Are 419 Victims Guilty Of Fraud If They Recruit Others?

from the legal-questions dept

One of our readers, Stack, sent in a link to this story about an Australian couple arrested for their participation in recruiting others into a Nigerian 419 scam. Stack suggested in his submission that it was a case of a 419 victim who, having "learned" the scam then turned around and started scamming others. But, from the description I'm not so sure that's the case. Instead, it sounds like the couple was really convinced that the scam was real, and merely convinced others to join in the scam, as well, in order to collect the "necessary" money to free the (non-existent) millions in Nigeria (or whereever this particular scammer claimed the money was).

This raises some interesting questions. If my read is correct, then the couple in question certainly didn't profit from the scam at all, and didn't even know they were being scammed. As we've seen in the past, victims of 419 scams are often so convinced by the scam that even when the whole thing is explained to them, they still believe the scammers are willing to give them money -- something that's been found to be true in historical scams like the infamous Drake's Fortune.

However, if that's the case, the couple in question didn't know it was a scam, and wasn't directly profiting from getting others involved (though, they ignorantly thought they were). So... are they victims or are they scammers? Or both?

Filed Under: 419, advance fee, australia, blame, nigeria, scams, victims

The Ethical (And Mathematical) Dilemma Of Madoff Investors Who Took Some Money Out

from the what-to-do? dept

With respect to the Bernard Madoff scam, I'd been hearing plenty of people ask "where did the money go?" since there's none left. The answer has always been pretty straightforward: as a Ponzi scheme, much of the money went back out to the earlier investors who took some money out. The rest was probably invested in various investments whose value has gone down to almost nothing in the last few months. However, this is apparently creating something of a quandary for some of those early investors who took money out -- but still had some money (theoretically) still with Madoff. Should they apply for aid from the Securities Investor Protection Corp?

SIPC acts like an FDIC for these types of investments, helping to protect investors in cases of fraud. But some are realizing that if they took money out from Madoff over the years (and some did so profitably), if they go ask for money from the SIPC, it could alert regulators to the fact that they profited from Madoff's scam -- and they could suddenly owe the "profits" they had taken out in the past. The Feds can demand that those who profited from Madoff's scam return the money -- but that will involve actually being able to track them down. For some "victims," it may be better to just keep what they have, keep quiet, and forget what they thought they still had invested with Madoff. But there are concerns for others who have already admitted to cashing out (sometimes a long time ago), are they suddenly going to be forced to return the money they took out of their accounts?

Filed Under: bernard madoff, ethics, profits, scams

FTC Shuts Down More Bogus Spyware Scan Companies

from the here-we-go-again dept

A few years back the FTC shut down some scam fake anti-spyware companies that would advertise "free scans" of your computer and would then (of course) tell you you had spyware. The scam, of course, was that for a fee of only $30 or $40, you could buy their "software" that would supposedly rid your computer of spyware. Of course, your computer probably didn't already have spyware, and the software you bought certainly wouldn't do anything towards ridding your computer of any actual spyware. It looks like some new scammers have picked up where the old ones left off, because the FTC is announcing, yet again, that it's been able to shut down some bogus anti-spyware operations. Apparently, this operation was slightly more scammy, because advertising networks have stopped accepting ads for such bogus anti-spyware. So, instead, they pretended to place ads for legitimate companies, but then used some code to swap out the "good" ad with the bogus anti-spyware ad.

Filed Under: ftc, scams, scans, spyware

Are Copyright Holders Purposely Putting Content On P2P In Order To Demand Money?

from the that's-what-we-call-extortion dept

We've discussed the highly questionable activities of UK law firm Davenport Lyons for its supposed campaigns on behalf of various copyright holders. From what we had seen, the firm wasn't particularly interested in actually protecting content from being shared online -- only in threatening as many people as possible with "pre-settlement letters" to get them to pay up to avoid being sued. This certainly feels like what's commonly called extortion, especially, as it came to light that the pre-settlement letters are being sent to many innocent bystanders. Since this is a business model issue (squeezing individuals to pay up) rather than actually being about protecting copyright, it's no surprise that the pre-settlement letters would be sent as widely as possible, even if there was no actual evidence showing guilt.

