the person pretending to work for an Indian tech support company, we realized it can happen to anyone which can become an easy target.

What happened?

The person, pretending to be the representative of a software company and experienced one, is informing our colleague that his computer got hacked by cybercriminals, and offers to guide him and solve this urgent problem.

With poor English skills, he gives details about the serial number of the computer, and provide guidance to access the unique computer ID, trying to misrepresent normal system as having serious issues. After a few minutes, the call is transferred to another tech representative who informs our colleague that they detected unusual activity going through his computer. He’s been told that multiple attempts have been seen on the PC in which hackers tried to get unauthorized access to his computer.

Our colleague detected this as being scam and didn’t go along with it, but for someone without technical knowledge, it may not be so easy to spot.

If someone else would have fallen prey for this online scam, things would have gone even further. The so-called tech scammers could persuade the potential victim to give them remote access to the system. To “help” the victim, scammers mention about additional software that are required to be installed and victims need to pay for these software victims, hence, provide credit card details. You can find out more info here

How to avoid getting scammed by tech support “specialists”

To avoid becoming an easy target of these sneaky tech support scammers, we strongly recommend following these basic rules:

  • Do not trust phone calls coming from people pretending to come from tech “experts”, especially if they are requesting for personal or financial information;
  • DO NOT PROVIDE sensitive data to them or purchase any software services scammers may suggest you as a solution to fix your tech problem.
  • DO NOT allow strangers to remotely access your computer and potentially install malicious software;
  • Make sure you download software apps and services only from official vendor sites;
  • Don’t take it for granted when a stranger calls you out of the blue, pretending to have a technical solution for your issues. Make sure you ask for proof of their identity and do a quick research about the company they are calling you from;
  • Always have an antivirus program installed on your computer, and for more protection, consider adding multiple layers of security with a proactive security solution, which will stop any type of online threats.
  • Have a security-first mindset and be suspicious about everything around you. Also, consider investing in education and learn as much as possible about cyber security. Here’s how you can reduce spam phone calls.

 Conclusion

Since some scams are so well organized and really convincing, and people behind them so difficult to catch, we need to always keep our guard up. Stay informed about the latest scamming strategies.

You can read more:

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Elder Justice: Communities Are Focusing on The Abuse, Fraud, Neglect, and Schemes Perpetrated Against Older Individuals

Elder Justice

Message from U.S. Attorney Ron Parsons for World Elder Abuse Awareness Day

June 15, 2018, is World Elder Abuse Awareness Day.  Communities around the world are focusing on the abuse, fraud, neglect, and schemes perpetrated against older individuals.  As South Dakota’s United States Attorney, I take very seriously the role of our office in protecting older South Dakotans.

In 2017, Congress passed the Elder Abuse Prevention and Prosecution Act.  Among other things, this law enabled the Attorney General of the United States to allocate resources to federal investigations and prosecutions of crimes against older Americans.

In the District of South Dakota, I have designated Kevin Koliner, an experienced prosecutor, to serve as my office’s Elder Justice Coordinator.  Kevin is responsible for prosecuting elder abuse cases, coordinating with state and tribal partners, and conducting public outreach and awareness activities relating to elder abuse.  On a national level, the Department of Justice has convened a large working group to ensure that federal law enforcement stays ahead of the criminals, with access to current trends and information necessary to fulfill our duty of protecting older Americans.

Our focused efforts have already seen results.  Here in South Dakota, our office has prosecuted a large-scale wire fraud case in which an older South Dakotan was targeted in a scam that involved gaining access to his investment account, then forging check requests to deplete the funds.  In a separate case involving thousands of elderly victims, three co-defendants were recently sentenced to considerable time in federal prison after a decades-long scheme in which they peddled a supposed cure-all medical device, enticing vulnerable customers with false claims of scientific studies.

My office is also proud to partner with state and tribal law enforcement on these issues, working together to determine the best forum for ensuring justice for victims of these crimes.  For instance, some matters are best pursued federally because they involve fraud on federal programs or they require interstate or international investigations.  Other elder abuse cases might be best pursued by state authorities, perhaps if they are more local in nature, such as crimes perpetrated by direct caregivers or family members.

This partnership model has been a great success.  Nationwide, the Department of Justice in partnerships between U.S. Attorneys, federal, state, and tribal law enforcement agencies, state attorney generals, and state prosecutors have over the past year brought elder abuse cases involving over 250 defendants, $600 million in victim losses, and involving over one million victims from every state.

As we mark World Elder Abuse Awareness Day, I want to share with you some practical advice regarding warning signs of potential elder abuse.

Examples of financial exploitation include:

  • Use of ATM or credit cards without permission
  • Forging signatures on checks or important documents
  • Requests to older adults for money to cover “emergency” expenses
  • Pressure to grant power of attorney rights
  • Unauthorized sales, such as family heirlooms

Signs that your loved one might be a victim of financial exploitation:

  • Sudden changes in banking practices
  • Being accompanied to important appointments by unknown person
  • Adding new names on bank signature cards
  • Sudden changes in wills or other important documents
  • Unexplained disappearance of funds or possessions
  • Substandard personal care
  • Unpaid bills when financials resources should be adequate
  • Sudden appearance of previously uninvolved relatives

Steps to protect yourself:

  • Check financial statements regularly (at least monthly)
  • Store important documents in a locked drawer
  • Talk to your bank about age-friendly banking options
  • Contact an attorney with any legal questions, and be assured you understand their advice before proceeding
  • Visit ftc.gov every year to get free credit reports, then review those reports thoroughly

For more information about the Department of Justice’s efforts to prevent and combat elder abuse, please visit the Elder Justice Website at elderjustice.gov.  There is also a victim connect hotline, 1-855-4VICTIM (1-855-484-2846), where you can receive service referrals by senior services specialists.  Finally, if you believe you or your loved one is a victim of physical or sexual abuse, do not hesitate to contact local police immediately.

Original PressReleases…

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Financial Fraud: ANNE AROSTE Indicted on Federal Fraud And Identity Theft

Financial Fraud

Claims Specialist at Social Security Administration Arrested on Fraud and Identity Theft Charges for Allegedly Misappropriating at Least $680,000 in Fraudulent Benefits

CHICAGO — A claims specialist for the U.S. Social Security Administration has been indicted on federal fraud and identity theft charges for allegedly approving and pocketing at least $680,000 in fraudulent benefits.

ANNE AROSTE, also known as “Ann Aroste,” worked as a claims specialist at the SSA’s field office in Aurora. Aroste was responsible for processing applications for Social Security benefits via the agency’s electronic records system. According to the indictment, Aroste created fraudulent applications for benefits on the Social Security earnings records of deceased workers. She then used her employee credentials to approve the applications and to route the payments to bank accounts she controlled, the indictment states.

From 2013 to last month, Aroste caused the U.S. Treasury Department to issue at least $680,962, in fraudulent payments, the indictment states.

The indictment charges Aroste, 42, of Montgomery, with five counts of wire fraud and five counts of aggravated identity theft. She was arrested this morning and pleaded not guilty at an afternoon arraignment before U.S. Magistrate Judge Daniel G. Martin. A detention hearing is set for June 13, 2018, at 11:00 a.m., before U.S. District Judge Manish S. Shah.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tracey Thanos, Special Agent-in-Charge of the Social Security Administration’s Office of Inspector General in Chicago; and Benjamin Sides, Special Agent-in-Charge of the U.S. Department of State, Diplomatic Security Service Chicago Field Office.

The indictment describes five instances in which Aroste allegedly caused an application for Social Security benefits to be submitted in the names of individuals whom Aroste falsely claimed had been married to deceased workers. Aroste used her employee credentials to approve the fraudulent applications for survivor’s benefits based on the Social Security earnings of the deceased workers, the indictment states. The Treasury then transmitted the benefit payments into Aroste’s bank accounts.

The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Each count of wire fraud is punishable by up to 20 years in prison, while each count of aggravated identity theft carries a mandatory, consecutive prison sentence of two years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Special Assistant U.S. Attorney Jared C. Jodrey.

Original PressReleases…

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The Fake Check Mystery Shopper Scam Targeting America’s Seniors

An increasing number of seniors are becoming tech-savvy, however, thieves are honing in on this and are using it to their advantage. In 2017, a billion dollars was stolen from the country’s population via fraudulent practices, with online and email fraud costing $200 million. One of the latest scams to hit America’s seniors is the mystery shopper scam, which is putting their finances and their personal identity at risk.

The mystery shopper scam

For seniors needing a bit of spare cash, mystery shopping is the perfect solution as it’s non-taxing, can be done at your leisure and you often get to keep the goods you buy as part of your assignment. That’s exactly what Walli Muhammad thought when he applied for a mystery shopper role and was offered the job. For Muhammad, the role sounded perfect “I thought it was wonderful!” he said, but he became suspicious when he was told to send the money he’d received, via what he now knows to be a fake check, to two individuals in different states. The unwitting senior was being set up as a money mule and had he not have acted on his suspicions, he could have lost a small fortune in the scam.

Fake checks

Muhammad isn’t the only American citizen to have been targeted by this mystery shopper scam either. Earlier this year, 75-year-old Leon Talada was offered the opportunity to become a mystery shopper and, like Muhammad was sent a fake check for almost $4,000. Thankfully, his bank sussed it was fraudulent before it was too late. The scam even date backs to last year as Steve Miller found out when he received a check for more than $2,000. He was asked to cash the check and then purchase cards from a local store and send the numbers to the mystery shopping agency via email. Miller was quick to identify that he was in the midst of a scam and didn’t lose any money, but the impact on seniors who discover the con when it’s too late could be astronomical.

Why mystery shopping?

So why are criminals using mystery shopping scams in a bid to get hold of seniors’ cash? One theory is that because it’s seen as an easy job, more seniors than any other demographic are likely to apply for the role. The older generation is much more used to dealing in checks than millennials, so, for them, it’s not an unusual method of receiving cash. Seniors tend to be the more trusting members of society and many won’t have any concerns about undertaking the ‘work’ they’re told to do by the scammers while waiting for their check to clear.

