Frauds, Scams, and Cons Involving Banks and Money Transmission: From Shares in the Drake Estate to Jamaican Lotto!

Transcription

1 Frauds, Scams, and Cons Involving Banks and Money Transmission: From Shares in the Drake Estate to Jamaican Lotto! Presented by: Keith A. Gauer Davenport, Evans, Hurwitz & Smith, LLP Davenport, Evans, Hurwitz & Smith, LLP

2 Confidence Scams or Schemes Confidence scam defined Genesis of the phrase con man Myra Maines and the annual DEH&S con

3 Sir Francis Drake

4 Oscar Hartzell ( ) native of Madison County, IA

5

6 From: Fiona Clarke Sent: Thursday, January 17, :17 AM To: Keith A. Gauer Subject: Estate of Anthony Gauer. Reference NTMZLAD Keith Gauer, Po Box 1030, Sioux Falls, SD 57101, USA. Old fraud, new easier means to perpetrate Good day. This message is about a multi million pound inheritance you may be due. We know it may come to you as a shock, however we write in relation to your relative Mr. Anthony Gauer, who died on 22nd of August 2006 when a Russian plane he was traveling on crashed in Ukraine. Visit the sites below to read about the incident Since you may not know him personally, he was until his death a director of oil company in Russia and amassed a huge fortune that has remained unclaim since his death. It's been difficult finding a relative of late Mr. Gauer as he was an only child and never married. If you are interested in collecting your inheritance, get back to me promptly so we can start the paper work of transferring his estate to you promptly. The transfer process should take just a matter of days as we have already started the probate process. Please accept our sympathy at your loss as we hope to work with you to transfer the estate to you as quickly as possible. Note that our services does not cost you a cent upfront as we are paid 10% of the estate we help you recover at the end of the service. We await your response. Regards, Ms. Fiona Clarke Senior Researcher Bentley Genealogical Investigators

7 Computer Lock FBI Impersonation

8 OCC Impersonation

9 Jamaican Lotto Scam Jamaica victimless crime High Poverty and Unemployment Close Proximity to US and generally English speaking population Scam is a classic confidence scheme Postcard or letter Response puts victim on hit list Prey on popularity of lotto/games of chance amongst elderly

10 Convince victim that they have won the lotto Processing or handling fees and Jamaican taxes. Each payment leads to requests for additional servicing fees, charges, etc. Become their friend by asking personal questions and gaining their confidence through use of personal data. Impersonate sweepstakes and government officials Backed by organized crime syndicates in Jamaica. Funds sent by check, prepaid card, even cash. Fear of embarrassment underreporting of true costs of scam. Federal Trade Commission complaints about the scam jumped from 1,867 in 2007 to almost 29,220 in 2012.

11 Tax Refund Transfer Frauds Tax Refund Fraud Large issue in 2011 tax preparation season in 2012 Fraud starts with identify theft Fraudulent tax preparation services Phishing schemes Use of Dead taxpayers TINs Use Stolen identity to set up a financial account Traditional Bank Account Prepaid Card Account Tax Return prepared using number Refund transmitted to new account Funds quickly removed via ATM or merchant transactions (collusive at times)

12 FINCEN and IRS working on problem Too late in many respects Prepaid companies determined fraud and refunded money electronically IRS cuts a check and mails to fraudster. IRS pledged to fix in FINCEN/IRS Guidance (FIN 2013 A001) Multiple direct deposit tax refunds for different individuals to one account. Suspicious or authorized account opening on behalf of individuals who are not present (primarily elderly, minors, prisoners, disabled, deceased, etc.) followed by tax refund direct deposits Single individual opening multiple accounts in different names but having the same address Business or individuals depositing tax refund checks for others inconsistent with normal business or personal banking history Multiple other unusual situations described in guidance

13 Prepaid Cards and Refund Fraud Multiple cards associated with the identical factor such as SSN, address, , phone, In particular, multiple prepaid cards sent to same or similar controlled address! Green Dot example Address changes immediately after issuance Activity indicating account holder is mule for fraudulent refund transfer work from home classified ads are often looking for money mules to open cards/accounts to move money Prepaid Card Programs should have strong CIP, monitoring and follow up programs to detect and stop fraud

14 Lessons Learned Cons may be easier in the age of the internet. No face to face time required No geographic boundaries Electronic flow of money difficult to track and nearly impossible to recover Under reported. Fear of embarrassment Persecution difficult

15 Advice to Bankers The scammers, hackers and cons are out there and their methods change daily! Many scams repeat with modest changes Elderly, infirm, disabled, vulnerable most at risk Electronic money transmission almost always involved Beware of official looking documents Never call numbers provided on material If engaged in national products, develop a plan Report suspicious activity as appropriate

16 U.S. officials have revealed that America is ready to launch cyber attacks of its own. We have a program that can totally crash someone's computer. It's called Microsoft Windows. -- Jimmy Fallon

17 For more information, contact: Keith A. Gauer (605) Davenport, Evans, Hurwitz & Smith, LLP