Ransomware Scams Netting Criminals Up To $33,000 a Day

Ransomware pays. A lot. These extortion scams, in which infected computers are essentially locked down by malware and electronic payment is demanded for a supposed cure, can net the criminal behind the scam as much as $33,000 per day.

Symantec studied 16 variants of independently developed ransomware over the last two years and found the potential for stunning profits and a surprising willingness on the victim’s behalf to pay up. While these schemes had been limited initially to Russia and the rest of Eastern Europe, more of it has been discovered in the United States and Canada.

“Given the number of different gangs operating ransomware scams, a conservative estimate is that over $5 million dollars a year is being extorted from victims,” wrote Symantec researchers Gavin O’Gorman and Geoff McDonald in a report “Ransomware: A Growing Menace.” “The real number is, however, likely much higher. From just a few small groups experimenting with this fraud, several organized gangs are now taking this scheme to a professional level and the number of compromised computers has increased.”

The most common ransomware involves malware that disables a computer and puts up a banner claiming to be from local law enforcement. The malware determines the geo-location where it has been downloaded and customizes the law enforcement message accordingly. For example, infected computers in the U.S. will display a message purporting to be from the FBI. The scam claims the user has viewed or downloaded copyrighted or illicit material and must pay a fine in order to have their computer restored, or face arrest.

Victims were required to pay their “fines” via a prepaid electronic payment system that required them to purchase a special PIN from vendors such as Moneypak, Paysafecard or Ukash; that valid PIN is the fraudster’s ultimate target.

Users are infected most commonly via drive-by downloads where popular websites are infected with a malicious advertisement or iFrame connecting to the criminal gang. Most of these scams target pornographic websites, Symantec said, and the ransomware locks the victim’s computer and puts up a message about viewing prohibited images. Payment of $200 is required within 72 hours, the scam demands. The criminal is counting on the victim to pay up to avoid the embarrassment of being caught viewing pornography, Symantec said.

“This payment PIN will then be sent by the ransomware to a C&C server where the attackers can retrieve it,” the Symantec report said. “At this point, the attackers should honor their promise and send a command to the ransomware telling it to uninstall itself. Unfortunately, this rarely happens. In actuality, many of the ransomware variants do not even contain the code to uninstall themselves.”

The victim must have his computer cleaned of the infection. The criminal, meanwhile, launders the stolen PIN, either trading it in an online forum, or using it to gamble online or buy exploit packs, Symantec said.

The profit potential is noteworthy. Symantec watched one particular variant of the Ransomlock Trojan from September through October and saw 68,000 unique IP addresses connecting to the command and control server; 5,700 in one particularly busy day. Of the 5,700, 168 PINs were entered resulting in $33,600 in revenue, a 2.9 percent turnover—that’s almost $400,000 in one month.

“This recent increase in variants may be related to established online criminals branching out into ransomware from other scams,” Symantec said.

In August, the FBI warned of a similar scam involving the Reveton malware, which was related to the Citadel banking Trojan. Reveton included a fake FBI warning that the victim’s IP had been linked to child pornography. The FBI said some people paid up and still required help removing the malware, which in some cases also included a keylogger.

What Columbo Can Teach Us about Internal Investigations

When conducting investigation interviews, take a hint from Lieutenant Columbo, who always got to the bottom of things, even when the odds were stacked against him. His humble, conversational style of questioning put his subjects at ease and enticed more than a few people to spill the beans.

One of Columbo’s signature tactics was his slow and measured way of engaging the subject and building rapport with questions that would “help him to understand” the case. His frequent “oh, and just one more thing” questions as he was leaving a room often pinpointed the very fact on which the case hinged.

Expert investigator and member of the ASIS Investigations Council, Timothy Reddick, CPP, PCI, CFE, likes Columbo’s approach to questioning suspects. He gives the “help me understand” tactic as a fine example of how to draw information from a witness or suspect. Reddick, who was director of fraud and special investigations for the city of Philadelphia before he retired, has many years of interviewing experience from which to draw his conclusions about successful approaches to evidence-gathering.

Never Accuse

The Columbo approach, says Reddick, is friendly and non-confrontational, almost apologetic. “Sorry I have to ask this,” Columbo used to say, eliciting a sympathetic reaction and often an honest answer from the subject.

You need to establish rapport, explains Reddick. “Act like you believe them,” he advises. “That’s how you develop rapport.” Instead of questioning something you don’t believe, ask for clarification. Again, it’s the “help me understand” approach that Columbo used so successfully, never taking on an accusatory tone.
The non-confrontational interview will get you to the truth more often than other methods. Being friendly, establishing rapport and stressing that you are just trying to help to clarify things, is an effective tactic, says Reddick.

Othello’s Error

Another very good reason to give the impression you believe your subject, even if you don’t, is to reduce your chances of committing what is known as “Othello’s Error”, a phrase coined by Paul Ekman in his 1985 book, Telling Lies. According to Ekman, this error occurs when a suspicious observer discounts cues of truthfulness, given the observer’s need to confirm his or her suspicions of deception. The “lie catcher” fails to consider that a truthful person who is under stress may appear to be lying.

“If someone perceives that you don’t believe them or you accuse them of lying, then sometimes their behavior adapters will be the same as someone who is being deceptive. So behavior adapters then become unreliable,” says Reddick. By giving the subject the impression that you believe him or her and using a non-confrontational approach, you can reduce his or her stress level and be better positioned to read any signs of deception.

Unfortunately, sometimes people have the perception you don’t believe them even when you are being non-confrontational. In these cases you have to remember that those adaptors may be unreliable, says Reddick.

Don’t Assume

“If you think you know whether or not they are lying, you are going to be deceived at times,” says Reddick, citing the many myths people rely on to detect deception, including the myth that a subject who avoids eye contact is being deceptive.

“I spent 15 years overseas and there are a lot of cultures that avoid eye contact whatsoever, because looking you straight in the eye is aggressive. And even here, there are lots of people who are very good at deceiving who know the eye contact ‘tell’ and intentionally use it to deceive,” he says.

So if you really want a subject to tell you what you need to know, take a lesson from Columbo. Go into the conversation with an open mind and get the subject to help you “understand”, to “clarify things” for you, and to enlighten you about “just one more thing”.

Computer users warned of ‘Ransomware’ scam

Authorities are warning the public about a cyber scam that locks users out of their computers and attempts to scare them into paying a “ransom” to regain control.

Ransomware is a type of malicious software, or malware, that freezes the computer and activates a pop-up message demanding that the user pay a fee or fine to unlock their computer.

Some of the pop-ups use police logos and claim to be from the RCMP, CSIS or other law enforcement agencies, with messages warning users their computers have been associated with child pornography or illegal music downloading, according to the Canadian Anti-Fraud Centre.

“These types of messages are scams designed to create shock and anxiety so that victims respond by sending money quickly,” the centre said in their website.

Acting Sgt. Kathy Macdonald with the Calgary Police Service’s crime prevention unit said the police would never communicate with the public in that manner.“They would never ask for fines to be paid in that way. That’s not how police organizations work,” she said. People may fall victim to the Ransomware scam by clicking on links or opening phishing e-mails, she added.

The scam has been around since 2006, hitting Europe hard, then making its way to Australia, the U.S., and finally Canada, said Daniel Williams with the Canadian Anti-Fraud Centre.

Since March, the centre has received 10 reports out of Calgary, including one who paid the $100 “ransom” via Ukash, an online payment service provider, he said. In the most recent case Oct. 19, the scammers used the name “Cybercrime Investigation Department of Calgary,” he added.

In Lethbridge, about half a dozen calls were made to police in the past few months, said Const. Kevin Althouse with the Lethbridge Regional Police Service’s economic crimes section.
Williams said victims might be reluctant to report the scam for fear they’ve been looking at or doing the wrong things online and don’t want to be caught.

Police are warning victims not to send money, to contact a computer technician to repair the virus or malware, and to report the incident to the Canadian Anti-Fraud Centre at www.antifraudcentre.ca or 1-888-495-8501.

Computer users are urged to protect their machines by installing software updates, backing up their data and using a firewall, antivirus or spyware program.


Read more: http://www.calgaryherald.com/Computer+users+warned+Ransomware+scam/7448425/story.html#ixzz2AVy0UMYF

A Message From a Former Student

I wanted to inform you that I have become a victim of a scam that has been going around, the last couple of days, and thought I would inform you of it, as many of your students are probably paying off or will be paying off student loans.

Please be aware of any company that calls from Tricura Canada, they will call and inform the former/current student that they are calling on behalf of the Student Loan Centre, and that it is important that you call them back, and that there hours are from 7:30am to 11pm in your region (They never specify the region). That centre would have to be open 24hrs.

