Proud, Bragging Spammer Alan Ralsky Pleads Guilty

from the about-time dept

Remember Alan Ralsky? He was the super proud spammer that way back in 2002 gave a defiant and proud interview with his hometown paper, the Detroit Free Press, where he showed off his home and other expensive purchases, all paid for with spam -- which he insisted was "the greatest business model in the world." So what happened? Well, the folks at Slashdot used the info in the article to figure out where he lived and started signing him up for a ton of snail mail marketing offers, overwhelming his actual mailbox. Rather than recognizing the irony, Ralsky flipped out. Apparently, it's only the greatest business model in the world when you're not on the receiving end.

It definitely took a while, but the law finally caught up to Ralsky, and he learned that "the greatest business model in the world" is actually called fraud -- and it can put you in jail. The FBI started investigating Ralsky in 2005, but he wasn't actually indicted until 2008. And, the latest news is that he's agreed to plead guilty and could face both jailtime and fines for wire fraud, money laundering and violations of the CAN SPAM Act (wow, it does sometimes work!). Of course, since Ralsky's time, spammers have gone underground and overseas. The era of the great proud American spammer who courted the press seems to be over.

Filed Under: alan ralsky, fraud, spam

So-Called 'Friendly Fraud' On The Rise

from the what's-so-friendly-about-it? dept

Credit-card companies are looking to new technology to help them cut down on fraudulent purchases, but online retailers are looking at a slightly different problem. They say that "friendly fraud" -- when a customer purchases an item, then later disputes the purchase -- is on the rise. It's not clear exactly what's "friendly" about this kind of fraud, but it usually entails a customer ordering an item, then saying they never received it, or claiming they were sent the wrong item. Travel site Expedia says it runs into the same problem, with people purchasing travel services, then claiming -- after they've taken the trip -- that they never made the purchases. The companies are getting a bit wiser, doing things like taking photos of shipments before they're sent out, and it sounds like most people back off their claims once they're presented with some evidence of just how easy they are to debunk. The retailers cited by the WSJ seem to be saying that this is a manifestation of buyer's remorse, with people looking for a way out from credit-card purchases they've made, but that seems pretty generous. It's a little odd, since it sounds like they try to handle this stuff pretty gingerly and not upset the customers by accusing them of fraud and theft, and then using the "friendly" moniker. Friendly or not, fraud's a growing problem for online retailers and credit-card companies.

Filed Under: fraud, friendly fraud

Visa Tests New Anti-Fraud Card Device, But What About The Data Leaks?

from the finger-in-the-dike dept

Visa is testing a new type of credit card that's got additional security measures built in as a means of cutting down on "card not present" (CNP) fraud -- the fraudulent sales rung up using stolen credit-card numbers and the security codes that are normally printed on the cards. Visa's new cards have a small screen on the back that displays a six-digit code when the cardholder enters a PIN on the card's keypad, making it sound like Visa has basically built in a tiny version of something akin to the SecurID, a popular two-factor authentication device for corporate computer networks. The devices generate an additional one-time password using an algorithm synced with the system on the other end; the user enters this password when they attempt to log on, or in Visa's case, make a CNP transaction. If the passwords match, the transaction goes ahead. It sounds like a good way to cut down on CNP fraud, but is it just a way to try and gloss over the massive data leaks that see millions of credit-card numbers lost out into the world? It almost seems that if these new anti-fraud cards make it to market, the party line will be "the data leaks don't matter anymore" -- but criminals will still be able to obtain credit-card numbers and make fake cards with the stolen info (for card-present fraud). It might make criminals' lives a little more difficult, but it won't make credit-card fraud impossible. Raising the level of security on credit cards is, without question, a good thing. But unless it involves doing more to stop massive data leaks, it's not enough.

Filed Under: anti-fraud, credit cards, fraud
Companies: visa

Not At All Surprising: TARP Is Ripe For Fraud

from the gee...-you-think? dept

One of our complaints with the massive outlay of government spending through things like TARP and the "stimulus plan" is that they were both rushed through with little thought or oversight -- and no chance for those outside of Washington to weigh in on those plans. I'm not necessarily against all such spending, but history has shown that rushing into such spending without having a chance to think through the details is a recipe for disaster. Already, we've seen that the government has massively overvalued some assets and that the promised "transparency" has been lacking. Now, even the guy in charge of making sure that the TARP program isn't abused is admitting that, with the way it's been set up, the program is ripe for fraud. He's expecting the government to be bilked out of tens of billions of taxpayer dollars in criminal schemes, and notes that less than 5% of those receiving funds from TARP have fulfilled their obligations in letting the government know what's been done with the money. I keep hearing that the government had to do something, but that doesn't mean we needed to hand over trillions of taxpayer money in such a haphazard fashion.

Filed Under: fraud, tarp

Latest Massive Fraud: Satyam Found To Be Swimming Naked

from the tide-goes-out dept

Warren Buffet's famous quote is that "It's only when the tide goes out that you learn who's been swimming naked." Over the past few months, the tide has been going out with a vengeance, and we're certainly discovering plenty of folks swimming naked. The latest, of course, is Satyam, the Indian tech company whose CEO admitted that he basically has been making up the company's financial reports for years. It turns out that about $1 billion in cash the company claimed it had... don't actually exist. That's a pretty big problem, because that $1 billion represented about 94% of all the cash the company claimed to have. Oops. It makes you wonder what, exactly, Satyam's auditors have been up to the past few years.

This might explain why the company attempted to do a highly controversial merger deal last month, where Satyam tried to buy construction firms Maytas (Satyam backwards), owned by the sons of Satyam's founders. The deal between companies in two obviously unrelated industries seemed like a pretty clear cash grab for the family -- except most people didn't realize that the cash grab was actually to cover up all the lies on the financial statements.