A name change

The perpetrators of these cons have become wise to the fact that their intended victims, including Muhammad, Talada, and Miller have caught onto their scams and so they have upped their game. Instead of advertising for ‘Mystery Shoppers’, unsuspecting applicants are being offered the role of ‘Secret Store Evaluator’. While the name has changed the scam hasn’t and seniors who find themselves being given such a job will still be sent a fake check and instructions to transfer cash or to purchase multiple gift cards and send the details of the cards to the criminals behind the con.

Protecting yourself

Following the scam, Muhammad warned, “I would have been homeless trying to pay back the funds they had stolen from me.” So if you do find yourself in a tricky situation following a fake check mystery shopper scam, you may need to consider your borrowing options to help you get back into the black. However, prevention is key and you should aim to do all you can to protect yourself and your information when online. Should you suspect anything untoward when buying goods online, after receiving an email or when reviewing financial products, put a halt to proceedings immediately, as the seniors in the cases demonstrated above did, and seek professional advice from an anti-fraud organization.

Genuine opportunities

While mystery shopping scams continue to do the rounds, the good news is that there are legitimate companies offering mystery shopping opportunities to the older generation. The solution to finding a genuine one is to look for company reviews and speak to other mystery shoppers on the net to see which ones they recommend. Never use your own money to make a purchase and always wait for a check to clear before completing the assignment you’ve been allocated.

Scammers are constantly looking for new ways to steal cash from the country’s seniors and the latest mystery shopper scam is just one of their latest tricks. So if you’re thinking about becoming a mystery shopper, stay on your guard, ensure any checks you receive are legitimate and never use your own funds, even if instructed to do so.

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Announcement on Tax Charges Committed in This Year 2018 By FBI

Tax Crimes

Tax Crime Does Not Pay

Significant prison sentences have been handed down during the past year

It’s that time of year again: tax season. The Justice Department would like to remind the public during this time of year that evading your tax obligations could end badly, with substantial fines and penalties, and even long prison sentences. Taxpayers are also reminded to be on the lookout for unscrupulous tax return preparers, who seek to inflate refunds by falsifying deductions, among other means. Even if a tax return preparer makes an error on an individual’s tax return, it is still the taxpayer’s responsibility to pay the correct taxes, and that individual may still be responsible for any unpaid taxes, interest, and fines resulting from these crimes.

“Tax returns are signed under the penalties of perjury, and every taxpayer is ultimately responsible for the contents of his or her own return,” cautioned Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “While the vast majority of Americans truthfully report and pay their taxes, unfortunately there are those who seek to cheat the system and take a free ride on the backs of the hard working men and women of this country. The Justice Department is committed to bringing tax evaders and those who falsely prepare tax returns to justice.”

Over the past year, federal prosecutors for the Tax Division and U.S. Attorney’s offices across the country have worked tirelessly with special agents of Internal Revenue Service Criminal Investigation and other law enforcements agencies to investigate and prosecute those who illegally evade their taxes. These enforcement efforts continue year round.

Recent Tax Evasion Prosecutions of Individuals

  • In July 2017, a Watertown, New York, restaurateur was sentenced to 150 months in prison for tax evasion and investment fraud. He engaged in a scheme to evade more than $4 million in taxes and obstruct the IRS.
  • In October 2017, a Grand Junction, Colorado, business owner was sentenced to 88 months in prison for tax evasion and failing to file corporate and individual tax returns. He had not filed a personal tax return since 1992 and had not paid individual income taxes since 1993.
  • In January 2017, a St. Louis, Missouri, tax return preparation business owner was sentenced to 27 months in prison for tax evasion. He underreported his businesses’ gross receipts by over $1.5 million and evaded over $580,000 in tax.
  • In August 2017, a south Florida salesman was sentenced to 12 months and one day in prison for tax evasion. From 2002 to 2015, he earned over $1.5 million in income selling hurricane resistant windows and evaded paying over $350,000 in taxes. Except for the 2007 tax year, he had not filed an income tax return since 2002.

Recent Employment Tax Prosecutions

  • In March 2018, the owners of a Memphis, Tennessee, staffing company, who were husband and wife, were sent to jail for failing to pay over payroll taxes and filing false tax documents. The husband was sentenced to 75 months in prison and his wife was sentenced to one year in prison. They failed to pay over $2.8 million in withholdings and other employment taxes to the IRS and filed false employment tax returns.
  • In October 2017, the owner of a Las Vegas, Nevada, strip club was sentenced to 24 months for evading employment taxes. The former owner of The Crazy Horse Too evaded paying more than $1.7 million in employment taxes.
  • In July 2017, a Potomac, Maryland, doctor and entrepreneur was sentenced to 119 months and 29 days in prison for defrauding his former company’s shareholders and for failing to pay more than $7.5 million in employment taxes.

Recent Prosecutions Involving Offshore Bank Accounts

  • In October 2017, two Tampa, Florida, business executives were sentenced to prison for 54 months and 72 months respectively for their roles in a conspiracy to defraud the United States using an offshore tax shelter scheme. They conspired to create and promote a sham offshore tax shelter strategy marketed to clients.
  • In July 2017, a Fort Myers, Florida, businessman was sentenced to 57 months in prison for conspiring with investment advisors to hide money in offshore bank accounts. He used secret numbered bank accounts and foreign shell companies to hide millions of dollars in order to evade more than $728,000 in U.S. taxes.
  • In October 2017, a Greenwich, Connecticut, resident pleaded guilty to failing to report to the Department of Treasury funds he maintained in foreign bank accounts. He opened accounts at several banks, including Credit Suisse, UBS, Bank Leu, Clariden Leu, and Bank Hofmann. In 2004, the value of his foreign accounts exceeded $28 million. For over a decade, he filed false tax returns, on which he failed to report income from his foreign accounts.

Recent Prosecutions of Attempts to Obstruct the IRS

  • In July 2017, a Loveland, Colorado, businessman and delicatessen owner was sentenced to 24 months in prison for conspiring to file fraudulent claims for tax refunds. He conspired with his return preparer to file three tax returns that claimed more than $1 million in bogus refunds, of which the IRS paid $350,765. He spent the funds on precious metals and coins, a truck, jewelry, luxury travel, and sporting equipment.
  • In November 2017, a Greensboro, North Carolina, resident was sentenced to 37 months in prison for corruptly endeavoring to obstruct the IRS. He filed several fraudulent tax returns with the IRS that included fake income and withholdings, which claimed over $750,000 in fraudulent refunds. He also filed documents with the Guilford County Register of Deeds purporting to renounce his United States citizenship and proclaiming to be a sovereign citizen.
  • In October 2017, a Boynton Beach, Florida, resident was sentenced to 30 months in prison for obstructing the IRS. He filed fraudulent personal tax returns with the IRS that sought more than $5.6 million in fraudulent refunds, of which the IRS paid more than $485,000. He used the funds to purchase a house and multiple vehicles, including a Jaguar and Mercedes Benz.

More information about the Tax Division’s enforcement efforts in these and other areas can be found on the division’s website. The IRS website also has information about how you can blow the whistle on people who fail to pay the tax that they owe.

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Financial Fraud: Louis F. Petrossi Was Convicted On Securities Fraud, Investment Adviser Fraud, And Wire Fraud

Petrossi Falsely Claimed to Investors That Money They Had Invested in Purported Investment Funds

New York Investment Adviser Convicted Of Defrauding Investors

HARRISBURG – Louis F. Petrossi, age 77, the founder and president of the Wealth Research Institute, a purported investment research firm, was convicted yesterday by a federal jury in the Middle District of Pennsylvania, on three counts of securities fraud, investment adviser fraud, and wire fraud for his role in a scheme to defraud investors. The four-day trial was held before Chief United States District Court Judge Christopher C. Conner in Harrisburg.

David J. Freed, United States Attorney for the Middle District of Pennsylvania and Richard P. Donoghue, United States Attorney for the Eastern District of New York, jointly announced the verdict.

The evidence at trial established that Petrossi falsely claimed to investors that money they had invested in purported investment funds, Chadwicke Partners LLC (“Chadwicke Partners”) and Chadwicke Ventures LLC (“Chadwicke Ventures”), would be used to invest in startup companies. Instead, the defendant used the investors’ money to pay for personal expenses and issued fraudulent statements that overstated both the cost and value of the securities held by Chadwicke.

Louis F. Petrossi Was Convicted On Securities Fraud
Financial Fraud: Louis F. Petrossi Was Convicted On Securities Fraud

The evidence also showed that between January 2015 and January 2017, Petrossi solicited more than $1.8 million in investments in Chadwicke Partners from more than 25 investors nationwide including an investor residing in the Middle District of Pennsylvania. Petrossi promoted Chadwicke as providing the opportunity to invest in high-profile startups companies such as Lyft, Inc., Maplebear Inc., Pinterest Inc., Spotify Technology SA, and Palantir Technologies, Inc. among others. Petrossi invested approximately $665,400 in privately held startup companies but used more than $1.1 million in investor funds to pay for personal expenses, including payments to BMW, renovations to his home and to pay his personal legal fees. In or around August 2016, Petrossi sent emails to Chadwicke investors attaching a spreadsheet that contained false and misleading statements about the purchase price and value of the securities held by the Chadwicke funds in order to conceal his misappropriation of investor money.

On May 3, 2016, Petrossi was arrested in Nevada pursuant to an indictment returned by a federal grand jury in the Eastern District of New York for his role in a securities fraud scheme involving the securities of ForceField Energy Inc. Under the terms of Petrossi’s pre-trial release, the defendant was prohibited from employment “directly involving the handling of investors.” Between May 3, 2016 and approximately January 2017, Petrossi continued to engage in the Chadwicke scheme by emailing the August 2016 spreadsheet and soliciting $210,000 in investor funds.

Petrossi faces a maximum of 20 years’ imprisonment on each count of conviction when he is sentenced by Chief Judge Conner of the Middle District of Pennsylvania.

Petrossi was convicted in May 2017 by a federal jury in Brooklyn for his role in the ForceField Energy Inc. market manipulation scheme. He faces a maximum sentence of 20 years’ imprisonment when he is sentenced by United States District Judge Brian M. Cogan of the Eastern District of New York.

Louis F. Petrossi
Louis F. Petrossi

Assistant United States Attorney Mark E. Bini of the Eastern District of New York and Special Assistant United States Attorney John O. Enright of the United States Securities and Exchange Commission’s Enforcement Division prosecuted the case.