This is the number that they leave 1-866-788-0288, and after doing research on the internet, there are blogs/forums stating not to call this number and that it's all a scam.

I haven't had any student loans in over 10yrs, and this made me very suspicious of their credibility and authenticity. They got my number through my brother in-law, which they got from the phone book. I wasn't even married when I went to college at that time, so I was still under my maiden name. It was a fluke that they just so happened to pick my brother in-laws name, as he would be listed first as his first name starts with an A, and who knows how many others they tried.

If your students have a student loan the only people that should be contacting them is their financial institutions, or the government department, National Student Loans Services Centre (Canlearn).

If they get a call from Tricura Canada, or any other company that is suspicious, please have them contact Toll free:1 888 815-4514 (within North America) and speak to someone from the National Students Loans Services Centre. I have also provided you with their link. https://nslsc.canlearn.ca/eng/contactus.aspx

Please remind to never give out any personal information over the phone, even if it's their bank, unless they call them back themselves. If the person that called them hesitates in give the students the number so that they may call them back, they should be suspicious. If the number is not familiar to the financial institutions that they could get of the site, they should be suspicious. The safest action for your students to do is to call the direct line to the company and ask to speak to the manager and confirm if it was an legitimate call from their company.

 

What Was The Internet Originally Called?

In April of 1963 computer scientist J. Licklider published a memorandum on the topic of remotely networked computers entitled “MEMORANDUM FOR: Members and Affiliates of the Intergalactic Computer Network”.

The memo is the first evidence of computer scientists moving towards establishing a geographically distributed network of computers resembling the modern Internet and, for a time, the “intergalactic computer network” nomenclature stuck.

The title fell out of popularity with the introduction of the Advanced Research Projects Agency’s ARPANET in 1969. The term “Internet” to refer to a large network of remote computers would not be put into use until an appearance in a 1974 paper by Vint Cerf and Bob Kahn and wouldn’t be popularized until the early 1990s.

MP REPORT: Ottawa targets fraud

Canada is a generous country to those wanting to immigrate and call Canada their home. Unfortunately, our generosity has been abused by some who have made false claims regarding residency and false statements on their application form.
Minister Jason Kenney has announced that our government is investigating residence fraud with nearly 11,000 individuals potentially implicated in applying for citizenship or maintaining permanent resident status illegitimately.

The minister also announced that the government has begun the process of revoking the citizenship of up to 3,100 citizens who obtained it fraudulently.

In most cases, suspects will use deceitful immigration representatives to fraudulently create evidence of living in Canada while actually living overseas.

This deception is created so that individuals can fraudulently maintain their permanent residence status and later apply for citizenship.

This fraud hurts all Canadians.Those who illegitimately obtain permanent residence or citizenship status have access to taxpayer subsidized education, health care, and other social benefits without ever contributing as a taxpayer themselves.

It also hurts the majority of immigrants who come to Canada, who follow the rules with honesty and integrity.

Minister Kenney has said “Canadian citizenship is not for sale.”

Since the immigration fraud crackdown was launched, 600 former permanent residents have either been removed or denied admittance to Canada.

Another 500 permanent residents have had their citizenship applications denied.

The minister encourages anyone who has information regarding citizenship fraud to call our tip line at 1-888-242-2100, or via email at mailto:Citizenship-fraud-tips@cic.gc.ca

Your government promised to clean-up the abuses of our immigration policies. A promise made. A promise kept.

New BBB Scam Stopper Will Help Consumers Protect Themselves From Fraud

Better Business Bureau and Western Union today launched BBB Scam Stopper, an education campaign to help consumers in the United States and Canada avoid common scams that con artists use to commit consumer fraud.

Consumer fraud is a serious problem in North America. According to the Federal Trade Commission and the Canadian Anti-Fraud Centre, consumers reported losing more than $1.5 billion to all types of scams in 2011.

Western Union has long devoted extensive resources to stopping fraud, including training its agents to intervene if they suspect a customer is the victim of a scam. BBB investigates thousands of scams every year, and tracks scams through reports from consumers and businesses, a number of which use wire transfer.

On the Scam Stopper website, consumers can find facts and tips to stay informed and help reduce their chances of becoming a victim of a scam. The site also explains the science of scams, and how scammers use many of the same “sales tactics” that are used by legitimate businesses. Visitors can also sign up to receive BBB Scam Alerts, weekly emails with the latest scams reported to BBBs across the country.

The site highlights common scams like Emergency Scams (a friend or family member has an emergency, often in another country, and needs money), Overpayment Scams (a buyer overpays and asks for the difference wired back to them), Sweepstakes and Lottery Scams (you’ve won a lot of money, but you have to pre-pay taxes before claiming your prize), and more.

 Personal finance writer/blogger Erica Sandberg has also joined the effort and is blogging and creating public service announcements about scams and fraud for BBB Scam Stopper.
For more information, visit www.bbb.org/scamstopper.

Risks low for Internet scammers

If you consider answering any of the constant tsunami of e-mails offering millions hidden in Africa or elsewhere, I have some fabulous Florida swampland available.

Addressed to “Beloved One,” “Dearest One,” or ever-popular “Undisclosed Recipient,” scammers promise riches in exchange for advance fees.
Once mailed, then faxed, “Nigerian Letter,” or “Nigerian advance fee” e-mail scams now swamp the Internet.

“They very much involve organized crime,” said Det.-Const. Michael Kelly, of the Toronto Police department’s financial crimes unit.

“Dollar amounts are too high and the risks are too low,” compared to robbing banks, he said, adding gangs often use overseas agents to cash victims’ funds and avoid police.
“At least $1 billion a year is lost to mass marketing fraud,” despite educational programs by police, RCMP and federal Competition Bureau staff at six Canadian Anti-Fraud Centre sites, OPP Det.-Const. John Schultz said.

But the CAFC staffer said even that is a a low estimate. By comparing seized “sucker lists” with complaints to police, Schultz said analysts determined “only about 5% of the victims report to us.
“There are a number of reasons,” he said, including embarrassment and people believing police won’t help — especially over small amounts. “But a couple of hundred bucks multiplied by thousands of victims adds up.”

Promised $35 million in 1998, an indebted Toronto bookkeeper sent $2 million in company funds to Nigeria. He was charged. His firm failed. After re-emerging in the 1980s, a century’s-old style of letter scam offering fortunes in exchange for advance fees went viral. Now, via the Internet, senders are based mostly in the U.S., UK, Nigeria, Côte d’Ivoire, Togo, South Africa, Netherlands and Spain.

Most scam e-mailers offering exclusive partnerships include supposed princes, sheiks, ex-military officers, bureaucrats, preachers, lawyers, bankers, oil executives, surviving relatives — and even a purported dying widow who received a message from God to share her fortune. Identical scams flood cyberspace via address-harvesting and bulk e-mail-sending software.
Spelling flubs are common, including:
• “Milloners Club Casino” on a lottery scam script Toronto Police seized recently.
• Several people lost more then $100,000 in a recent Toronto caper that included a bogus $2.6-million cheque with both “Publisher Clearing House” and the correct name, “Publishers Clearing House” printed on the front.

Most people realize foreigners may not be fluent in a second language, but crooks avoid raising suspicions with proper wording, some selling scripts to future scammers without anyone understanding the text. Photos are rarely legitimate.

Documents three recently-convicted Toronto fraudsters had included a bogus Ontario driver’s license bearing an Internet-scalped picture of actress Sarah Michelle Gellar.

While most recipients trash e-mail messages, Kelly said criminals “also do mass mailings,” offering lottery winnings, jokes, religious text, news, stock and crime alerts, and dating and marriage services. Despite many computers having spam-detectors, “phishing” messages seeking money, bank account, passport or credit card information to help supposed friends or relatives are constantly sent.
Even when cash promises crash, some victims reply to requests for more funds to overcome unforeseen problems.

Investigators traditionally regarded greed as a sucker’s failing, but Kelly said many victims “need to believe someone out there loves them” — especially with the leading plague of romance scams that cost Canadians more than $12 million last year. “Victims also say they needed money so badly, to keep the lights on or pay debts,” he added.

Canada has long been home to “boiler-room” bases for targeting Americans, due to heftier U.S. penalties and crooks believing police wouldn’t cross borders.

But Schultz said co-operation and information-sharing increased and the penalties got tougher after President Bill Clinton and Prime Minister Jean Chretien met in 1997.
The long arm of the law now has a longer reach and computer-tracing has improved, according to police.

Lastly, regardless of what is written or said, if an offer seems too good to be true, it probably is.
•People can report thefts or fraud to the Canadian Anti-Fraud Centre at antifraudcentre.ca or 1-888-495-

Inside Job - Gift Card Fraud

October 2012

Gift card fraud exploits security gaps in authorization processes. If your employer or client issues gift cards, do you know the kinds of scams fraudsters might attempt?