Of course, there are some amusing side notes to this whole thing. Just a few months ago, for example, Satyam was awarded the "prestigious" Golden Peacock award for (of all things) corporate governance. That award is now being stripped away, but it seems a little late for that. Then, of course, there was the stock analyst who claimed that Satyam was an obvious buy just after the original merger deal fell apart. Considering that the stock dropped 90% today, that seems like an awfully bad call.

Anyway, as with any downturn, it's no surprise that some of the scammers are being outed. It certainly doesn't mean that all companies are scamming, but it is a reminder that unless you're personally involved, it's pretty tough to take a company's word on what it's actually been doing with its money.

Filed Under: fraud
Companies: maytas, satyam

Trying To Understand: Facebook's Lawsuit Against Power.com Makes No Sense

from the help-me-out-here... dept

Facebook has apparently sued social networking aggregator Power.com for a variety of things, including copyright and trademark infringement, unlawful competition and violation of the computer fraud and abuse act. I'm having trouble seeing how Power.com violates any of these things. Power.com, like plenty of other aggregator services, lets you bring together all your different social networking profiles in one spot. That seems like it could be valuable if you use a lot of those services. It doesn't do anything fraudulently, and it does not appear to misrepresent that it is a separate service. Users have to decide whether it's worth providing their username and password to Power.com, but it's not as if Power.com tricks anyone into doing so or does so in a misleading way. There's no confusion, so it's difficult to see what the trademark problem is about. It seems like a pretty big stretch for Facebook to also claim that showing the content from a user's profile is copyright infringement as well. Computer fraud? Please. Unlawful competition? Again, it may be (slightly) competitive, but it appears to actually improve the value of Facebook, rather than diminish it.

This is a pretty weak response from Facebook. Basically, it looks like Facebook trying to exert undue control over what other websites and services can do, and it's not clear that it has any real legal basis for doing so. It's a shame that a company like Facebook is becoming a legal bully at such a young age. I would have expected better. In the end, though, if Facebook keeps up actions like this, it will only hasten the shift to other social networks that don't try to limit what their users can do. Facebook might want to take a lesson from the eventual flop of Friendster after that social network was accused of being too controlling.

Filed Under: aggregator, copyright, fraud, trademark, unlawful competition
Companies: facebook, power.com

Fry's Exec Funnelled $65 Million To Himself For Gambling Debts

from the want-to-know-why-Fry's-is-expensive? dept

Silicon Valley folks certainly know Fry's -- the electronics superstore that's probably as well known for its poor customer service as its vast selection. However, apparently a top exec at the company, who had worked his way up over the course of 20 years from a starting job as a floor sales guy has now been arrested for a massive fraud, creating kickbacks from vendors and potentially defrauding the company of over $65 million -- much of it used to pay off gambling debts (apparently he still owes a lot more -- potentially another $100 million from the sound of it) incurred by frequently taking the Fry's corporate jet to Vegas. The guy basically set up a separate front company that he funneled millions of dollars to in the form of exorbitant commissions and kickbacks from vendors. Apparently, while Fry's makes you go to hell and back to justify returning a computer component, its own internal auditing process missed $65 million going out the door.

Filed Under: ausaf umar siddiqui, fraud
Companies: fry's

Perhaps Wall St. Really Is Just One Big Ponzi Scheme

from the finding-that-last-sucker dept

While we've always been pretty skeptical of the way Wall St. worked, at least it seemed like there was some semblance of reality on which it was based -- even if much of that foundation was a rickety house of cards. Yet, with the revelations coming out about Bernard Madoff's potentially $50 billion fraud, it makes you start to wonder if anything on Wall Street is real. Madoff admitted yesterday that his entire firm was "one big lie" and "basically, a giant Ponzi scheme." It appears that rather than paying investors back based on profits they earned, he was pulling money out of the principal from other investors -- and now there's basically nothing left. Not surprisingly, the firm's website touted Madoff's "high ethical standards." What's even more astounding is that no one happened to notice this was happening until he 'fessed up. At a time when one of the biggest things missing in the market is confidence, this is not going to help. Yes, there is some reality backing at least some of Wall Street, but people are going to have an increasingly difficult time figuring out what is real, and that's not going to encourage much investment. Conceptually, what Wall St. does is provide a very useful service for putting money to use where it's best needed as investment capital. In reality, it looks like there was an awful lot of fraud baked into the system. That's not good for anyone, and the fallout from this is not going to be pretty.

Filed Under: bernard madoff, fraud, ponzi scheme

How To Steal The Empire State Building

from the 90-minutes-and-a-fake-stamp dept

Consumerist points us to a story about how The Daily News newspaper in New York was able to quickly forge some documents and get the deed to the Empire State Building handed over, no questions asked. Apparently, there's really no verification process at all. As the paper points out, while most folks probably would notice this with the ESB, for plenty of other buildings it's an effective scam for someone who wants to take out a bogus mortgage (and then disappear). You would think, in this day and age, there would be a somewhat more involved process and checks before simply handing over the deeds on any building, let alone a landmark like the Empire State Building.

Filed Under: empire state building, forgery, fraud

Fake Engineer Tries To Get Lighter Sentence... By Faking References

from the there's-dumb-and-then-there's... dept

Well, here's a fun one. A guy who was found guilty of faking his credentials to get a job as a maintenance engineer for the airline Qantas tried to get a lighter sentence by submitted four sterling references. But... it turns out that those references were faked as well (found via the Raw Feed). The guy didn't even do a particularly convincing job faking the references either. All four were formatted the same way and signed by the same hand, and one was from the president of a sports organization... that didn't even exist. You would think, in the age of the internet that people would assume that making up entire organizations wouldn't be particularly effective.

Filed Under: fraud, lying
Companies: qantas