The matter was investigated by the United States Securities and Exchange Commission’s Enforcement Division.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

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Marriage Fraud: Jamar Thomas Was Sentenced of Conspiracy to Encourage or Induce an Alien For Private or Commercial Gain to Reside in The United States

Marriage Fraud

Ring Leader Sentenced In Marriage Fraud Scheme

ROCHESTER, N.Y. – Acting U.S. Attorney James P. Kennedy, Jr. announced today that Jamar Thomas, 30, of Rochester, NY, who was convicted of conspiracy to encourage or induce an alien for private or commercial gain to reside in the United States in violation of law, was sentenced to one year in prison by U.S. District Judge David G. Larimer.

Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that in October 2015, Homeland Security Investigations (HSI) received information from a confidential informant regarding an ongoing marriage fraud scheme involving Jamar Thomas and United States citizen (USC) females, based in Rochester.

Subsequent investigation determined that the defendant told a Confidential Informant, who was not a United States citizen, but a native and citizen of Nigeria, that he could arrange fraudulent marriages between non-citizen males and United States citizen females known to him. Thomas said non-citizen males could pay $5,000 to marry his female co¬conspirators in order to gain legal status in the United States.

Between November 2015, and September 2016, the defendant met with undercover federal agents and/or confidential informants in Rochester to discuss their sham marriage. Thomas introduced the undercover agents or confidential informants to his co-conspirators and they provided their name, address, date of birth, and telephone numbers so that the undercover agents or confidential informants could file the necessary immigration forms.

During these meetings, the defendant and the undercover agents or confidential informants discussed specific details of the sham marriage process and the ceremony. On at least two occasions, women working for Thomas got married at a Town Clerk’s Office within the Western District of New York. On one occasion, the defendant was physically present and acted as a “witness” to one such wedding. However, unknown to Thomas, the Town Clerk who performed the ceremonies was actually an undercover law enforcement agent. Following the weddings, false immigration forms were prepared and mailed in support of applications to adjust the citizenship status of the new “spouses.”

On at least one occasion, women working for the defendant accompanied the undercover agent to Buffalo and participated in an immigration interview with United States Citizenship and Immigration Services.

The undercover agents or confidential informants paid money directly to Thomas and his female co-conspirators for their roles in the sham marriages.

Also charged and convicted in this case:

• Khaaliqa Kegler-sentenced to three years probation to include six months home confinement;
• Chimere Brooks-sentenced to two years probation; and
• Nadia Thomas-awaiting sentencing.

“Fittingly, defendant Thomas was sentenced on the same day and in the same federal courthouse in which over 50 individuals participated in a naturalization ceremony during which they became lawful U.S. citizens,” said Acting U.S. Attorney Kennedy. “The folks who participated in that Naturalization ceremony followed the rule of law and, in so doing, demonstrated a basic understanding of and respect for the fundamental idea that in America, with rights come responsibilities. By acting responsibly and following the rules, those individuals commendably walked out of the courthouse that day with all of the rights and privileges that come with citizenship to the United States. These fraudsters, on the other hand, who sought to circumvent the rule of law and essentially to sell the privilege of citizenship to our great Nation to the highest bidder, also left the courthouse with exactly what they deserved—federal criminal convictions and sentences which include terms of probation or imprisonment.”

“Marriage fraud undermines our nation’s legitimate immigration system and creates a potential vulnerability for law-abiding citizens,” said Kevin Kelly, Special Agent-in- Charge of HSI Buffalo. “Anyone who engages in marriage fraud is taking an illegal shortcut to U.S. citizenship. HSI will continue to aggressively investigate this type of criminal activity.”

The convictions in this case are the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, Child Exploitation Unit, under the direction of Special Agent-in-Charge Kevin Kelly.

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Banking Fraud: Ways of Cheating And Stealing Banking

Banking Fraud

As a customer you will be seen as a capacity goal for fraudulent activities. however via arming yourself with statistics and tools you could shield your self from becoming a sufferer of fraud.

Do you know the 4 largest fraud threats you face?

  • digital fraud
  • identity theft
  • credit/debit card fraud
  • cheque fraud.

Credit/Debit Card Fraud

credit score card and debit card fraud is against the law whereby your credit or debit card can be reproduced with a purpose to use the credit score stability to acquire a economic benefit. the advent and/or alteration of a credit/debit card happens whilst the records contained on the magnetic strip is reproduced. this kind of crime is called ‘skimming’.

credit or debit card fraud also can arise whilst your card is lost or stolen and utilized by a 3rd celebration to purchase items with the ones playing cards or to cast off coins from the cards.

credit score or debit playing cards can also be intercepted in transit while being despatched to you. your cards can also be compromised by using a bent merchant who undertakes unauthorised duplicate transactions to your card.

Protect your credit / debit card:

  • memorise your private identity range (pin). do not use the equal pin for all of your cards, and don’t select your beginning date or different easily identifiable numbers that is probably on something else to your wallet.
  • take a look at statements and speak to your credit card issuer without delay in case you see some thing suspicious on your bill. you could assist the corporation discover fraud—and shop your self from paying unauthorised charges.
  • do now not permit your credit card out of your sight at whenever – for instance, at a restaurant – go together with the card.
  • card fraud isn’t applicable in australia handiest – be just as vigilant whilst travelling foreign places, credit card skimming is an global crime.
  • continually sign your card in ink as quickly as you acquire it.
  • hold music of when new and reissued cards must arrive, and speak to the credit score card provider if they don’t come on time.
  • make certain your mailbox is secure, and that simplest you and the postal provider have get right of entry to to it.
  • tear up all credit score card receipts and pre-permitted credit score card offers into small pieces before you throw them away. hold your billing statements in a safe vicinity.
  • when you operate your credit score card on line, ensure you’re using a comfortable internet site. look for a small key or lock symbol at the lowest right of your browser window.
  • never supply your card quantity to strangers or telemarketers who call you at the cellphone. do not provide your card number until you initiated the decision.

Cheque Fraud

What’s cheque fraud?

Cheque fraud is using a cheque to get economic benefit by using:

  • changing the cheque (payee/amount) with out authority
  • theft of legitimate cheques after which altering them
  • duplication or counterfeiting of cheques
  • the usage of false invoices to get legitimate cheques
  • depositing a cheque into a 3rd birthday party account without authority
  • depositing a cheque for charge knowing that insufficient budget are within the account to cover the deposited cheque.

The way to protect yourself from cheque fraud

  • reconcile your debts right away and frequently
  • by no means sign blank cheques, and only sign cheques after all information were finished.
  • restrict the range of signatures to your account to ensure manipulate.
  • ensure that your signature isn’t with documents that can be accessed by the majority.
  • keep all cheques comfy while no longer in use to deter theft.
  • don’t go away any gaps inside the of entirety of the payee call, quantity in phrases and in figures.
  • if cheques are lost or stolen touch anz immediately and ask them to forestall price at the cheque.
  • ensure that any invoices are valid before charge.
  • recollect the usage of electronic means of payment (if possible) for high fee payments.
  • make sure that your mailbox is comfy to shield your inward cheques.

Electronic Fraud

E-mail scams and fake web sites

some of clients from australian economic institutions have been focused with hoax emails. these emails appear like genuine bank emails.

a few emails tell the purchaser that their security info and passwords need to be updated through logging into an authentic searching, however fake website. the reason of these websites is to attain your go browsing details to get admission to your bank debts.

others talk safety messages and suggest you to install software from the e-mail that tests and eliminates viruses. by way of downloading the software you are in reality tricked into downloading a virus.

anz will not send you an email asking for your account details, monetary information, or login details for anz phone banking, anz mobile banking or anz net banking.

Identity Theft

identity robbery is where your personal information are acquired to get some type of economic or other benefit, leaving you the proprietor of that identification regularly in huge debt with a poor credit score history and in a few instances with criminal implications.

your information can be obtained in lots of methods:

  • theft, including theft of mail from your mailbox at home
  • by using going thru your rubbish packing containers
  • telephone, fax and mail scams
  • internet.

the following can be used to anticipate your identification:

  • date of birth
  • utilities bills (telephone, gasoline, water and charges notices)
  • cope with.
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Financial Fraud: Metropolis of London Is Preparing With a New Court Against Cybercrime And Fraud

Financial Fraud

A new state-of-the-art court docket to tackle cyber crime and fraud within the financial sector is to open inside the metropolis of London.

The metropolis of London business enterprise has introduced plans for a new centralised court docket complex with a focus on fraud and cyber crime, in an effort to uphold London’s recognition as an global felony centre publish-Brexit.

Ministers say the courtroom will decorate Britain’s recognition as a rustic where banking and finance is underpinned by way of the guideline of regulation, and help the government tackle the developing risk of laptop crime.

The new 18-courtroom complex is to be located on or around Fleet Street. As well as economic and cyber crime cases, it would also hear other criminal and civil disputes, taking over the work of a clutch of other courts in the City, such as the City of the London Magistrates’ Court and the Mayor’s and City of London Court, which mostly hears tenancy disputes.

The plans are the latest sign that the UK is moving to modernise and expand capacity in order to guard its pre-eminence as an international legal centre. Other countries are attempting to woo businesses seeking legal redress by establishing new courts, some based on English law and hearing cases in English.

The focus on economic crime also reflects the increase in recent years in prosecutions by the Serious Fraud Office as well as the introduction of legislation such as the Criminal Finances Act, which came into force on September 30.

The act creates a new offence of the facilitation of tax evasion and gives Britain’s economic crime fighting agencies new powers to tackle the sources of hidden wealth.

London has become notorious as a haven for money-laundering, with inquiries from overseas authorities investigating the trail of dirty cash flowing to the UK rising to a record level.

The number of cyber attacks on businesses in the UK has also increased dramatically. Last November — and shortly after Tesco Bank was hit by a cyber bank robbery affecting tens of thousands of customer — Amber Rudd, the home secretary, labelled economic crime a national security threat.

The new “state-of-the-art, multi-purpose replacement” complex will not include the Central Criminal Court, commonly known as the Old Bailey. A feasibility study to work out costs and funding sources is expected to complete in early 2018.