A young man walked into a Sony retail store in Central Valley, New York not long ago. With the help of a salesperson, he selected a wide-screen television, a sound system and a laptop. The total cost of these items was nearly five figures.

"And what payment method will you use today?" the salesperson asked as they approached the counter.

"A couple of gift cards," the customer said, presenting them.

The salesperson, who happened to be the store manager, looked at him for a moment. "Let's see how much is on them," she said. Running the first card through a special reader, she squinted at the display, and passed the card through again. After double-checking the second card as well, she told the customer, "Each of these is supposedly worth $5,000." She laid both cards on the counter and wrote their serial numbers on a scrap of paper.

"Yup," the man said. "Everything alright?"

"These are extraordinarily large denomination cards. So I have to ask you for some identification," the manager replied.

"Absolutely," the customer said, patting his pockets as he snatched up both cards. "But I think I left my wallet in the car."

"I see," the manager answered. "I'll be back in a moment."

Inside a black glass dome on the ceiling above the service counter, one of the store's digital video recorders took in the entire scene. It captured no sound, but was placed to view both sides of the counter. Nearby, other cameras took side-profile footage of that area and the entire store.

These devices recorded how, when the manager turned away, the customer quickly left the store and blended into the crowd of passing shoppers. A moment later, the manager was on the phone to Sony's corporate office in New Jersey. Soon she was reading the serial number of each card to Lynn Schiess, CFE, LPQ, LPC, who at that time was a fraud specialist in Sony's loss prevention unit. (Schiess now is a loss prevention auditor with apparel manufacturer Lacoste.)

Schiess discovered that the cards had been purchased recently in a nearby store that had been closed for more than a year. That just didn't add up. Clearly, someone — perhaps an employee in another store — had coded the cards in an unorthodox manner, which cast doubt on whether Sony had ever received payment for them. As Schiess would eventually learn, Sony's internal controls at the time didn't provide for post-transaction assessments of how customers had paid for gift cards. And that turned out to be a major unmitigated fraud risk.

Schiess didn't have much to go on in attempting to track down the culprit(s). She watched the video footage of the young man in the store and realized that by itself the recording was useless for identification purposes. So, Schiess and her supervisor began reviewing exactly how store employees loaded cash values on gift cards in the amounts that individual customers requested and how they initially configured the cash-loading devices.

She knew that each store had one or more machines for activating and adding cash value to cards. But she couldn't figure out how someone could have used an activation machine for a closed store to create two gift cards whose cash value had probably been falsified. The answer to this puzzle became clear, however, when a co-worker Schiess didn't know all that well became unusually chatty with her.

THE CURIOSITY FACTOR

Schiess and her colleagues in the corporate office relied on an IT technician for help with their PCs or applications. This bright employee knew that Schiess' team investigated fraud in Sony stores.

The IT technician, after five years on the job, had mastered the help desk and had been given additional responsibilities. However, unbeknownst to Schiess, the technician's recently expanded role included maintaining a supply of — and initially configuring — the devices that stores used to activate gift cards and add cash value to them.

Part of that preparatory process included assigning to a machine a unique store identification code and running a test transaction on a gift card to confirm the machine would operate properly in the store. After the technician had determined that a card machine was working and had sent it off to a store, standard operating procedure called for him to remove the cash value from the card he had used, which remained in his possession. And therein lay another fraud risk: At that time Sony internal controls didn't require tracking the serial numbers of the cards on which the technician had performed these test transactions.

Soon after the unidentified customer tried to use the bogus cards, the help desk technician began to frequently stop by the loss prevention unit "just to chat," which he had never done before. Schiess thought this was odd but not necessarily suspicious. Regardless, she mentioned it to her supervisor, who had worked in loss prevention for decades.

"[My supervisor] immediately interpreted our help desk guy's behavior as a red flag," Schiess recalled. "In his experience, some fraudsters had drawn attention to themselves by trying to find out whether investigators knew about their fraud."

So Schiess and her supervisor visited the IT department head on the chance that the technician's behavior might be related to the falsified gift cards. When they told him about the case, he immediately brought up the technician's new and pivotal role in the gift card process and agreed to keep an eye on the technician while Schiess pursued her investigation.

Schiess' next priority was to confirm the identity of everyone involved in the attempted fraudulent redemption. She now had a credible fraud theory — one that focused on an employee in the corporate office, not in a store — and she set out to find evidence supporting or disproving that theory.

FAMILIAR FACE

Schiess' investigation continued with a background check on the IT technician, including an online search for information about him and people with whom he associated. When she discovered he had a Facebook account with a public profile and photos, she immediately recognized a face she had seen in the video of the attempt to use the $5,000 gift cards. The bogus customer and the IT technician were friends. Next step: perform an admission-seeking interview.

Schiess and her supervisor confronted the technician with this evidence. He promptly confessed and vented his pent-up resentment against the company, which he felt had denied him a raise and bonus that his hard work more than justified.

Not long after he began working with gift cards, he said, he had come across the unique identification code of the closed store.

Soon thereafter, an operational store needed a gift card activation machine. At that point, the fraud triangle's three components (pressure, rationalization, opportunity) coalesced in the IT technician's mind. He already was motivated to seek revenge and had fully rationalized his moral entitlement to it. Now, with a tempting opportunity to commit lucrative fraud in what he perceived as a low-risk situation, the technician launched his rash, short-lived plan.

This is how he did it. Just before legitimately configuring the activation machine, the technician temporarily assigned the closed store's code to it and fraudulently issued himself two unfunded $5,000 cards. He then changed the store code to that of the operational store and sent the machine off to it. There was no audit trail to follow; only he knew he had "borrowed" the activation machine to give himself a $10,000 gift. Feeling confident, he then recruited his friend to convert the cards into assets they could keep for their own use or sell for a tidy, illegitimate profit.

Schiess' supervisor obtained a signed confession from the IT technician, and then Sony pressed charges and terminated him. Ultimately, he received probation. Sony had suffered no loss, but Schiess was acutely aware that serendipity had played much too large a role in solving the case.

"It was pure luck that this fraudster was nervous enough to draw attention to himself and careless enough to use as an accomplice someone whose photo was on the technician's public Facebook page," she said. "I knew we needed better controls and risk assessment reports to help us keep tabs on these exposures. Otherwise, frauds like this would continue to occur."

DÉJÀ VU WITH A TWIST

A year after the above case, business appeared to proceed normally in another Sony store. Anyone looking at soundless footage from its security camera over the sales counter would have seen the store manager, in plain view, using a gift card activation machine connected to a point-of-sale (POS) register. And he wasn't alone; other employees also were visible nearby, interacting with the manager. It seemed as if nothing out of the ordinary was happening — even though the manager was in the process of stealing $280,000 worth of gift cards.

He didn't know it, but Sony had taken the previous gift card fraud seriously and had greatly improved internal controls. Schiess and her colleagues in the finance and IT departments had created reports to identify indications of potential gift card fraud whenever they appeared.

Sony expected the reports to cover an important security flaw in the company's gift card activation and POS systems. Management had decided that the cost of a hardware upgrade to eliminate the flaw was greater than any losses the exposure would allow. They reasoned that the reports would alert Schiess to any such frauds. And indeed the reports detected and flagged the manager's fraud — but not immediately.

Although the company knew of the security flaw, the manager had discovered it by accident. One day, about a week before his fraud began, the manager was legitimately activating a gift card for a customer. The customer presented a credit card to cover the funding for the gift card, but the customer's credit card issuer denied the transaction. Because the customer didn't have enough cash to pay for the gift card, the manager cancelled the gift card transaction, returned the gift card to the usual storage cabinet and gave it no further thought.

However, a few days later, another customer asked to buy a gift card, and the manager used the same card he had cancelled earlier. When he began to add cash value to it he discovered that the value he thought he had erased was still on the card — even though Sony had received no funding for it. The stunned manager put the card aside and activated another for the current customer. Then the manager began planning a fraud in which he would intentionally initiate and cancel gift card activations after adding large amounts of cash value to the cards. His fatal flaw was to assume that the company was unaware of the security flaw he had discovered by accident.

At first, the manager fraudulently added relatively small amounts to gift cards. No one inquired about these transactions, so he plunged ahead. In just one week, he issued himself $280,000 in illegitimate, unfunded gift cards. Well before he finished his spree, however, a report tipped Schiess off to the high number of gift card cancellations in the manager's store. She reviewed the store's security video and saw the manager processing stacks of gift cards with nary a customer in sight.

"He just went wild and fraudulently activated more than 100 cards," Schiess said.