However, the situation may be even worse than originally suspected. In an article about Davenport Lyons' latest client, TorrentFreak notes that the copyright holder may be contracting with a company to purposely spreading the content on file sharing networks for the purpose of making it easier to find people to threaten with pre-settlement letters. There are a number of different players involved here, but basically, copyright holders are licensing the copyright on various movies to a firm called DigiProtect. DigiProtect, in turn, hires Davenport Lyons to send out the pre-settlement letters. But in a leaked contract between DigiProtect and one copyright holder, it's made quite clear in the contractual language, that DigiProtect is expected to upload the movies as widely as possible prior to having a law firm send out the pre-settlement letters:

To achieve the purpose outlined in clause 1, LICENSOR grants DIGIPROTECT the exclusive right to make the movies listed in Appendix 1 worldwide available to the public via remote computer networks, so-called peer-2-peer and internet file sharing networks such as e-Donkey, Kazaa, Bitorrent, etc. for the duration of this agreement

In other words, it's quite clear that this has nothing to do with preventing content from getting on file sharing networks. Instead, they're specifically putting it there themselves, apparently hoping to get it as widespread as possible, in order to send out the threat letters more widely, so they can collect on the "settlements" from people scared that they're about to get sued. It's hard to see how that's not a massive abuse of copyright law.

Filed Under: copyright, extortion, pre-settlement, scams
Companies: davenport lyons, digiprotect

Scammers Run A Trucking Company With No Trucks

from the the-magic-of-computers dept

You have to admit that there are some creative scammers out there. Take, for example, a group of Russian immigrants, who used their hacking skills to effectively run a trucking company that didn't exist. They would hack into a Department of Transportation website that listed licensed trucking firms to change the contact info (temporarily) on certain firms to their own address and phone number. Then, they would go to another online site that listed cargo in need of transportation. They'd pose as the firm whose contact info they'd replaced, get the deal, and then go find another trucking firm to actually deliver the cargo. The cargo itself would get delivered, and the scammers would contact the original cargo owners to get paid. Then, the company that actually delivered the cargo would contact the company these scammers pretended to be working for, and discover that it had no clue what they were talking about. Apparently, this scam was effective enough to net the scammers over a half-million dollars. Of course, it wasn't effective enough to keep them from getting arrested.

Filed Under: man in the middle, scams, trucking

Massive Stolen Credit Card Number Site Shut Down

from the good-work dept

It took quite some time for authorities around the world to recognize the extent to which organized crime was using the internet for various scams and frauds, but in the last year or so, it seems like many agencies around the world really are looking to go after the criminals. The latest example is that Darkmarket, an invitation-only secretive forum for buying and selling credit card numbers, has been shut down, and 60 people involved with the site have been simultaneously arrested. This is definitely a step up from what we were hearing just a couple of years ago, where the best authorities could do was arrest kids messing around with phishing scams, rather than actually going after the organized criminals who were the real issue. Cracking down on one site and arresting 60 individuals isn't going to stop these scammers, but it's at least good to see authorities trying to focus on the real problem cases, rather than just the small fry. Update: As was pointed out in the comments, it appears the original BBC article we relied on has the story a bit wrong. The site itself was actually an FBI-run honeypot. So, while the site was taken down, the story of how the whole process worked is quite different than what was implied in the first article.

Filed Under: arrests, credit cards, darkmarket, forums, organized crime, scams

Latest Nigerian Email Scam: Renters Checks

from the sneaky,-sneaky,-sneaky dept

It's been quite fascinating, over the years, to see how the various "Nigerian" scammers have adapted and evolved their strategies. While variations on the originals exist, over time we keep seeing new scams show up. They started, obviously, with the traditional 419 "advance fee" scam, asking you to help them get more money out of Nigeria. Then, they morphed by paying attention to current events and making the scams more closely related to events happening in the news. Then there was the scam where they would buy something on eBay, but send a forged check that was much, much higher than the purchase price, asking you to send back the difference. Of course, the victim would only find out later that the check was a fake and that he had been cheated out of all the money sent (as well as the value of the sold item). Then, they started combining phishing and advance fee scams, to make you think your friends needed money wired urgently to Nigeria. Oh, and who can forget when they started a scam that didn't prey on the victims' greed, but their love of cute puppies? Awwwwww...