No budget has yet been set for the new complex, but reducing the number of expensive court sites in London will have been a factor in the proposal. The nearby Rolls Building, which has 31 courtrooms and opened in 2011, cost £300m.

Critics of the Rolls Building said the money would have been better spent on reversing cuts to legal aid, where there has been a big rise in people having to represent themselves in court

The City of London Corporation said: “The court’s close proximity to some of the world’s leading technology, financial and professional services firms in the Square Mile will enable the judiciary to be at the forefront of tackling criminal activity and resolving disputes. It would also benefit from its position near the Rolls Building, the Royal Courts of Justice, Old Bailey and Inns of Court.”

Dominic Raab, justice minister, said the court would reinforce the City’s “world-leading reputation as the number one place to do business and resolve disputes” and called it “a terrific advert for post-Brexit Britain”.

Britain’s judges have moved to counter the perception that by leaving the EU Britain will lose ground to other jurisdictions. In July, Lord Neuberger, the former president of the Supreme Court, said Brexit “does not alter the fact that lawyers and judges in the UK are as internationally minded and expert as they ever have been”.

Cyber crime | Most common UK online offences

These are the ten most common cyber-crimes in the UK, with number of cases reported in the year to June 2016

1. Bank account fraud – 2,356,000

Criminals trick their way to get account details. For example: “Phishing” emails contain links or attachments that either take you to a website that looks like your bank’s, or install malware on your system. A 2015 report by Verizon into data breach investigations has shown that 23pc of people open phishing emails.

2. Non-investment fraud – 1,028,000

AKA Ponzi schemes. Examples include penny stocks, pension liberation, and investment in commodities, such as wine or art, that later prove worthless

3. Computer virus – 1,340,000

Unauthorised software damages or takes control of your machine. For example: “Ransomware” encrypts your files and pictures then demands a payment to restore your access to it

4. Hacking – 681,000

Criminals exploit security weaknesses to illegally access other machines or networks. They steal sensitive data or subvert machines for their own purposes, such as sending spam or launching other cyber attacks

5. Advance fee fraud – 117,000

The victim is promised access to a great deal of money in return for a smaller upfront payment. For example, the classic “Nigerian Prince” email scam

6. Other fraud – 116,000

One example is “solicitor scams”, where a solicitor’s website is hacked, then clients asked to divert large payments into the criminals’ bank accounts.

7. Harassment and stalking – 18,826

Threats, abuse and online bullying – what’s commonly been termed “trolling” on social media

8. Obscene publications – 6,292

Pornography that meets the definition of the Obscene Publications Act, thus generally involving some form of physical abuse

9. Child sexual offences – 4,184

Assault, grooming, indecent communication, coercing a child to witness a sex act. These crimes may be being under-reported

10. Blackmail – 2,028

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Law School Scam: Charlotte School of Law Closes

Law School Scam

Charlotte School of Law, a beset revenue driven law school, has closed down, state authorities affirmed — making it the country’s second authorize law school to close its entryways this year.

Law School Scam

Despite the fact that Charlotte Law did not issue a formal shutting notice, its permit to work in North Carolina terminated, it had no endorsed arrangement to show understudies and, as of Tuesday, it never again had a site.

The North Carolina lawyer general’s office, which has been examining the law school for a while, affirmed that the school had shut.

“I need to express my mistake for the understudies and their families influenced by Charlotte School of Law’s disappointment,” Josh Stein, the lawyer general, said in an announcement on Tuesday.

The law school had been holding on by almost nothing for quite a long time despite tumbling enlistment after the American Bar Association’s accreditors put it on post trial supervision in November.

The lawyer general’s office has been inspecting whether Charlotte Law’s understudies had the expected data to select for the school’s law degree.

The lawyer general’s office advised the government Education Department that Charlotte Law was never again authorized to work in the state. Without a permit, “Charlotte School of Law is currently required to be shut,” Mr. Stein said in his announcement.

Prior this year, trustees of Whittier College in California declared the conclusion of Whittier Law School, the main completely certify law school to surrender to decreases in understudy enlistments and educational cost income.

Charlotte Law had battled with those same issues and that’s only the tip of the iceberg. The A.B.A’s. authorizing body had put the school on post trial supervision subsequent to discovering its exposures for understudies missed the mark concerning prerequisites. Not long after, the government Education Department refered to the school for “generous distortions” to understudies about its consistence with accreditation principles.

A week ago, the University of North Carolina’s leading body of governors, which regulates authorizing of state instructive organizations, said the school’s permit lapsed on Aug. 10.

Joshua N. Ellis, representative for the University of North Carolina framework, said that Charlotte Law had been working since June 21 on a confined permit that relied upon meeting a few conditions. One of them was that the government Education Department decide if Charlotte Law understudies could take an interest in elected understudy credit programs.

Charlotte Law had already demanded that its understudy advances would be reestablished, yet the check clearly ran out on its endeavors.

Neither the school nor its leader, Chidi Ogene, reacted to calls or messages on Tuesday to affirm the school’s status.

As of the fall of 2016, Charlotte Law had around 700 understudies enlisted, and in the vicinity of 2010 and 2016, got $337.1 million in government understudy credits for educational cost and understudy everyday costs, as indicated by Law School Transparency, a charitable association that tracks information about the country’s law schools.

As of late enlisted understudies are qualified for finish credit absolution, Mr. Stein, the lawyer general, said. He added that he had kept in touch with Betsy DeVos, the training secretary, for the understudy borrowers.

“I asked her to pronounce that uncommon conditions exist with this conclusion — a move that would extend credit pardoning rights to every one of the understudies who left Charlotte School of Law amid or after the 2016 fall semester,” he said.

Starting at now, understudies who pulled back from the school over the most recent 120 days can have their obligation released, yet the individuals who pulled back over 120 days prior would not be qualified.

Charlotte Law was one of three battling revenue driven schools claimed by the InfiLaw Corporation, some portion of Sterling Partners, a private value firm with workplaces in Baltimore and Chicago. The others are Arizona Summit Law School and Florida Coastal School of Law.

InfiLaw, situated in Naples, Fla., did not react to endeavors to get in touch with them.

Faultfinders have griped that Charlotte Law has more than once pushed back an end date to bring down the understudy credit release sums it should pay.

Kyle McEntee, official chief of Law School Transparency, and a commentator of Charlotte Law, stated, “The school and its eager proprietors have fizzled their understudies, the Charlotte people group and the lawful calling.”

Mr. Stein concurred, taking note of that “while great lawyers have moved on from Charlotte School of Law, the school over and over again neglected to convey for its understudies.”

“Charlotte School of Law told understudies they would be ‘prepared to rehearse upon graduation,’ yet less than one out of five approaching understudies of the Class of 2016 graduated, did the certified lawyer’s exam and landed a position that required the degree for which they spent more than $100,000.”

Selected understudies and others were not educated by the school that it would close down, however were told casually by R. Lee Robertson Jr., leader of the school’s graduated class affiliation.

Mr. Robertson said he talked on Monday to the break dignitary, Paul A. Meggett, and discovered that the school’s permit had lapsed and that the American Bar Association had not endorsed Charlotte Law’s option showing get ready for its present understudies.

“It creates the impression that there is no way ahead,” Mr. Robertson wrote in his email to approximately 2,200 school graduated class. “Our law school, it appears, is shutting, as of now.”

Rectification: August 16, 2017

A prior form of this article misquoted the era when the Charlotte School of Law got $337.1 million in government understudy credits for educational cost and understudy everyday costs. It was in the vicinity of 2010 and 2016, not a year ago.

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Most Fraud Ways That Put Down Your Business

Business Fraud

Get two business people in a room and chances are one, if not both, have been the casualty of bookkeeping extortion. As indicated by the Association of Certified Fraud Examiners yearly report, almost 50% of every single private venture encounter misrepresentation sooner or later in their business lifecycle. It will cost these associations a normal of $114,000 per event. More awful, such extortion is typically dedicated by a “reliable” representative.

As the leader of an administrative bookkeeping administration, I’ve revealed several false exercises influencing imminent customers. The sum can differ extraordinarily, from a couple of thousand dollars to millions.

Give me a chance to share some genuine stories that feature four basic sorts of misrepresentation for entrepreneurs and ways they can be maintained a strategic distance from:

1. Finance extortion.

A year ago, we went up against a nearby development firm as another customer. Their finance account had never been accommodated to their opportunity keeping framework, so we made that one of our best needs. As per organization records, two laborers and their director were working gigantic hours and getting paid a huge amount of extra time that added up to more than $80,000 in extra yearly pay. Their timesheets uncovered they were taking a shot at development extends that were more than 50 miles far from each other at the same time.

Well. It took around three seconds to make sense of that and terminate the representatives, yet the cash was no more.

While it is simple for you and me to state this would never transpire, the extra compensations given to these three folks added up to an expansion of just four percent of the aggregate finance cost – an assume that when unchecked could without much of a stretch become lost despite a general sense of vigilance. Most organizations don’t keep sufficiently clean records to notice such a sum, particularly when they subsidize a six-figure week after week finance.

The most ideal approach to avert finance misrepresentation is to accommodate all asset report records and finance records month to month or, in any event, quarterly. Search for any errors and explore them until the point that you have an unmistakable answer.

2. “Twofold check” misrepresentation.

I am aware of an eatery whose previous accountant stole $550,000 more than five years. She did this by composing two checks each time she paid a charge, one to the merchant and one to herself. For instance, on the off chance that she needed to pay $500 to ACME Insurance Company, she would at the same time compose another check to herself for $100 that she coded in the bookkeeping framework as “Zenith.”

It is hard for entrepreneurs to get this kind of movement. Regardless of the possibility that they are taking a gander at the monetary articulations oftentimes and the bills look somewhat high, they can for the most part appear to be sensible. Be that as it may, this can include rapidly. For this situation, the greater part a million dollars was stolen by composing 20 to 30 “twofold checks” every month for ostensible sums spread over various cost accounts.

This misrepresentation was just identified when the accountant fell sick and another clerk had her spot. Quickly, the new individual saw that the financial balance had not been appropriately accommodated in months. Subsequent to doing as such, unmistakably there were numerous installments around the same time to a similar merchant.