Other employees, who were arranging displays and performing similar routine tasks, had no idea the boss was stealing. But Schiess combined intelligence from reports and video and knew exactly what the manager was doing. She alerted the finance department, which deactivated the falsified cards before anyone could use them. The manager confessed, and Sony reported the fraud to law enforcement, who arrested him.

"We learned from our experience," Schiess said. "Improving internal controls saved us from incurring a huge loss. And our discovery and prosecution of these frauds might have deterred other employees from committing similar abuses."

Reporting Scams and Frauds

If you have not lost any money and have not provided personal or financial information (relating to a fraud or scam), and you simply want to inform the appropriate organizations, report it to the Canadian Anti-fraud Centre by calling 1-888-495-8501

If you received a fraudulent e-mail soliciting personal or financial information (phishing scam), you should also advise the financial institution or other agency whose name was used.

If you are a victim of fraud or if you unwittingly provided personal or financial information (identity fraud), follow the steps in our Victim Assistance Guide.

If you are a victim of fraud and it is not related to identity fraud, contact the police service of jurisdiction in your area.

Always report fraud to the Canadian Anti-Fraud Centre at info@antifraudcentre.ca or by dialing 1-888-495-8501 or on-line by visiting the CAFC website.

Growing number of stolen IDs used to get real passports: RCMP

Criminals are increasingly using stolen social insurance numbers and doctored birth certificates to obtain legitimate driver's licences and passports, an internal RCMP report says.

And by leveraging pilfered or forged identity markers into higher-value IDs, criminals can sidestep tough anti-counterfeiting features built into government-issued identity documents, including a pending upgrade of passports with biometric chips.

"Identities are being overtaken, altered or created, facilitating a number of other crimes, including many variations of fraud, typically for financial gain or to conceal a true identity," says the March 2011 report prepared by the RCMP's criminal intelligence division.

It points to a rising use of "breeder" documents -- identity records such as social insurance numbers, birth or citizenship certificates -- that are stolen, tampered with or falsified, then used to sign up for credit cards or valid forms of identity.

The report suggests Ottawa's recent move to stop issuing SIN cards, instead sending the information in a letter, may not hinder identity thieves who skim someone's mail or pick through their garbage looking for the nine-digit number.

The report says the failure of governments to cross-check the authenticity of personal documents used in applications allows fraudsters to stitch together a "synthetic" identity, often combining a stolen social insurance number or altered birth certificate with a made-up name and date of birth.

That means a social insurance number can be successfully paired with an entirely different name on a government application form, since the two are not routinely checked for a match, it says.
And online applications make it easier for criminals to avoid face-to-face interactions when committing identity fraud, the report notes.

Though obtaining credit cards is the number 1 goal for fraudsters, they're also exploiting gaps in the way numerous official identity documents are issued -- or using existing cards with no security features or photo -- to acquire a federal passport or provincial driver's license, according to the RCMP research.

"There are too many ID cards/documents in circulation. More documents lead to more standards, which opens the door to more fraud," the report says, adding organized crime groups seize upon identity-protection shortfalls.

A censored copy of the report obtained by The Canadian Press under the Access to Information Act does not contain statistics on how common the fraud tactic is, but estimates suggest it is growing rapidly along with other forms of identity crime.

Getting the provincial and federal governments on the same page when checking someone's identity is a big undertaking that nonetheless needs tackling, said Lindsay Lee, director of the Canadian Identity Theft Support Centre, which runs a hotline for identity fraud victims.

"There's no unified system for (governments) to check everything across the board. It's really challenging to get everyone in line," she said."It's just a big jumble right now."

Some 17,000 Canadians lost more than $13-million to identity fraud last year, twice the dollar loss reported in 2007, according to figures collected by the Canadian Anti-Fraud Centre, a federal organization which tracks identity crime.

But the real total is likely higher due to under-reporting, the RCMP report says, citing a 2008 survey by Hamilton's McMaster University that found only 13 per cent of identity fraud cases are reported to police.

Lee said one simple step Ottawa and the provinces could take is to start partly blanking out social insurance numbers in government letters, just as credit card numbers are hidden on receipts.
Having a credit check done at least once a year and keeping an eye out for missing bills are two ways people can protect themselves against the more than two-dozen types of identity crime, she said.
And once bills and government letters have been read? "Shred them."

RCMP Sgt. Luce Normandin is helping draft a national identity crime strategy. She says the plan aims to boost awareness among governments, businesses and Canadians themselves and cut down identity theft rates.

"Hopefully the community as a whole becomes more sensitive to the fact (of ID fraud)," she said.
"We don't feel targeted as much as we maybe sometimes are."


Read more: http://www.ctvnews.ca/canada/growing-number-of-stolen-ids-used-to-get-real-passports-rcmp-1.948404#ixzz2605y7BpC

Ontario private eyes accused of fraud nabbed in Caribbean

Two Canadian private eyes accused of defrauding divorce and business clients have been nabbed by police in the Caribbean where they have been island hopping for three years.

Cullen Johnson is a former aide to a Toronto police chief. Elaine White, his wife and partner in alleged crime, once worked for forensic accountants in Toronto. They are in a Turks and Caicos jail awaiting a hearing Friday.

A Toronto Star investigation in 2009 exposed an unusual scheme: Both were accused by former clients (and later the police) of forging and selling bank records that made clients believe an ex-spouse, friend or employee had millions of dollars stashed offshore. One case involved a group of lottery winning friends led to believe one of their group swindled the others.

Shortly after the pair pleaded not guilty to fraud charges in Newmarket court in late December 2009, they flew south and set up shop in the Bahamas, calling their new private-eye company Internal Affairs Global, boasting a crack investigation squad that could pierce any banking veil.

On Wednesday, immigration agents in the Turks and Caicos arrested Johnson, 64, and White, 69. Police in Ontario say the pair had overstayed their Turks’ visa. A routine check turned up warrants for their arrest filed internationally by the Ontario Provincial Police, stories in the Toronto Star and their Panamanian-based website.

“Our folks are in touch with the authorities in the Turks,” said OPP spokesman Sgt. Peter Leon.
He said the OPP is exploring options to get them back in Ontario. Extradition is one option, but there may be an easier route. “The (Turks government) may deport them. If we know they are coming, we will be waiting for them.”

The Star’s probe of Johnson and White turned up a series of authentic looking bank statements sent to numerous clients for a fee.

In one case, well-respected former Ontario Liberal MPP Eric Cunningham was a target. Cunningham and his wife were in court on divorce proceedings in 2005. In a case that took years, his ex-wife presented banking documents obtained from the detectives that made it look like the former MPP was a wealthy man with assets offshore, an incredible $2.3 million in accounts flung as far as the Cook Islands, Panama, the Bahamas, Hong Kong and the Cayman Islands.

All false, two judges said, vindicating Cunningham. But the case took a financial toll on him as he had to pay lawyers for years to defend his case. His ex-wife’s father funded most of the investigation of Cunningham, but private eyes cooked up the false documents.

In Cunningham’s case and others, the detectives are accused of doing a sort of financial striptease for clients, showing clients (his ex-wife in this case) more and more documents depending on how much they paid in fees. The Holy Grail which clients would finally get (all forged) was the signature card “proving” who had opened the offshore account.

Cunningham said Wednesday he is cautiously pleased. “The wheels of justice grind, but they grind slowly,” said Cunningham, a communications consultant who said he would be happily retired were it not for Internal Affairs.

The Star stories revealed how the Ontario government has little control over the private investigators it licenses. Not much has changed since then, though a top official lost his job.

In another case, four Toronto Catholic School Board employees who were good friends routinely played the same lottery numbers, hoping to make a big score and retire early. One day, one of the four did a random check of the Ontario Lottery and Gaming Corp. website and learned the group’s ticket had won $5.7 million six months earlier.

Suspicious of the friend who had checked the number at a convenience store, the group hired Internal Affairs. A “banking sweep” turned up records that appeared to show the friend had won, and sent the money offshore to Barbados and Switzerland. The group confronted their friend who said the convenience store owner had told her they did not win
.
An investigation turned out that the store owner was the thief, and he had closed his shop, bought a mansion, a Tim Hortons franchise for his son and several cars. The lottery corporation reimbursed the four friends and the store owner pleaded guilty to fraud.

Johnson and White are also believed by investigators to be behind a series of forged documents that suggest federal minister Julian Fantino, Cunningham, other politicians and a “yellow” journalist at the Star are involved in a bizarre, fictitious financial conspiracy called “Superstar Corruption.”

In a previous interview by email in 2010, Johnson both attacked the Star’s credibility and protested his innocence. In other correspondence, Johnson has mused about his predicament, unable to come home to see family.

“I’ve always liked the Kenny Rogers ballad, ‘The Gambler.’ Good advice. Know when to hold ’em and know when to fold ’em,” Johnson wrote to the Star at one point. He ended on a cheery note. “As they say at McDonald’s, “Have a nice day!”