The latest is that they're placing ads for apartments to rent in high rent districts, and then asking prospective tenants to do a money transfer to a friend or relative to prove you have the money available. That seems legit -- and since it's to a friend or a relative, the prospective tenant knows that the money is safe. Except, once they've forwarded on a scanned copy of the transfer payment receipt, the scammers go to the bank pretending to be the recipient and withdraw the money. It's a bit more complicated, but again, it's a scam where the victim is easily tricked because there doesn't seem to be anything wrong with what's happening.

Filed Under: 419, advance fee, nigeria, rent checks, scams

Using Google Suggest To See If A Company Is A Scam

from the neat-tricks dept

Jeremy Wagstaff has a neat little trick to determine if a company contacting him is likely to be a "scam" of some sort. He just types the name into the Google search bar in Firefox and lets the "Google Suggest" feature take over. Google Suggest, of course, tries to suggest what you might be searching for based on the most common searches done on what you've already started typing in. For some companies, Wagstaff has noted that many of the top results are the name of the company and "scam" or something equally questionable. It's a neat trick, though, as Wagstaff wonders, how long will it be until those companies hire "media specialists" to come up with ways to scrub the Google Suggest results. In the meantime, I'm curious when Google will end up getting sued for such a suggestion. You can bet that some company will try to twist Google Suggest into saying that Google is responsible for the implication from the suggestions, rather than the collection of Google users and their searches.

Filed Under: google suggest, scams
Companies: google

Washington State Sues Company For Fake Error Messages

from the that-old-scam? dept

For years, questionable "software" firms would buy up ads that pretended to look like computer warning messages telling you that your computer was at risk. Then there were scamming companies that would include a web-based "test" of your computer to see if it was at risk -- and, of course, it always found that you were. The scam is just to get you to download (and buy) their software which rarely does anything (and most of the time you don't need it). The FTC had cracked down on these companies a while back, but it appears at least some are still in business. Washington state is now suing a software company that apparently did something similar sending messages to computer users claiming "CRITICAL ERROR!" and demanding that they download the company's product immediately to repair the problem. Of course, there was almost never an actual problem... but the software cost $40.

Filed Under: error messages, scams, software, tricks, washington state

Company Wants To Patent Automated Pay-Up-Or-We-Sue Pre-Settlement Letters For File Sharing

from the by-a-cigarette-company? dept

Well, well, well. The latest story about a "solution" to the "problem" of piracy has an interesting twist to it. A company named Nexicon, claims that it's about to launch an automated piracy tracker/payment collector. It says that it's able to watch various file sharing systems, tracking who's sharing and downloading unauthorized files -- and then sends them an automated letter demanding they pay up, including a "convenient" one-click payment system where you can settle up via your credit card or PayPal. Even better, the company claims that it's trying to patent this method, which is hardly new or unique (and, you have to wonder if Nexicon is paying Amazon a license for using "one-click" payments -- as the company even seems to brag that it copied Amazon's one-click solution).

There are plenty of questions raised by this. First, if it's actually put into use as described, it would be the first time we see the industry attempting to target downloaders as opposed to uploaders. All of the various lawsuits and pre-settlement letters have always targeted those who share the unauthorized content. But the article claims this will go after downloaders (though, it's not entirely clear how they'll know who actually downloads the file). Then, of course, there's the whole extortion question of demanding payment to avoid a lawsuit -- especially when the actual evidence may be rather flimsy.

As for the patent application (which a casual search did not turn up), it's hard to see how copying the same strategy that's been used for years by the recording industry, merged with the already-questionably-patented Amazon 1-click method is somehow patentable.

Oh yeah, there are also some questions about Nexicon itself. Just last week the company announced a deal with YouTube to provide some audio fingerprinting technology -- at which point Wired pointed out the rather bizarre history of Nexicon. It started out as an online cigarette seller, that got sued for taking orders from kids, falsely advertising cigarettes as being tax-free and then (not surprisingly) failing to report taxes. Then there were the problems with the SEC over not filing its tax returns on time as well as questionable activities in some sort of reverse stock swap merger. Oh, and did we mention at one point the company was going to be a portal? These are the folks who are going to be popping up automated messages demanding you pay up for downloading a Frank Zappa tune?

Filed Under: copyright, extortion, pre-settlement, scams
Companies: nexicon