As an entrepreneur, it is hard to discover great bookkeeping help, yet it is critical to have something beyond one individual marking checks and accommodating the ledger. Additionally, it is essential to have an outcast come and take a gander at the books and compromises at any rate every year, and aimlessly times.

3. Over-requesting extortion.

Another of our customers had a 12-year low maintenance office chief who might routinely arrange and get all the workplace supplies. She was paid $10 every hour and given simply enough work to get her up to the point (however not finished) where despite everything she stayed ineligible to get medical advantages. She was a single parent, had a youngster at home, and wound up plainly displeased.

For at any rate the most recent three years of her work, she started over-requesting office supplies. She would return supplies the organization did not require in return for a gift voucher, which she at that point used to purchase something little and take the rest of money. It is vague what amount was stolen, however our appraisals were that in one year it was over $19,000.

The least demanding route for this business to have kept away from this kind of misrepresentation is to make the best choice from the begin. Great workers pay for themselves overall ten times, and terrible representatives can demolish organizations. For this situation, the administrator was short-sided in needing to spare $250 every month in medical coverage premiums. The outcome was an unfortunate workplace and a situation where this woman felt that it was “reasonable” for her to take.

4. “Companionship” misrepresentation.

A splendid architect companion of mine once enlisted his closest companion’s little girl to be his accountant. He had referred to her as a child. She was keen, dedicated and, on the grounds that she was a single parent, she required a sound salary. For reasons unknown, she likewise felt abused by her dad, felt her past manager was out to get her, had issues at home, and required this activity to escape obligation. My companion is an extraordinary person and an exceptionally putting stock face to face. Inside a year, the clerk was the just a single written work, marking and approving checks. She was running finance and the main contact for the IRS.

In late 2011, he was amazed to discover that the majority of his financial balances were solidified and collected by the IRS. Despite the fact that he had paid and recorded the greater part of his own salary charges on time, his clerk was taking the cash that should go to finance charges. As the main IRS purpose of-contact for the business, she hung this out finished a three-year time span and stole $439,000. After three days, the organization was compelled to close down, 15 workers lost their occupations, and the investors (counting her dad) lost the greater part of their cash.

The lesson of the story is to never procure anybody exclusively in view of kinship, family, commitment, or sentiments of sensitivity. Fabricate a culture of responsibility, measure results, and ensure everybody realizes that you are taking a gander at their execution. At that point, procure in light of ability, and pay for that ability to perform at an abnormal state of responsibility and uprightness.

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How To Protect Your Business Or Small Business

Business Fraud

Protect your small business

How scammers con small businesses

Scams targeting small businesses come in various forms—from invoices for advertising or directory listings that were never requested to dubious office supplies that were never ordered.

Protect yourself and your business by being aware of the common scams targeting small businesses.

Small business scams are becoming increasingly sophisticated and scammers will go to great lengths to convince you that the documents they send you or the offers they make are legitimate.

However, they can easily copy or modify letterheads, names and logos to make them look real, or set up a professional-looking but fake website. Scammers can even gain access to your supplier’s email account and intercept emails without either of you realising.

Scammers recognise that small business operators are busy and have fewer resources than large businesses, so they aim to take advantage of that.

Common scams targeting small business

Investment schemes

Investment schemes involve getting you or your business to part with money on the promise of a questionable financial opportunity.

Online shopping scams

Oline shopping scams involve scammers pretending to be legitimate online sellers, either with a fake website or a fake ad on a genuine retailer site.

False billing

False billing scams request you or your business to pay fake invoices for directory listings, advertising, domain name renewals or office supplies that you did not order.

Overpayment scams

Overpayment scams work by getting you to ‘refund’ a scammer who has sent you a cheque for too much money for an item you are selling.

Malware & ransomware

Malware tricks you into installing software that allows scammers to access your files and track what you are doing, while ransomware demands payment to ‘unlock’ your computer or files.

Whaling & spear phishing

Whaling or spear phishing scams target businesses or organisations in an attempt to get confidential information for fraudulent purposes.

Running an online business can come with its share of risks – using the internet can open your business up to being targeted by scammers from anywhere in the world. Fortunately, there are plenty of resources online to help you out.

Learn to recognise common online scams to avoid getting caught out. These can include:

  • taxation scams – scammers can disguise themselves as government agencies, such as the Australian Taxation Office (ATO), to trick you into revealing details such as your tax file number (TFN) over the internet.
  • online transaction scams – including auction or shopping scams, spam offers, online banking or credit card scams, or spyware
  • internet domain name scams.

Internet domain name scams

These scams target businesses with websites by promising to renew or secure their domain name (or web address) before another business claims it. Business owners could be sent a legitimate-looking email or invoice with payment details for this service.

Under this scam you’ll be sent either an unsolicited invoice or email for an internet domain name registration usually very similar to your own business domain name. You could also be sent a renewal notice for your actual domain name. The notice could be from a business that supplies domain names trying to trick you into signing up to their service or it could be from a scammer trying to take your money.

The ACCC’s Scamwatch website provides information about the domain name renewal scam on its False billing webpage. Do your homework to avoid being caught out.

How to protect your business from internet scams

The ATO’s tips for recognising and avoiding tax-related scams and fraud include:

  • report emails that offer tax refunds in exchange for entering personal information
  • report emails which inform you that you owe the ATO money or your account is in arrears and you will be taken to court
  • always use ATO’s online services by visiting the ATO website
  • make sure you keep your tax file number (TFN) and passwords secure.

If you’re a small business owner, you need to be aware that you’re a target for scammers.

Scammers will often go to great lengths to convince you that their offer or request is legitimate, so it’s important that you remain aware of typical scams and know what to do if you’re targeted.

Common scams targeting business

  • Grant related scams
  • Tax time scams – this includes tax refund and phishing scams
  • Online scams – including internet website domain name scams
  • False billing scams
  • Identity theft scams
  • Charity scams.

Keep a watchful eye out for anything suspicious, and do your research into any offers you might receive, especially through your email. If you think you’ve been the victim of a scam, report the scam online to Scamwatch.

What to do…

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Best Preventing Business Scam Tips

Business Scam

Top Business Security Tips

Congratulations on beginning your own business, or on obtaining your own address and gap your place of business. currently that you’re finished all that, let’s bring up security.

Whether you’re within the business of providing a service to a client or providing a product, there’ll forever be a risk issue with the data that you just handle: for each you and for your customers. it’s an honest plan to place safeguards in situ before any major downside comes up.

Protecting sensitive data may be a should, however ensuring your physical premises has safety precautions and safety plans in situ can build everybody feel relaxed and may be one thing that you just contemplate further.

Create a Code of correct Conduct

Before you rent the primary worker, you ought to establish a Code of Conduct. This document ought to define what’s acceptable or correct behavior inside workplace premises Associate in Nursingd what repercussions there’ll be if an worker violates the terms. tho’ this document doesn’t ought to detail all necessary actions, it’s best to stipulate necessary areas like protective company property and keeping sensitive data safe and inside company premises.

A Code of Conduct ought to be communicated to your staff upon hiring and that they ought to signify that they’re going to abide by it. If there square measure any changes you wish to create to the document, act and do therefore and guarantee all of your staff are going to be sophisticated of the changes.

A Code of Coduct document ought to even be accessible to your staff in the least times and may be enclosed in every one of their personal worker files.

Schedule a Weekly or Monthly Shredding

Protection of your documents shouldn’t solely be the protection you put in on your computers. Most of the documents that contain personal data for your customers or maybe for the business square measure hold on on paper. It’s safer to schedule a weekly or monthly shredding of documents. this fashion everybody are going to be wont to setting aside documents for shredding prior time.

If you discover weekly or monthly shredding to be a problem you’ll be able to additionally opt for a special schedule. the purpose is to create certain there’s a daily schedule followed in shredding and eliminating recent documents.

Schedule Audits

To more place grade of security on documents and knowledge, schedule audits annually. this suggests you’ll be ready to check on documents unbroken by your staff each in paper kind and in their computers. when you’ve done the audits, audits can enable you to spot areas wherever security may be improved.

Make the foremost out of the audits you conduct. when distinguishing the areas wherever security may be improved, see what may be done concerning it. don’t place it off: golf stroke it off can enable the likelihood of the weakness in your security to be exploited.

Audits aren’t there to seem for faults in your staff. they’re in situ to judge the protection measures that you just have found out on computers and around your workplace space. you ought to emphasize this once you apprise your staff of the audits. this fashion nobody can interpret your purpose in conducting the audit.

Designate laptop Access Levels

Whether your business utilizes one laptop or utilizes a network, it’s best you designate a username for every individual user. when you designate a username, you ought to additionally limit the access levels of the profile of your worker. This not solely guarantees you recognize what your worker will access however it additionally ensures that you just won’t have issues once it involves any unauthorized changes that may be created.

Protecting the countersign of every user is additionally a must; need that their personal passwords ought to have a upper case, a number, and a special character. Passwords should be modified when thirty or forty five days. If staff aren’t at their desks, build it a demand that they lock their computers to avoid unauthorized access. Your staff ought to even be liable for protective their countersigns and may not write them down on any piece of paper and most significantly ne’er share their password with anyone.

Emergency Plans

Be it reception or at the workplace, you ought to have already got set emergency plans. directions ought to embody what to try and do just in case of emergencies like hearth, robberies, theft, or tornadoes. Your safety set up ought to even have complete contact numbers for the police and emergency services.

An evacuation set up ought to even be made public and displayed during a outstanding space wherever your staff will read it and familiarise themselves with it. It’s additionally an honest plan to supply reminders or safety tips sporadically to staff.

Office Security

Keep in mind that putting safety measures for your workplace premises is best instead of anticipating one thing to happen to force you to place them up. investment during a sensible security company is usually recommended as protection are going to be found out round the clock. however before you get this feature you’ll be able to ensure that every one doors, windows and storage square measureas have their own locks which keys to every of those are properly monitored.

Your workplace ought to even be placed in {an square measurea|a neighborhood|a district|a region|a locality|a vicinity|a part|a section} which will be seen from the road simply as most thieves or burglars square measure interested in businesses that are hidden from read. If your business is hidden from read, Associate in Nursing audio alarm would possibly facilitate to scale back the risks of not being seen simply.