Nearly half of Canadians report hacker attacks

OTTAWA — Whether it's by viruses, worms or phishing emails and texts, nearly half of all Canadians have been targeted by hackers at some point over the past year, according to a new report from an anti-virus software company.

The 2012 Norton Cyber-crime Report, released Wednesday, says more than 46 per cent of Canadians have re-ported attempts by hackers to try to obtain personal data over the past 12 months.

More than 8.3 million Canadians report they have been victims of cybercrime in the past year and 42 per cent of Canadian adults say they wouldn't know if their computer, tablet or phone was infected with a virus unless it crashed or slowed down dramatically.

Canadian's aren't being singled out, according to the re-port, which collected data from 24 countries.
More than 46 per cent of global respondents also re-ported that hackers had tried to coerce sensitive information from them within the past 12 months.

Despite new anti-virus soft-ware and tougher laws to protect consumers, hackers are becoming more dangerous than ever. According to the Norton study, hackers have started mining social net-works such as Facebook and have added new tools that al-low them to exploit software flaws on phones, tablets and computers in their attempts to scoop up more personal in-formation.
When those high-tech approaches aren't enough, hackers are turning to low-tech methods to implant computers with viruses and other nasty computer pro-grams.

In January, a scam in which callers pretending to be Microsoft employees offered to solve computer problems accounted for 70 per cent of all fraud complaints in Canada, according to the Canadian Anti-Fraud Centre.

The callers offered to help people clean a virus from their hard drives. In the process, they charged victims as much as $400, collected credit card information and gained access to personal files on the victims' computers.

Hacking accounted for more than $1.4 billion in losses to Canadians over the past 12 months, the study estimates.

Lynn Hargrove, Canadian director of consumer solutions for Symantec Corp., which publishes Norton anti-virus software, said consumers are becoming more savvy at preventing hackers from gaining access to their computers. But hackers are increasingly turning their attention to mo-bile phones and devices, especially as more people use cellular phones for banking and making electronic payments.

"Cyber criminals are looking at new ways to attack, and mobile is a really big platform that we are seeing," she said. "Obviously, that's a place that cyber criminals are going to attack. Cyber criminals are going to go where the biggest bang for their buck is."

Mobile has become the new frontier for hackers eager to collect bank account and credit card data from individuals. According to Norton, as many as 16 per cent of Canadians re-ported falling victim to mobile fraud over the past 12 months. That number could skyrocket as hackers further target mobile devices.

"It's a much different landscape," said Hargrove. "As we are seeing more cybercrime on a mobile de-vice, 54 per cent of Canadians are re-porting that they are accessing the Internet on that device and 74 per cent of Canadians don't have mobile security."

Hargrove said that 59 per cent of survey respondents were unaware that security programs exist for their mobile devices.

The study was released just days after hackers made public person-al information from more than one million iPhone and other Apple de-vices. The hackers claim to have personal information from more than 11 million mobile devices and say they may release more data in the coming weeks.

Last week, another group of hackers publicly released the bank records and personal credit histories of more than a million people. The hackers, who claim the data theft and subsequent posting of the in-formation on the Internet is a form of protest against big business and the banks, have promised that the release was only the first wave of a broader release.

The 2012 Norton Cybercrime Re-port is in its third year of publication. The survey asked questions of 13,018 online respondents from 24 countries, including 500 from Canada. The margin of error for the study results is plus 0.9 per cent at the 95 per cent level of confidence.

CYBERCRIME NUMBERS

Number of reported cybercrime victims in past 12 months
■ 8.3 million (Canada)
■ 556 million (global)
Online adults who have reported experiencing cybercrime
■ 46 per cent (Canada)
■ 46 per cent (global)
Total net costs of cybercrime
■ $1.4 billion (Canada)
■ $110 billion US (global)
Social network users who do not check links before sharing them with others
■ 15 per cent (Canada)
■ 20 per cent (global)
Online adults who don't understand the risk of cybercrime or how to protect themselves online
■ 21 per cent (Canada)
■ 28 per cent (global)

Source: 2012 Norton Cybercrime Report

 

Police warn insurance fraud is on the rise

Caledon OPP reports to seeing an increase in fraudulent insurance documents produced during routine traffic stops.

Police are reminding people to be careful when purchasing auto insurance and to make sure that they are buying insurance from a reputable broker and insurance company. Unsuspecting consumers are being targeted by fake insurance companies selling auto insurance in Ontario.

Insurance crime is not victimless. According to the recent study conducted by KPMG and forwarded to the Ontario government, auto insurance fraud is conservatively estimated to cost Ontario drivers between $770 million to $1.6 billion per year.

“Do not buy insurance from any person at a coffee shop or on-line, unless they prove to be a reputable broker,” Richard Dubin, vice-president with Investigative Services for the Insurance Bureau of Canada, warned, adding thy should check the person through Registered Insurance Brokers of Ontario (RIBO). “If it sounds too good to be true, stay clear.”

People who suspect they may have been offered or have bought a fraudulent auto insurance policy should take action immediately to confirm whether or not they have coverage. Contact the insurance company that is set out in the policy. Do not contact the broker or agent named in that policy.

A conviction of producing fraudulent insurance can cost, on a first conviction, a fine of not less than $5,000 and not more than $25,000. A subsequent conviction is subject to a fine of not less than $10,000 and not more than $50,000. In addition, the driver’s licence may be suspended for up to one year.

People can also contact Insurance Bureau of Canada’s TIPS Line at 1-877-IBCTIPS or the Canadian Anti-Fraud Call Centre (Phonebusters) at 1-888-495- 8501. In Ontario, they may contact the Registered Insurance Brokers of Ontario at 416-365-1900 or 1-800-265-3097.

Those with information on persons selling fake insurance cards or who suspect that a driver is operating a motor vehicle with a fake insurance card is asked to contact Caledon OPP at 905-584-2241.

20 Thing You Should Have In Your Surveillance Van- From Pursuit Magazine

Being prepared for just about anything is the name of the game when conducting surveillance. Different types of surveillance may require more preparation than other types, but regardless of the type, there are many basic items that every investigator should have in their vehicle. In this article I will share the items I carry in my vehicle at all times, as well as what other investigators have shared with me over the years.

GPS

When I began conducting surveillance almost 10 years ago I was fortunate to begin working for a company that provided lap top computers with a Microsoft Street and Trips mapping system. I would have my computer open while driving and I would follow the map on the computer. When GPS devices became moderately affordable I purchased one. Having a GPS device during surveillance provides me with several advantages.

Advantages

• I don’t have to map out my route prior to the surveillance. I just type in the address and head out. (You still need to Google Earth the area during your preliminary investigation)
• I can see what streets are coming up when following a subject. This allows me to anticipate dead end roads and intersections in an unfamiliar area.
• I can quickly find canvassing points like stores, restaurants and courthouses.

AC Power Inverter

If you are not familiar with this it is a device that plugs into your cigarette lighter and allows you to plug in things like your laptop computer, cell phone, or anything else you need to charge with a traditional household plug. I used to purchase the inverters from Radio Shack. Radio Shacks inverters (for me) would either burn out, or my battery in my vehicle would die without notice. There is nothing like having your subject leave their home and finding out that your vehicle battery is dead. After going through several of the Radio Shack inverters over the years I came across a Black and Decker Inverter (Black and Decker PI400AB Inverter) that has lasted several years. I checked the reviews on Amazon for the inverter I use and the ratings were unexpectedly low. I however have not had any real issues with mine. I actually have been happy with the product as it has two outlets and a USB port.

Advice when using an Inverter

When charging big items like a laptop make sure your vehicle is running. An alarm will trigger when the vehicle is not running (at least on the Black and Decker). Charging smaller items like phones, video cameras and other small electronic devices should not require the vehicle to be running. The fan on the inverter will really hum when you are charging your lap top.
During surveillance you are going to need to be able to look far away quickly. Every private investigator should own a pair of binoculars. The only thing you need to determine is the size and power of your binoculars. I personally use a small less powerful binocular from Bushnell. The binoculars are very small and compact. I have considered a more powerful set but I need to do some more research before I purchase them.

Jump Starter/Inverter/ Compressor

If you are asking yourself why you would need to have this in your car, I can confidently tell you that I have used this device more than I would like to admit. Surveillance vehicles wear down and fail at the worst moments even if you take care of your vehicle.
I have used the jump starter to jump my vehicle to make it to the closest auto parts store several times in my career. I have filled up a flat tire several times in the same surveillance as the individual traveled from location to location, and I have used the inverter portion of the device as a backup for when I had issues with the cigarette lighter. This is something that comes in handy to get you out of a bad situation.
The prices on these devices vary and they can be purchased at places Wal-Mart or Amazon. I am actually due to purchase another one myself. These devices average about $100.00 and up. They pay for themselves the first time you need it.

A Can of Fix a Flat

A can of Fix a Flat may help you get out of a jam. Fix a Flat from what I understand is designed to clog the leak in your tire for a short period of time until you can get the tire professionally fixed. I have heard however that this may ruin your tire but it will at least give you a chance to get to the nearest tire repair location. Never hurts to have it in your vehicle as a last resort.

Mono Pod

Steady documentation is very important to insurance related surveillance. Having a mono pod allows you to quickly obtain steady video documentation of your subject. I still remember the times when I never used a mono pod. I thought my documentation was steady until I went to court for a case and watched the video with a judge and attorneys present. What I thought was steady was really pretty shaky on a large television. I was embarrassed and disappointed and couldn’t wait for the video to be over.

Tri Pod

Tri Pods are great for documentation over an extended period of time. This is something that everyone should have at all times in their vehicle.

Video Camera/Charger/Backup battery

If you are going to be conducting surveillance you obviously need your video camera. Don’t assume you won’t need your charger. You never know what will happen during surveillance. It doesn’t hurt to have an additional battery for your camera.

Memory Cards/Tapes

If you are using a camera that uses 8mm tapes or Mini DV tapes it probably time to move on to a digital camera that uses a SD memory card. Regardless of your camera you will need to carry some extra tapes (if you still require them for your camera) or extra memory cards. Having an extra memory cards of 8 GB or more will give you piece of mind if you are obtaining large amounts of video or if for some reason you memory card has a malfunction for some reason.

Backup or Secondary Video Camera

A second video camera is always nice to have in case your primary camera breaks or stops working for any reason. I actually have a mini DV camera as an emergency camera. This is only because I have not purchase a second digital camera just yet.

Cameras

Yes that means more than one covert camera. Covert cameras are much less reliable than your regular video camera. Having more than one will keep you from having to explain to your client why important video was not obtained. I also carry additional micro SD card for my covert cameras because I never know when I will need an extra one.

Toilet Paper

This is just something that you should have on hand…Just in case. I don’t think I need to elaborate on this.

Cash

Just something that is good to have on hand in the off chance that you need it. I like to have cash on me when subject goes into a bar or restaurant. I can pay with cash and not have to wait for the waitress to bring me back my debit/credit card. Having a couple dollars in change for parking meters doesn’t hurt either.

Overnight bag

An overnight bag with toiletries, and at least one set of clothes and a jacket is the minimum you should have in your car. Having more than that is even better. I carry additional clothes for a couple of reasons. The first reason is that I change clothes if I follow subjects into several different stores to change my appearance. I also have a change of clothes in the off chance my subject travels out of town and my client request that I stay with the subject over night. Instead of buying clothes every time I follow my subject for long distances I just have them on hand.

Additional Food and Water

Having additional dry snacks like crackers, chips etc… are good things to have for backup food when your surveillance goes longer than you expected. I have worked a surveillance case expecting to only work 8 hours on that specific day and packed a lunch to get me through that day. The subject decides to be very active on that specific day and I end up working 15 hours. The backup snacks and water help me keep going until the surveillance ends and I can go and get a proper dinner.

Pee Bottle/Portable camping toilet

Any large bottle with a screw cap should be appropriate for men during surveillance. A Portable Camping Toilet for women should be more than enough. I knew a female investigator that drove a full size van and would not think of getting a different type of vehicle because she wanted to use her Portable Camping Toilet.

Flashlight

Any size flashlight will be appropriate. I carry a small one I purchased at Home Depot.

Tool Set

A tool set to make minor repairs to your vehicle. My battery died on my way home from a case that was 2 hours away. I won’t get into all the details but I didn’t have the appropriate tools to remove my battery. Having a socket wrench set would have saved me money and time when changing out my battery.

Window Shades

Window shades not only keep the sun out of your vehicle but also keep light from entering your vehicle. This allows the tint on your windows to do their job and not allow people or your subject to see within your vehicle. Blocking the front window with window shades also keeps people from seeing you videotaping as they pass the front of your vehicle.

Use your Imagination

I have known other private investigators that have carried these items and other random items in their vehicle just to be prepared for anything. I have known investigators to carry fishing poles, folding chairs, and sports equipment (soccer ball, football, basketball). The main thing I am stressing to investigators everywhere is to be prepared for anything. Imagine explaining to your supervisor or client on how you were prepared for a situation that allowed you to obtain damaging video that saves a client millions of dollars on an insurance claim or how you were able to obtain video that proved infidelity. Or you can imagine how you weren’t prepared and you have to explain why you could not get that damaging video.
If you have any good suggestions that relate to this article feel free to add them in the comment section. And as always, thank you for reading.

About the Author:
Andrew Kidd is a private investigator during the day and a blogger by night. Andrew owns his own Private Investigations agency, Fortified Investigative Services. He enjoys sharing his knowledge with others interested in becoming private investigators as well as with others already in the industry

Senior scam prevention kit available

BARRIE - Home Instead Senior Care wants seniors to be savvy about scam artist tricks.
The Barrie office is offering a free senior fraud prevention kit to give people information about scams.

“Scam artists are specifically targeting seniors because they are the fastest-growing segment of the Canadian population and they are seen to be vulnerable for reasons such as their health, age, or even because they are more trusting,” said Dan Leonard, owner of the Home Instead Senior Care office in Barrie.

According to Statistics Canada, about seven in 10 crimes against older Canadians are never reported to police because victims did not believe the incident was important enough to seek help or because they dealt with the issue personally, said Leonard.

For more information about the fraud protection kit, call 705-503-5501, or visit www.protectseniorsfromfraud.com.

Scams are more sophisticated: RCMP

As both the public and the police have become wiser to many kinds of frauds and scams, con artists have upped the ante. In recent days, the RCMP has issued warnings about current scams that have found their way into the wallets and bank accounts of Saskatchewan residents - and unfortunately, sophisticated scams like these are becoming more common.

"They are more sophisticated," said Const. Joska Gallant with RCMP F Division's commercial crime section of the types of schemes they're investigating these days. "I mean, they use various means to add legitimacy to their scams so they may be creating more legitimate looking websites, documentation, and they're just always changing the scam because they know people are catching onto them, so then they have to tweak it a little bit or make it a little more sophisticated in order to get the victims to bite - and a lot of time and effort is put into it."

Take for instance the "romance" scam where a fraudster reels in a potential victim for months or even longer in order to part that person from his or her money. Police are also still dealing with "computer virus" scams - where con artists ask for fees to fix a supposed virus - and Gallant said they've also seen "rental" scams that play on low vacancy rates by requesting upfront fees to hold a supposed property for a wouldbe renter.

More recently, the RCMP has warned about two types of cons - one called the "white money" scam and the other a time share resale scam.

In the first, people selling high-priced items are targeted through cash-only business deals. The victim, upon meeting with the fraudster, is shown blank paper the size of a bank note and told it's cash that's been altered to conceal it or prevent theft. The fraudster tells the would-be victim the "white money" needs to undergo a process to make it return to currency.

Police say the paper may show indicators of real currency when passed under an ultraviolent light and that suspects often demonstrate a process where two pieces of "white money" are placed on either side of a legitimate bank note. The victim is distracted and a sleight-of-hand exchange replaces the paper with real money to make the victim believe the process is legitimate. The goal of this scam is to have the victim fork over legitimate money in exchange for the worthless paper in future business deals.

The scam has been reported recently in southern Saskatchewan but police believe the group behind it is transient.

The time share resale scam targets people who have advertised their time shares for sale on the Internet with the scammer offering a quick sale with a high profit. Fees, such as maintenance fees, escrow fees or taxes, are requested up front prior to the final sale and the fraudster provides detailed official-looking documents that may require a signature or witness - so providing an air or authenticity. The scam has so far wrested more than $30,000 from Saskatchewan residents - $20,000 from one victim alone.

While there are legitimate companies that offer this type of service, not all are and the RCMP advises time share owners to do their homework before providing funds, since people can easily misrepresent themselves online as a legitimate company.

In general, Gallant noted that many people are "more cautious these days" and are more aware because of information police have released through the media. Because of that, con artists have had to look for new and more creative ways to achieve their ends.

"As fast as we catch onto them, they're coming up with new scams," she said.
While the perpetrators of these types of offences can be hard to catch - in part because many don't originate within the province - Gallant said police and other agencies have become better at working together to combat these crimes. For the general public, prevention is key and Gallant said it pays to research prior to handing over cash. The Better Business Bureau or Internet searches can be good resources as are the websites of the Canadian Anti-Fraud Centre, the RCMP and Saskatchewan's Consumer Protection Branch.