Adequate Lighting

Adequate lighting is very important not just for the inside of your building, however it’s additionally a requirement for the outside. For your workplace area, forever leave a lightweight on once you leave for the night therefore police or security will see into it. For the perimeter, forever maintain sensible lighting on doors and in parking tons.

This precaution is straightforward however it not solely keeps your area safe however it additionally keeps your staff safe if a need to increase their hours into the night.

These square measure solely tips that you just will contemplate when you’ve got found out your business, this can take time and energy on your half and can seemingly not be really low-cost to implement. however don’t ignore security measures just because of an extra value. the number of cash you’ll pay for security measures is considerably low compared to any instance your business would possibly suffer attributable to a breach in security.

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How To Defend Yourself From FRAUDULENT CHARITABLE SCHEMES

Charity Fraud

TIPS ON AVOIDING FRAUDULENT CHARITABLE CONTRIBUTION SCHEMES

BATON ROUGE, LA – The National Center for Disaster Fraud reminds the public to be aware of and report any instances of alleged fraudulent activity related to relief operations and funding for victims. Unfortunately, criminals can exploit disasters, such as Hurricane Harvey, for their own gain by sending fraudulent communications through email or social media and by creating phony websites designed to solicit contributions.

Tips should be reported to the National Center for Disaster Fraud at (866) 720-5721. The line is staffed 24 hours a day, seven days a week. Additionally, e-mails can be sent to disaster@leo.gov (link sends e-mail), and information can be faxed to (225) 334-4707.

The U.S. Department of Justice established the National Center for Disaster Fraud to investigate, prosecute, and deter fraud in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region. Its mission has expanded to include suspected fraud from any natural or manmade disaster. More than 30 federal, state, and local agencies participate in the National Center for Disaster Fraud, which allows the center to act as a centralized clearinghouse of information related to disaster relief fraud.

The public should remember to perform due diligence before giving contributions to anyone soliciting donations or individuals offering to provide assistance to those affected by the tornadoes. Solicitations can originate from social media, e-mails, websites, door-to-door collections, flyers, mailings, telephone calls, and other similar methods.

Before making a donation of any kind, consumers should adhere to certain guidelines, including:

  • Do not respond to any unsolicited (spam) incoming e-mails, including clicking links contained within those messages, because they may contain computer viruses.
  • Be skeptical of individuals representing themselves as members of charitable organizations or officials asking for donations via e-mail or social networking sites.
  • Beware of organizations with copy-cat names similar to but not exactly the same as those of reputable charities.
  • Rather than follow a purported link to a website, verify the legitimacy of nonprofit organizations by utilizing various Internet-based resources that may assist in confirming the group’s existence and its nonprofit status.
  • Be cautious of e-mails that claim to show pictures of the disaster areas in attached files because the files may contain viruses. Only open attachments from known senders.
  • To ensure contributions are received and used for intended purposes, make contributions directly to known organizations rather than relying on others to make the donation on your behalf.
  • Do not be pressured into making contributions; reputable charities do not use such tactics.
  • Be aware of whom you are dealing with when providing your personal and financial information. Providing such information may compromise your identity and make you vulnerable to identity theft.
  • Avoid cash donations if possible. Pay by credit card or write a check directly to the charity. Do not make checks payable to individuals.
  • Legitimate charities do not normally solicit donations via money transfer services. Most legitimate charities’ websites end in .org rather than .com.
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Financial Fraud: Common Investment Frauds

Investment Fraud

Investment scams prey on your hope to earn interest or a return on investment on the amount of money that you invest. The Securities and Exchange Commission (SEC) offers overviews of many common investment frauds, and tips to avoid being a victim.

If you are the victim of an investment fraud, you can file a complaint with the SEC or with your state’s securities administrator.

Types of Fraud

Investment fraud comes in many forms. Whether you are a first-time investor or have been investing for many years, here are some basic facts you should know about different types of fraud.

Affinity Fraud
Advance Fee Fraud
Binary Options Fraud
High Yield Investment Programs
Internet and Social Media Fraud
Microcap Fraud
Ponzi Scheme
Pre-IPO Investment Scams
Pyramid Schemes
“Prime Bank” Investments
Promissory Notes
Pump and Dump Schemes

Information on the following frauds is available on the Commodity Futures Trading Commission website at the links below.

Commodity Pool Fraud
Foreign Currency Trading Fraud
Precious Metals Fraud

Affinity Fraud

Affinity frauds target members of identifiable groups, such as the elderly, or religious or ethnic communities. The fraudsters involved in affinity scams often are – or pretend to be – members of the group. They may enlist respected leaders from the group to spread the word about the scheme, convincing them it is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraud they helped to promote.

These scams exploit the trust and friendship that exists in groups of people. Because of the tight-knit structure of many groups, outsiders may not know about the affinity scam. Victims may try to work things out within the group rather than notify authorities or pursue legal remedies.

Affinity scams often involve “Ponzi” or pyramid schemes where new investor money is used to pay earlier investors, making it appear as if the investment is successful and legitimate.

Advance Fee Fraud

Advance fee frauds ask investors to pay a fee up front – in advance of receiving any proceeds, money, stock, or warrants – in order for the deal to go through. The advance payment may be described as a fee, tax, commission, or incidental expense that will be repaid later. Some advance fee schemes target investors who already purchased underperforming securities and offer to sell those securities if an “advance fee” is paid, or target investors who have already lost money in investment schemes. Fraudsters often direct investors to wire advance fees to escrow agents or lawyers to give investors comfort and to lend an air of legitimacy to their schemes. Fraudsters also may try to fool investors with official-sounding websites and e-mail addresses.

Advance fee frauds may involve the sale of products or services, the offering of investments, lottery winnings, found money, or many other so-called opportunities. Fraudsters carrying out advance fee schemes may:

  • Offer common financial instruments such as bank guarantees, old government or corporate bonds, medium or long term notes, stand-by letters of credit, blocked funds programs, “fresh cut” or “seasoned” paper, and proofs of funds;
  • Offer to find financing arrangements for clients who pay a “finder’s fee” in advance; or
  • Pose as legitimate U.S. brokers or firms and offer to help investors recover their stock market losses by exchanging worthless stock, but requiring investors to pay an upfront “security deposit” or post an “insurance” or “performance bond.”

Binary Options Fraud

Much of the binary options market operates through Internet-based trading platforms that are not necessarily complying with applicable U.S. regulatory requirements and may be engaging in illegal activity.  Investors should be aware of fraudulent promotion schemes involving binary options and binary options trading platforms.

What is a Binary Option?

A binary option is a type of options contract in which the payout depends entirely on the outcome of a yes/no proposition and typically relates to whether the price of a particular asset will rise above or fall below a specified amount.  Once the option is acquired, there is no further decision for the holder to make regarding the exercise of the binary option because binary options exercise automatically.  Unlike other types of options, a binary option does not give the holder the right to buy or sell the specified asset.  When the binary option expires, the option holder receives either a pre-determined amount of cash or nothing at all.

Investor Complaints Relating To Fraudulent Binary Options Trading Platforms

The SEC has received numerous complaints of fraud associated with websites that offer an opportunity to buy or trade binary options through Internet-based trading platforms.  The complaints fall into at least three categories:

  1. Refusal to credit customer accounts or reimburse funds to customers

These complaints typically involve customers who have deposited money into their binary options trading account and who are then encouraged by “brokers” over the telephone to deposit additional funds into the customer account.  When customers later attempt to withdraw their original deposit or the return they have been promised, the trading platforms allegedly cancel customers’ withdrawal requests, refuse to credit their accounts, or ignore their telephone calls and emails.

  1. Identity theft

These complaints allege that certain Internet-based binary options trading platforms may be collecting customer information (including copies of customers’ credit cards, passports, and driver’s licenses) for unspecified uses.  Do not provide personal data.

  1. Manipulation of software to generate losing trades

These complaints allege that the Internet-based binary options trading platforms manipulate the trading software to distort binary options prices and payouts.  For example, when a customer’s trade is “winning,” the countdown to expiration is extended arbitrarily until the trade becomes a loss.

Beware of Overstated Investment Returns for Binary Options

Additionally, some binary options Internet-based trading platforms may overstate the average return on investment by advertising a higher average return on investment than a customer should expect, given the payout structure.

For example, a customer may be asked to pay $50 for a binary option contract that promises a 50% return if the stock price of XYZ company is above $5 per share when the option expires.  Assuming a 50/50 chance of winning, the payout structure has been designed in such a way that the expected return on investment is actually negative, resulting in a net loss to the customer.  This is because the consequence if the option expires out of the money (approximately a 100% loss) significantly outweighs the payout if the option expires in the money (approximately a 50% gain).  In this example, an investor could expect — on average — to lose money.

Always Check the Background of a Firm or Financial Professional

Before investing, check out the background, including registration or license status, of any firm or financial professional you are considering dealing with through the SEC’s Investment Adviser Public Disclosure (IAPD) database, available on Investor.gov, and the National Futures Association Background Affiliation Status Information Center’s BASIC Search.  If you cannot verify that they are registered, don’t trade with them, don’t give them any money, and don’t share your personal information with them.

High Yield Investment Programs

The Internet is awash in so-called “high-yield investment programs” or “HYIPs.” These are unregistered investments typically run by unlicensed individuals – and they are often frauds. The hallmark of an HYIP scam is the promise of incredible returns at little or no risk to the investor. A HYIP website might promise annual (or even monthly, weekly, or daily!) returns of 30 or 40 percent – or more. Some of these scams may use the term “prime bank” program. If you are approached online to invest in one of these, you should exercise extreme caution – it is likely a fraud.

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Deanna Roberts Has Been Sentenced For Introducing Liquid Silicone That Was Obtained By Fraud Into Interstate Commerce

Fraud Into Interstate Commerce

Florida Woman Sentenced to Federal Prison for Causing the Death of One Victim and Hospitalization of Others by Injecting them With Liquid Silicone

ATLANTA – Deanna Roberts has been sentenced to eleven years and three months in federal prison for illegally injecting persons with liquid silicone and for introducing liquid silicone that was obtained by fraud into interstate commerce. One woman died approximately 36 hours after Roberts performed the injection, after the silicone migrated to her lungs, heart, brain, and other organs. Other victims who received silicone injections by Roberts were hospitalized with respiratory problems when the silicone moved to their lungs. Even after Roberts became aware that the victim died and others had been hospitalized, Roberts continued to obtain silicone illegally so that she could administer silicone to others.