Anyone who suspects they have been the victim of a fraud should contact their local RCMP detachment or police service.

New online scam holds computers for ransom

A new online scam that freezes computers with a message purportedly from RCMP and associating users with child pornography has moved across the world and into North America.
RCMP issued a warning about the new computer virus after receiving 200 reports since February of the malware attacking Canadian residents.

The "ransomware," which in recent years had been contained to Russia and nearby countries, freezes the computer and creates a pop-up message - claiming to be from the RCMP or other government agencies - informing users that their computer is associated with child pornography or illegal music downloading and demands a $100 payment to unlock the computer.

The mention of child pornography often shocks victims who rush to pay the ransom through an online payment service called Ukash. The illegal activity accusation mixed with a fake message from law enforcement scares people, said Sgt. Stephane Turgeon of the RCMP technological crime unit.
"People think it must be true and they'll be charged so maybe they should send the money right away," Turgeon said. "These messages are scams - never send money to somebody you don't know. RCMP and the government do not ask for money in this way."

RCMP have received one report of the scam in Saskatchewan. The malware is probably more widespread in Canada than the 200 reports to RCMP since it is likely many more people with affected computers have not reported the incidents, Turgeon said. People should not hesitate to report the scam since it could help the RCMP investigation, he added.

Investigations into computer scams are difficult because technology allows suspects to conceal their actual location through proxy servers in different countries and the malware's computer code changes often, Turgeon said.

"These are highly complex investigations involving international jurisdictions," he said. "The best way to investigate is through old-fashioned police work through interviewing witnesses and following tips."

The attacks appear to originate in eastern European countries, Turgeon said. The first widespread use of the malware happened in Russia several years ago, but has since moved across Europe and now North America.

The malware attacks out-of-date operating systems so computer users should make sure their operating systems and anti-virus and firewall software are running with the latest updates installed, Turgeon said. If you have an infected computer, take it to a technician who can remove the malware.
People can report incidents of the "ransomware" to the Canadian Anti-fraud Centre at 1-888-495-8501.

Identity theft support centre launched to combat Canada's largest growing crime

OTTAWA - Canada's fastest growing crime may have bank robbers reconsidering their options.

Fraud researchers and police say identity theft - which can range from credit card misuse to more serious violations such as impersonating someone to take out a mortgage - has led to an increase of organized crime in Canada.

"What's easier and what's safer - sitting in a basement somewhere, with a computer, stealing somebody's identity and all the funds out of their bank account or walking in with a gun into a bank?" said Kevin Scott, president of the Canadian Identity Theft Prevention Association. "This is obviously where a lot of criminals are migrating right now."

Scott says children are now also becoming victims because some criminals manage to steal social insurance numbers from infants.

"This is really one of the issues that is starting to happen throughout North America," he said.

To combat these problems, a new centre for identity theft victims was officially launched in Vancouver Thursday.

The Canadian Identity Theft Support Centre, funded by the feds and private partners, has been set up to help victims dealing with the fallout of identity theft. It has a help line - 1-866-436-5461 - and four employees who can provide step-by-step support on the phone.

The centre began its work back in April but it did not officially launch its operation until now.

Canada's Privacy Commissioner Jennifer Stoddart applauds the move to open the operation but she says there are existing legislative gaps which continue to pose hurtles.

Stoddart says the passage of two key pieces of legislation - including an anti-spam bill - would help to reduce concerns.

The RCMP, which is also working to crack down on identity theft on the enforcement end, says it difficult to crack down on the crime once it is committed, especially due to technology.

Anatomy of an astonishing elder fraud: One couple's losses and hard lessons

RALEIGH, N.C. — With their elderly parents seated across the octagonal oak table, Donna and Jim Parker were back in the kitchen they knew so well — the hutch along one wall crammed with plates, bells and salt-and-pepper shakers picked up during family trips; at the table's corner, the spindly wooden high chair where a 7-year-old Jim had tearfully confessed to setting a neighbor's woods ablaze.

It was Christmastime, but this was no holiday gathering. Now, it was the parents who were in deep trouble, and this was an intervention.

For the past year, Charles and Miriam Parker, both 81, had been in the thrall of an international sweepstakes scam. The retired educators, with a half-dozen college degrees between them, had lost tens of thousands of dollars.

But money wasn't just leaving the Parker house. Strangely, large sums were now coming in, too.

Their four children were worried, but had been powerless to open their parents' eyes. Maybe, Donna thought, they'd listen to people with badges.

And so, joining them at the family table that late-December day in 2005 were Special Agent Joan Fleming of the FBI and David Evers, an investigator from the North Carolina attorney general's telemarketing fraud unit.

The home was littered with sweepstakes mailers and "claim" forms, the cupboards bare of just about everything but canned soup, bread and crackers. Charles Parker acknowledged that he'd lost a lot of money, but expressed confidence that he and his wife would eventually succeed if they just kept "investing."

Evers and Fleming showed the couple a video of other elderly scam victims, then played a taped interview of a former con man describing how he operated. Charles was alarmed by what he was seeing and hearing, but his wife seemed to be barely paying attention.

With the couple's permission, Evers installed a "mooch line" on the kitchen phone so they could capture incoming calls. The Parkers pledged their cooperation.

After gathering up some of the mailings for evidence, the officers left, encouraged by what seemed a few hours well spent.

But in the coming months and years, things would only get worse for the Parker family — much worse.

Not naive
The Parkers were hardly unsophisticated people, the type to be easily fooled.

Born in 1924, Charles Alexander Parker and Miriam Wilkinson were high school sweethearts back in Pitman, N.J. After Charles served in the Navy in World War II, they married and embarked on a life of learning and teaching.

This Thursday, April 19, 2012 photo shows a framed picture and other mementoes of Charles and Miriam Parker in their Raleigh, N.C., home.

Charles earned a doctorate in speech communications, and Miriam received a pair of master's degrees, one in special education. Along the way, Miriam gave birth to four children: Donna, Jim, Linda and Carole.

After other teaching stints, Charles Parker took a position in the English department at North Carolina State in Raleigh, from which he would eventually retire. In 1966, the couple built a split-level home, later converting the garage into a classroom for Miriam's special-needs pupils.

Through hard work and thrift, the Parkers were able to send all four children to college and pay off their home. Between their savings and Charles' pension, they were looking at a comfortable retirement.

Then the conman entered their lives.

Older Americans lose $2.9 billion a year to fraud, according to a study last year by the National Committee for the Prevention of Elder Abuse and the Center for Gerontology at Virginia Tech. Most victims are between 80 and 89, and most are women.

Using the latest technologies, "these criminals need not defraud their victims face-to-face," David Kirkman and Virginia H. Templeton wrote in a 2007 article for the journal Alzheimer's Care Today. From far away, "they can identify vulnerable seniors, contact them, and induce them to part with their savings."

A slowing down of brain function comes with normal aging, they noted. The elderly are susceptible to errors in judgment, particularly in situations where a snap decision is required — such as during a telemarketing call.

"Experience teaches us that those with mild dementia tend to be the most vulnerable," wrote Kirkman, an assistant attorney general in North Carolina, and Templeton, a gerontologist.

The Mayo Clinic defines "mild cognitive impairment" as an "intermediate stage between the expected cognitive decline of normal aging and the more pronounced decline of dementia."

The basis for a diagnosis in many cases: falling victim to repeated scams.

Series of calls
No one can say exactly how the trouble began in the Parkers' case.

They might have made a small donation to some charity or responded to a sweepstakes letter they got in the mail. Somehow, the couple ended up on what people in the industry call the "sucker list."

Then the scammers proceeded to "reload" them.

You've won this multimillion-dollar lottery, they'd say. All you need to do is send us money to cover taxes, and we'll send you your prize.

So on Dec. 8, 2004, Miriam Parker — then 80 — drove herself to the Wal-Mart down the road to send a MoneyGram to Montreal, Quebec.

Isolation from absent children is often a hallmark in cases like this. But that wasn't so with the Parkers. Sure, Jim had settled in Ohio, and Carole was living in Florida. But Linda and Donna were both just down the road in Cary.

A busy real estate agent and teacher, Donna — the eldest — popped in as often as she could. But she'd always appreciated her parents for not trying to tell her and her siblings how to live their lives, and she did her best to return the courtesy.

In her parents' living room is a plaque that reads, "Mom's 10 Commandments for a Happy Household." No. 6: "If it rings, answer it."

And so, over a series of calls, Howard Clark — a man with a warm voice who called her "dear" and "sweetheart" — had learned enough personal information about Miriam to convince her that he was the family's ticket to riches.