“The defendant was aware that silicone injections she was administering were causing serious harm, even requiring hospitalization, yet she continued to inject paying customers with it knowing the risks that were involved,” said U. S. Attorney John Horn. “Even after Roberts knew that the victim in this case died from the injections she gave her, she did not stop. This case is a shocking reminder that citizens should seek care only from experienced and licensed health care professionals.”

“The FDA has not approved any liquid silicone products to be injected into the body for tissue augmentation, and serious harm, including death, can occur following such injections,” said Justin D. Green, Special Agent in Charge, FDA’s Office of Criminal Investigations’ Miami Field Office. “We will continue to aggressively pursue and bring to justice those who endanger the U.S. public health by offering this hazardous procedure.”

According to U.S. Attorney Horn, the charges and other information presented in court: Liquid silicone is strictly regulated by the Food and Drug Administration and may be legally injected directly into the human body only as a treatment for certain eye conditions. In April 2004, Roberts began ordering liquid silicone from a business in Arizona. In order to purchase liquid silicone from the business, Roberts submitted an affidavit to the company in which she falsely swore that she did not intend to inject the silicone into humans. Rather, she claimed that she intended to supply the silicone to a customer for use in lubricating medical equipment. Between April 2004 and December 2015, Roberts purchased at least 178 gallons of liquid silicone.

Roberts injected the silicone she illegally obtained into the hips, buttocks, and other body parts of her victims. Roberts falsely claimed to them that she was a licensed medical practitioner and that the silicone she used was medical grade. Roberts charged between $300 and $1000 for each silicone treatment that she administered.

During the evening of November 16, 2015, Roberts injected liquid silicone into the buttocks of L.H. The next day L.H. complained of tightness in her chest and shortness of breath, symptoms that are consistent with the presence of liquid silicone in the lungs. During the early morning hours of November 18, 2015, L.H. died. Dr. Geoffrey Smith, Associate Medical Examiner for DeKalb County, performed an autopsy on L.H. Based upon the autopsy Dr. Smith determined that L.H. died from complications due to silicone polymer embolization. Dr. Smith found that L.H.’s lungs were heavily congested with liquid silicone.

In addition, Dr. Smith found liquid silicone in L.H.’s liver, kidney, heart, brain, and spleen. Dr. Smith noted that each of L.H.’s buttocks had 10 injection sites. From a microscopic examination of tissue surrounding one of the injection sites, Dr. Smith determined that a blood vessel had been punctured. The evidence, therefore, established that the defendant punctured the blood vessel with one of the silicone injections and that the silicone was carried by the blood stream to L.H.’s lungs and other organs causing her death.

Also on November 16, 2015, the defendant illegally injected liquid silicone into the buttocks of victim J.T. In November 2014, the defendant injected liquid silicone into the buttocks of victim V.M. and in October 2014, the defendant injected liquid silicone into the face of victim S.P. However, J.T., V.M., and S.P. did not die nor were they hospitalized from their injections.

In 2006, Roberts administered silicone injections to victim J.H.’s lips on three occasions. Also in 2006, Roberts hired J.H. to drive her to Florida where she would administer silicone injections. J.H. worked for Roberts as a driver for about four months. J.H. testified that Roberts was aware that at least one person was hospitalized after Roberts injected her with silicone. J.H. also testified that Roberts claimed that the victim was hospitalized, not because she suffered complications from the silicone injections, but because she was HIV positive. However, J.H. was aware that the victim was not HIV positive.

In 2006, Roberts injected victim S.W. with liquid silicone. Shortly thereafter, S.W. began to feel tightness in her chest and discomfort in her lungs. The next day she passed out at work. S.W. was taken to the hospital and spent the next 31 days there recovering from problems with her lungs. When she was released, S.W. had to use oxygen to assist her in breathing.
In October 2009, Roberts administered silicone injections into victim A.S.’s buttocks at A.S.’s house in Florida. A.S. immediately felt her heart rate accelerate, so she asked Roberts to stop. Roberts then took A.S. to the emergency room. A.S. was admitted to the hospital with respiratory problems and the next day she was placed on a ventilator. A.S. stayed in the hospital 2-3 weeks. While A.S. was in the hospital, Roberts called her to check on her condition. At the same time, Roberts inquired about when she could come by to pick up the payment that A.S. owed her for the silicone injections. While A.S. was still hospitalized, Roberts came to the hospital to pick up a check to pay for the injections. During the visit, A.S. overheard a nurse tell Roberts that A.S. was being treated for silicone poisoning. Since 2013, A.S. has had problems because the silicone that Roberts injected into her buttocks has been coming out of her body. Because of this, A.S. spent another eight weeks in the hospital and has had surgery in an attempt to remove the silicone. As a result, her buttocks are now deformed.

Roberts administered silicone injections to victim D.R., on multiple occasions between 2005 and 2010. In June 2010, Roberts administered silicone injections to D.R.’s breasts and face at the defendant’s house in Florida. Later that day D.R. began to feel nauseous. The following day she went to the emergency room and was admitted to the hospital for treatment for acute respiratory failure. She had to be resuscitated and was placed on a respirator. After spending a month in the hospital, D.R. was released to a rehabilitation facility where she spent several weeks before she could return to her home.

D.R.’s friend, K.M. was present the day the defendant administered the silicone injections that hospitalized her. After D.R. was hospitalized, K.M. informed the defendant that D.R. was in the hospital.

Deanna Roberts, 47, of Sanford, Florida, was sentenced to eleven years and three months in prison to be followed by three years of supervised release. Roberts was convicted on these charges on March 31, 2017, after she pleaded guilty.

This case was investigated by the Food and Drug Administration, Office of Criminal Investigations, the Doraville Police Department, and the Atlanta Police Department.

Assistant U.S. Attorneys William L. McKinnon, Jr. and Erin E. Sanders prosecuted the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov (link sends e-mail) or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

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Financial Fraud: Edward Ambrosino Charged With Wire Fraud, Tax Evasion, Making And Subscribing to False Corporate Tax Returns

Financial Fraud

Town Of Hempstead Councilman Edward Ambrosino Indicted For Wire Fraud And Tax Evasion

An eight-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Edward Ambrosino with wire fraud, tax evasion, making and subscribing to false corporate tax returns, and failing to file a return or pay tax.  The indictment was returned under seal by a federal grand jury sitting in Central Islip, New York on March 28, 2017.  Ambrosino was arrested this morning and will be arraigned this afternoon before United States District Judge Joanna Seybert at the federal courthouse in Central Islip, New York.

The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Acting Special Agent-in-Charge Kathy A. Enstrom, Internal Revenue Service-Criminal Investigation (IRS-CI).

“As alleged in the indictment, the defendant, an elected public official, defrauded his former employer and committed a variety of tax offenses,” stated Acting United States Attorney Rohde. “Today’s indictment is a reminder of the obvious, that public officials are not exempt from paying their fair share of taxes and otherwise complying with the laws of the United States, just like any other citizen.”

“In this case as charged, Ambrosino’s crimes claimed as a victim, the law firm for whom he worked,” stated Assistant Director in Charge Sweeney.  “As alleged, he also committed tax fraud, all the while serving as an elected public official.  The FBI is committed to working with our law enforcement partners to ensure this type of behavior ceases to exist, no matter who is at fault.”

“The IRS enforces the nation’s tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others. The indictment alleges, Mr. Ambrosino intentionally sought to undermine the tax laws of the United States, violate the public trust while ignoring the fiduciary responsibility he has with his employer,” stated Acting Special Agent-in-Charge Enstrom.

As detailed in the indictment, Ambrosino was an attorney licensed to practice in New York State, specializing in economic and industrial development and financings.  Between approximately November 2001 and December 2015, he was “Of Counsel” at a law firm based in Uniondale, New York (the “Law Firm”).  In addition, since March 2003, Ambrosino has served as a Councilman for the Town of Hempstead, New York.  Since 2010, he has also acted as Special Counsel to the Nassau County Executive.

In 2011, Ambrosino incorporated Vanderbilt Consulting Group, Inc. (“Vanderbilt”).  Ambrosino was the sole shareholder for Vanderbilt.  In September 2012, Ambrosino opened a bank account in the name of Vanderbilt (the “Vanderbilt Bank Account”), and he was the sole authorized signer on that account.

As alleged in the indictment, from 2013 through 2015, in contravention of his compensation agreement with the Law Firm, Ambrosino diverted legal fees that he was required to provide to the Law Firm and deposited them into the Vanderbilt Bank Account.  Among Ambrosino’s clients from whom he received legal fees were components of Nassau County, New York, including the Nassau County Industrial Development Agency (the “NCIDA”) and the Nassau County Local Economic Assistance Corporation (the “NCLEAC”).  Between 2013 and 2015, Ambrosino received more than $1.3 million in payments from the NCIDA and NCLEAC.  Of this amount, Ambrosino deposited more than $800,000 into a bank account, for which he was the sole signatory, rather than submitting the payments to the Law Firm as required under his compensation agreement.

As further alleged in the indictment, Ambrosino evaded substantial income tax due and owing by him and filed false and fraudulent corporate tax returns on behalf of Vanderbilt.  For the 2011, 2012 and 2013 tax years, Ambrosino evaded the assessment of income tax by, among other things, deducting rent expenses on the Vanderbilt corporate tax returns that he knew were not business expenses.  Specifically, Ambrosino claimed rent for a Manhattan apartment paid for by him on behalf of a third-party as a business expense.  Ambrosino’s personal tax returns included the losses flowing from Vanderbilt for the 2011 and 2012 tax years.  In addition, for the 2013 tax year, Ambrosino failed to claim approximately $315,000 in funds he diverted from the Law Firm on either his personal income tax return or the Vanderbilt corporate tax return.  With respect to the 2014 tax year, Ambrosino did not timely file his personal tax return or the corporate tax return for Vanderbilt.  As a result of Ambrosino’s conduct, the IRS suffered a tax loss of approximately $254,628.