This Monday, June 11, 2012 photo shows piles of official-looking sweepstakes and other mailings spread on a table at the North Carolina Attorney General's office in Raleigh, N.C. Officials say elderly people lose nearly $3 billion a year to such fraud. (AP Photo/Allen Breed)

Other MoneyGrams followed. Then, on Jan. 12, 2005, Miriam sent a Federal Express package to a "Mr. Stewart" on Papineau Street in Montreal. Inside, as instructed, was a magazine with $12,550 in cash sandwiched between its pages.

By May 2005, the Parkers had blown through their savings. They had tapped into their home equity line and had maxed out several credit cards. They were running out of things to give.

Unwittingly, their children had contributed to the problem. When Miriam asked Donna for a $7,000 loan, the daughter thought little of it.

Through most of their marriage, Charles Parker had taken care of the couple's finances. But in 1989, shortly after his retirement, he suffered a heart attack. That was followed by colon cancer. As her husband's health declined, Miriam stepped to the fore.

Faced with mounting debt — and clinging to assurances that a big payday was coming — she was determined to right their financial ship.

That's when she became a "money mule."

Family intervention
Howard told Miriam that she'd been "hired" by the Canadian sweepstakes company.

On May 5, 2005, a package from Bloomingdale, N.J., containing $8,275 in cash arrived at the Parkers' home. Others followed and in about a week, Miriam Parker would receive and repackage $60,000 in cash for delivery to Mr. Stewart.

Sometimes, there would be two stacks of bills tucked into magazines. The smaller pile was Miriam Parker's "commission."

Howard said she wasn't to tell her children about their dealings. But the kids had already become alarmed by changes in their mother's behavior.

During visits, Jim noticed that she would race him to the phone, then prevent him from listening to the conversations.

And then there was the need for loans. When Donna asked what for, her parents were evasive.

When the children finally persuaded their mother to get a credit report, the news was jaw-dropping. Their thrifty parents were nearly $200,000 in debt.

Miriam Parker insisted that their ship was about to come in, and that she would soon repay the loans. So Donna gave her a deadline.

In an email to the other siblings, she explained: "I told her that if the money was not there by Wednesday, July 6, the family would be forced to do things we do not look forward to."

The money, of course, did not come. It was time to get authorities involved.

Donna went to the state Attorney General's Elder Fraud Unit. Around that same time, she received a call from the FBI — her parents had popped up on their radar. It became apparent to authorities that the Parkers weren't truly willing participants in the scam. So they staged the December family intervention.

Donna allowed herself to hope that the people who'd ripped off her parents would be caught — and that they might even get some of their money back.

But a frantic phone call a couple of weeks later dashed those hopes.

"They're going to turn the gas off," her mother told her on a day with temperatures forecast to plunge into the 20s.

Eventually, the children were having to buy their parents' groceries.

Attorneys Donna contacted could offer no help — the elder Parkers hadn't been deemed incompetent, and it was their money.

In April 2006, Jim Parker and his wife Susan came to town for Donna's wedding. They were sitting in his parents' kitchen when the doorbell rang.

The FedEx driver handed Jim a crinkly envelope. He knew without opening it what was inside and turned it over to Kirkman, manager of the Elder Fraud Prevention Project in the AG's office.

When authorities opened the envelope, they found an old issue of Martha Stewart Living magazine. It contained $5,725 in cash from a Visalia, Calif., widow.

Kirkman called a contact at Federal Express, who ordered a stop on deliveries and pickups at the Parker home.

But the crooks just switched to United Parcel Service.

And now, in addition to money, they were delivering and picking up car tires and custom rims, and laptop computers worth thousands of dollars — all purchased by other elderly victims.

That's when state and federal authorities reached out to their counterparts north of the border.

Credit union
On Aug. 2, 2006, officers of the Royal Canadian Mounted Police and Surete du Quebec paid a visit to Dave Stewart.

The Jamaican native acknowledged accepting numerous packages from the American lady on behalf of a man whom he knew as "Roger." Stewart said he was paid $100 per package.

Professing ignorance of any illegal activity, Stewart agreed to cooperate.

This undated photo provided by the Edgecombe County Sheriff's Office shows Clayton Atkinson.

Howard, meanwhile, gave Miriam a new address to which she should forward items.

On Aug. 17, 2006, laptops valued at more than $7,200 arrived from Hayward, Calif. She sent them to a "Joseph Reid" in the Montreal borough of Verdun. Parcels kept coming — from Texas and Massachusetts, South Carolina and Washington, Missouri and Maine.

In December 2006, the Parker kids persuaded their parents to grant Donna a limited power of attorney. A month later, she accompanied them to the credit union, where they took out a 30-year, $179,000 mortgage on their home.

Caught red-handed
Miriam Parker had become a cog in Howard Clark's fraud machine. The FBI's Fleming decided to turn the tables on him.

On April 3, 2007, Miriam phoned him — this time with Fleming recording.

"Howard?"

"Yes, dear," he replied sweetly.

As the conversation went on, Howard grew testy about her failure to send her packages quickly. In one case, he noted, trucks had left a UPS office just before an important package arrived from her. Send everything next-day air, he demanded.

When she asked whether she should go back to her former shipper, Howard cut her off: "No, you can't never go there again."

When she suggested that the person at the store was just trying to save her some money, Howard told her that was not their concern and to do as instructed. "I'm giving you the money to pay for this."

Perhaps sensing he'd been too hard, he changed his tone.

"Not to say that YOU are making the mistake, but maybe they are," he said. "And we can't afford for you OR them to make the mistake."

But this time it was Howard who'd made the mistake.

The FBI determined the pitch calls were coming from Montreal, and Mounties soon had a real name for "Howard Clark" — he was Clayton Atkinson, who had 13 convictions for assault, theft and weapons possession.

On April 13, 2007, officers from the RCMP raided Atkinson's apartment and caught him with the "pitch phone" in his hand.

In Raleigh, a federal grand jury handed up a 35-count indictment against Atkinson and two co-defendants — Dave Stewart and Jamaal McKenzie, aka "Joseph Reid." The three were charged with one count each of conspiracy and interstate transportation of stolen property, seven counts of wire fraud and 26 counts of mail fraud.

Mentally incompetent
Even then, the trouble wasn't finished for the Parkers.

A Western Union office called Donna to say her parents had been in a couple of times in one day to wire money to "relatives" in Jamaica. They were clearly a marked couple.

Donna suggested it was time they let her take over their affairs.

"I am NOT mentally incompetent," her father protested.

But in May 2008, she filed a petition, and the court appointed local attorney David T. Watters guardian ad litem. The Parkers were "charming and personable," but hopelessly blind to their predicament, he wrote to the court.

Miriam was his main concern.

"Incredibly, Respondent fails to recognize that the family is the victim of a cruel financial scam," he wrote. "In two conversations, she indicated that she felt that she was working with a better quality of person at this time, and that these people would live up to their promise to provide money to Respondent."

The court appointed Donna Parker guardian of their estate.

Blight on society
The criminal case ground slowly along, and last year Atkinson and Stewart pleaded guilty to one count each of conspiracy and mail fraud. (McKenzie is awaiting trial in Canada on an unrelated assault charge.)

When Atkinson appeared for sentencing at U.S. District Court in Raleigh on March 15, Miriam and Donna Parker were there. Charles Parker had died just a month earlier.

When the time came for victim impact statements, Donna Parker rose. She told Judge Terrence W. Boyle of having to take her parents to court, and of the lingering resentment it had caused.

"Scammers who prey on the elderly," she said, "are a blight on society."

Atkinson said he hoped to one day return to Canada to care for his aging father.

Seizing on this, the judge asked: "Can you imagine if somebody like you was doing this to your family? Could you imagine how shocked and outraged you'd be?"

"I can't sit in front of you and give an excuse for it," Atkinson said.

Boyle sentenced Atkinson to 12½ years in prison, Stewart to 6½. He also ordered them to pay $840,705 in restitution — $84,350 of it to Miriam Parker.

Responding to an interview request, Atkinson, 34, sent The Associated Press a three-page letter, cursing America's "corrupted justice system."

"my life is (expletive) ruined now," his unpunctuated reply said. "you think i care about the parkers"

Smart kids
Miriam Parker kept her home, but she's lost most of her independence. Each month, Donna sends her a debit card with $500 on it, to pay for food and personal expenses. The daughter still screens the mail and pays the other bills.

On a recent day, the two sat at that familiar oak table, a Lazy Susan piled with junk mail between them.

Shuffling envelopes, Miriam told a reporter, "As I look back on it, it was a good bit of stupidity on my part." She said she knows better than to respond to junk mail now.

"I'd better not," she said, casting a glance at her daughter. "Or they would've been on my back, right?"

"Yes, ma'am," Donna replied.

"Which is all right," the mother said. "I have very smart kids."

"We had to be," her daughter said.