If convicted, Ambrosino faces a maximum term of imprisonment of 20 years for the wire fraud charge, five years for each charge of tax evasion, three years for each charge of making and subscribing to false corporate tax returns, and one year for failing to file a tax return.  The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Catherine M. Mirabile and Raymond A. Tierney are in charge of the prosecution.

The Defendant
EDWARD AMBROSINO

Age:  52
North Valley Stream, NY

E.D.N.Y. Docket No. 17-CR-162 (JS)

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Financial Fraud: Artica-Romero, Joaquin Mejia-Murillo And Milton Noel Romero Charged With Wire Fraud

Financial Fraud

Three Indicted For Scheme To Facilitate Evasion Of Workers’ Compensation Laws And Employment Of Undocumented Aliens In Construction Industry

Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announces the unsealing of an <a href=”https://www.justice.gov/usao-mdfl/press-release/file/954131/download” target=”_blank”; length=254897″>indictment charging Orlando residents Anyi (“Angie”) Artica-Romero (31), Joaquin Mejia-Murillo (62), and Milton Noel Romero (34) with wire fraud and conspiracy to commit wire fraud. Artica-Romero is charged in 56 counts, Mejia-Murillo is charged in 1 count, and Romero is charged in 6 counts. Each count carries a maximum penalty of 20 years in federal prison. The indictment also notifies the defendants that the United States intends to seek forfeiture of approximately $812,000, which is the amount of proceeds obtained as a result of the offenses.

According to the indictment, Mejia-Murillo registered a corporation called JM Construction Services, Inc. with the State of Florida. He then applied for a workers’ compensation insurance policy for September 2015 through September 2016 to cover six employees and an estimated annual payroll of $140,800.

The insurance company issued the policy for an annual premium of $17,152 based on the payroll information set forth in the application. Subsequent amendments to the policy resulted in its covering 19 employees and an estimated payroll of $410,800, at a revised premium of $38,860.

Under Florida law, any business that engages in construction work must secure and maintain workers’ compensation insurance, and the failure to do so is a felony. Construction contractors must require subcontractors to provide proof that they have workers’ compensation insurance.

Artica-Romero and Mejia-Murillo “rented” the JM Construction insurance policy to numerous contractors and subcontractors who employed hundreds of workers, many of whom are suspected of being undocumented aliens. To do so, they directed the insurance agent to send a certificate of insurance to the contractors and subcontractor as purported proof of sufficient workers’ compensation insurance.

The contractors and subcontractors wrote payroll checks to JM Construction for work performed by their employees. Mejia-Murillo then cashed the checks and gave the money to Artica-Romero to pay the workers. Artica-Romero kept four percent of each check as a fee for their services.

Between September 2015 and August 2016, Artica-Romero and Mejia-Murillo cashed payroll checks totaling $9,419,965, with their four percent fee totaling $376,798. No state or federal payroll taxes were deducted from the workers’ pay. The annual premium for a workers’ compensation insurance policy covering a payroll of $9,419,965 would have been approximately $1,088,078.

On August 4, 2016, the State of Florida Department of Financial Services, Division of Workers’ Compensation, served a Stop-Work Order on JM Construction alleging that it had failed to secure the payment of workers’ compensation by materially understating or concealing payroll. Subsequently, Mejia-Murillo left the country for Honduras.

To continue the scheme, Artica-Romero began working with Milton Romero, who had registered a company called Milton Statewide General Services, Inc., with the State of Florida. Romero, on behalf of Milton Statewide, obtained workers’ compensation insurance to cover six employees and an estimated payroll of $100,000 for an annual premium of $20,002. A certificate of insurance was issued and then “rented” to numerous contractors and subcontractors, in the same way that JM Construction’s certificate had been rented.

Between August 2016 and March 11, 2017, Artica-Romero and Romero cashed payroll checks totaling $10,883,772, with their four percent fee totaling $435,351. Again, no state or federal payroll taxes were deducted from the workers’ pay. The annual premium for a workers’ compensation insurance policy covering a payroll of $10,883,772 would have been approximately $1,750,453.

An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Florida Department of Financial Services, Division of Investigative and Forensic Services. It will be prosecuted by Assistant United States Attorney Arnold B. Corsmeier.

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Investment Fraud: John Quadrino Charged With Wire Fraud Conspiracy For Orchestrating a Ponzi Scheme

Investment Fraud

Oceanside Man Indicted In Multi-Million-Dollar Fraud Scheme

John Quadrino Charged With Defrauding Over 80 Investors in a Ponzi Scheme, Resulting in Losses of More Than $6 Million

A six-count indictment was unsealed this morning in federal court in Central Islip, New York, charging John Quadrino, the owner/operator of Princess Cut Industries, Inc., Sassy Jewelry Buyers, Inc., and Golden Glitter Trading, Inc. (collectively referred to as the “Gold Purchasing Companies”).  The defendant is charged with wire fraud and wire fraud conspiracy for orchestrating a Ponzi scheme over the course of more than five years utilizing the Gold Purchasing Companies.  The defendant will be arraigned at the federal courthouse in Central Islip this afternoon before United States Magistrate Judge Arlene R. Lindsay.

The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation (“FBI”), New York Field Office, and Madeline Singas, Nassau County District Attorney.

As set forth in the indictment, the charges against the defendant stem from a multi-year investigation by the United States Attorney’s Office, the FBI and the Nassau County District Attorney’s Office (“NCDAO”).  The investigation revealed that the defendant represented to potential investors that the Gold Purchasing Companies were involved in the sale of gold, jewelry and diamonds to refineries and jewelers.  The defendant asked investors to invest large sums of money for fixed periods of time in exchange for a guaranteed, fixed rate of return at the end of the agreed upon time period.  Contrary to the representations made by the defendant to investors, the defendant never actually purchased gold, jewelry or diamonds in any significant quantities.  Instead, he systematically engaged in a classic Ponzi scheme over the course of five years, returning investor principal and interest from the investor capital of other victims.  As a result, more than 80 investors invested approximately $13.1 million with the Gold Purchasing Companies and  suffered total losses of approximately $6.3 million.   The defendant used investor capital to, among other things, issue checks to himself and to pay for his personal gambling expenses.

“As alleged, the defendant deceived investors with the promise of purchases of gold and other valuables and guaranteed returns, leading to his own enrichment and victim losses of over $6 million,” stated Acting United States Attorney Rohde.  “We will not permit such conduct to go unanswered.”  Ms. Rohde expressed her appreciation to the FBI and NCDAO for their assistance during the course of this multi-year investigation.

“As alleged, rather than carrying out his plan as promised, Quadrino dangled a shiny prospect in front of his victims while funneling their money into a scheme to defraud others and enrich himself,” said FBI Assistant Director-in-Charge Sweeney, Jr.  “People know there’s risk involved in investing, but they shouldn’t have to start out with the odds stacked against them. Along with our partners, we remind the public how seriously we take offenses of this nature.”

“This defendant is accused of pilfering the savings of dozens of innocent investors by promising them great returns, but instead he allegedly gambled their money away,” DA Singas said. “Fortunately, working with our law enforcement partners at the Eastern District of the U.S. Attorney’s Office and the FBI, we were able to end this alleged Ponzi scheme before more investors were victimized.”

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of the offense, the defendant faces a maximum sentence of 20 years’ imprisonment per count.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Mark E. Misorek is in charge of the prosecution with assistance provided by Special Assistant United States Attorney Matthew Sotirhos of the Nassau County District Attorney’s Office.

The Defendant

JOHN QUADRINO

Age:  51

Oceanside, New York

E.D.N.Y. Docket No. 17-CR-153 (DRH)

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Investment Fraud: EDWARD J. SERVIDER Pled Guilty to Defrauding Approximately 100 Investors

Investment Fraud

Staten Island Man Pleads Guilty In Manhattan Federal Court To Defrauding Investors Of Over $2 Million

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that EDWARD J. SERVIDER, a/k/a “Nick Halden,” pled guilty to defrauding approximately 100 investors of over $2.4 million through his firm EJS Capital Management, LLC. SERVIDER pled guilty to one count of conspiracy to commit commodities fraud before U.S. District Judge Jed S. Rakoff.

Acting Manhattan U.S. Attorney Joon H. Kim said: “Edward Servider lured investors into his scheme by falsely telling them he had achieved high annual rates of return through his Forex trading. In fact, he never made a single trade or achieved any returns for any of his nearly 100 investor-clients. Instead, he used his investors’ money to pay for personal luxuries like hotels, cars, and an engagement ring. I want to thank the FBI for their great work in putting a stop to this fraud.”

According to allegations contained in the Complaint and the Indictment filed against SERVIDER and statements made in related court filings and proceedings:

In March 2013, SERVIDER set up a retail foreign currency exchange (“Forex”) trading firm, called EJS Capital Management, LLC (“EJS”), in Brooklyn. SERVIDER and his business partner (“CC-1”) ran EJS from March 2013 through July 2014. EJS employed salespeople (“cold callers”) who made unsolicited telephone calls to prospective investors. SERVIDER and the EJS cold callers told prospective investors that their funds would be used to trade in Forex transactions, and provided them with a “performance report” that falsely claimed that between 2010 and 2013, EJS had achieved gross annual returns for its investors of approximately 18 percent, 22 percent, 49 percent, and 77 percent (the “EJS Performance Report”). In truth, EJS had never conducted any trading or achieved any returns for its investors. To sustain the fraud, SERVIDER directed EJS employees to send account statements to the EJS investors, falsely showing positive returns on their investments.

In fact, instead of using the investor funds to execute Forex trading, the majority of the moneys was misappropriated and used to pay SERVIDER and CC-1’s personal expenses and purported business expenses for EJS. For example, SERVIDER used investor funds to purchase an engagement ring, to lease a BMW vehicle for his girlfriend, and to pay for hotel rooms, rental cars, and parking tickets.

SERVIDER, 29, pled guilty to one count of conspiracy to commit commodities fraud, which carries a maximum term of five years in prison and a maximum fine of the greatest of $250,000, twice the gross gain from the offense, or twice the gross loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

SERVIDER’s sentencing is scheduled for July 27, 2017, at 4:00 p.m.

Mr. Kim praised the work of the FBI, and thanked the U.S. Commodity Futures Trading Commission for its assistance.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.

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