POP Conference 2005, Charlotte NC

POP Conference 2005, Charlotte NCPOP Conference 2005, Charlotte NC

Examining an Emerging Examining an Emerging Internet Fraud Problem: Internet Fraud Problem:

Who Has Responsibility & Who Has Responsibility & What Should Be Done?What Should Be Done?

Facilitator: Dr. Graeme R. NewmanFacilitator: Dr. Graeme R. Newman Kristen Rosselli, RPD Strategic Initiatives Mgr.Kristen Rosselli, RPD Strategic Initiatives Mgr.

Patrick Niemann, RPD Training SergeantPatrick Niemann, RPD Training Sergeant


Work-at-Home/Work-at-Home/Repackaging FraudRepackaging Fraud

Raleigh NC PoliceRaleigh NC Police

Work-in-ProgressWork-in-Progress


Raleigh, NC USARaleigh, NC USA


M.O. of the CrimeM.O. of the Crime

Two Variations of the “Work at Two Variations of the “Work at Home” scam:Home” scam:

1.1. Re-Packaging VariantRe-Packaging Variant

2.2. Money Order VariantMoney Order Variant

(variants can also be combined)(variants can also be combined)


Commonalities to Both VariantsCommonalities to Both Variants

All victims responded to a job listing All victims responded to a job listing which advertised “work at home” which advertised “work at home” opportunities.opportunities.


Job Ad ExampleJob Ad Example



All suspects were overseas.All suspects were overseas.

At the request of the suspect, all At the request of the suspect, all victims provided victims provided detaileddetailed resumes. resumes.



The suspect will “use” each victim for The suspect will “use” each victim for approximately two weeks.approximately two weeks.


Re-Packaging VariantRe-Packaging Variant

Victim is advised that they will receive Victim is advised that they will receive parcels from several areas within the USA.parcels from several areas within the USA.

The victim is then instructed to re-package The victim is then instructed to re-package or combine the parcels, and ship them to or combine the parcels, and ship them to the suspect (overseas).the suspect (overseas).

The victim is sometimes referred to a The victim is sometimes referred to a specific carrier’s (i.e. UPS) business specific carrier’s (i.e. UPS) business shipping account for postage. shipping account for postage.



What’s really going on…What’s really going on…

The suspect is purchasing high-value The suspect is purchasing high-value items online with stolen credit card items online with stolen credit card numbers.numbers.

The orders are shipped to the victim, The orders are shipped to the victim, who re-packages them, and forwards who re-packages them, and forwards them to the suspect.them to the suspect.



There’s More…There’s More…

Sometimes, when using “corporate Sometimes, when using “corporate shipping” accounts, the victim was shipping” accounts, the victim was unknowingly billing himself for the unknowingly billing himself for the shipping.shipping.


Money Order VariantMoney Order Variant

Victim is advised that they will Victim is advised that they will receive money orders, from various receive money orders, from various sources within the USA.sources within the USA.

The victim is then instructed to cash The victim is then instructed to cash the money orders. They are allowed the money orders. They are allowed to keep a small amount for to keep a small amount for themselves (usually 5%), but must themselves (usually 5%), but must wire the remainder to the suspect.wire the remainder to the suspect.


Money Order VariantMoney Order Variant

What’s really going on…What’s really going on…

The suspect is posting fictitious items The suspect is posting fictitious items on online auctions. He instructs the on online auctions. He instructs the “winner” of the auction to send the “winner” of the auction to send the price of the item, via money order, to price of the item, via money order, to the re-shipper.the re-shipper.


Additional Impact to the VictimAdditional Impact to the Victim

Upset merchants, auction bidders, Upset merchants, auction bidders, and law enforcement are contacting and law enforcement are contacting the re-shipper, demanding answers the re-shipper, demanding answers or restitution.or restitution.

Since the re-shipper has provided a Since the re-shipper has provided a resume to the suspect, continuing resume to the suspect, continuing identity fraud is a possibility.identity fraud is a possibility.


International AspectsInternational Aspects


There can be several distinct There can be several distinct crimes…crimes…

Fraud Fraud

Identity TheftIdentity Theft

Credit Card FraudCredit Card Fraud

Computer Crimes?Computer Crimes?


RPD StatisticsRPD Statistics

Several case reports were filed with Several case reports were filed with RPD, which ultimately identified:RPD, which ultimately identified:

3 re-shippers in Raleigh3 re-shippers in Raleigh

15 victims throughout the US who 15 victims throughout the US who sent money orders or merchandisesent money orders or merchandise

Two countries where proceeds were Two countries where proceeds were being sent (Russia, Ukraine)being sent (Russia, Ukraine)


National StatisticsNational Statistics

No authoritative data yet on re-shipping No authoritative data yet on re-shipping scams scams in particularin particular, however…, however…

From 1/1/04 through 12/31/04, there were From 1/1/04 through 12/31/04, there were 12,703 work-at-home and business 12,703 work-at-home and business opportunity fraud complaints reported to opportunity fraud complaints reported to the FTC’s Consumer Sentinel.the FTC’s Consumer Sentinel.

Source: FTC’s “National and State Trends in Fraud and Identity Source: FTC’s “National and State Trends in Fraud and Identity Theft” published 2/1/05.Theft” published 2/1/05.


Typical InvestigationTypical Investigation

Out-of-town victims are called, and Out-of-town victims are called, and interviewed at length.interviewed at length.

Raleigh victims / re-shippers are Raleigh victims / re-shippers are visited and interviewed.visited and interviewed.

Court Orders are obtained for IP Court Orders are obtained for IP addresses (email trace).addresses (email trace).


Typical ResultsTypical Results

Re-shippers were unusually naïve, Re-shippers were unusually naïve, and desperately hopeful.and desperately hopeful.

All IP address traces ultimately All IP address traces ultimately ended overseas.ended overseas.


Prosecution ResultsProsecution Results

State Prosecution declined on local State Prosecution declined on local re-shippers, and no jurisdiction on re-shippers, and no jurisdiction on foreign suspects.foreign suspects.

Crime / damages do not meet Crime / damages do not meet threshold for prosecution at US threshold for prosecution at US Attorney’s Office (NC Eastern Attorney’s Office (NC Eastern District). Therefore, no FBI, USSS, District). Therefore, no FBI, USSS, etc. involvement or adaptation.etc. involvement or adaptation.


Are victims warned?Are victims warned?

Caveat on “jobspider.com”Caveat on “jobspider.com”


Are Victims Warned?Are Victims Warned? Caveat from IFCCCaveat from IFCC


ScanningScanning

Emerging complex crime in RaleighEmerging complex crime in Raleigh

Multiple victims/caseMultiple victims/case

$7,000 - $20,000/case$7,000 - $20,000/case

~2 week window~2 week window

Multiple jurisdictions/caseMultiple jurisdictions/case

Low solvability factorsLow solvability factors


AnalysisAnalysis

Analyzed crimes separatelyAnalyzed crimes separately

Underlying cause: “Opportunity”Underlying cause: “Opportunity”

Vulnerable victimsVulnerable victims

Vulnerable networksVulnerable networks

Motivated offendersMotivated offenders


Analysis:Analysis: ResourcesResources

COPS GuidesCOPS Guides Identity TheftIdentity Theft Check and Card FraudCheck and Card Fraud Financial Crimes Against the ElderlyFinancial Crimes Against the Elderly Shifting & Sharing Responsibility for Public Shifting & Sharing Responsibility for Public

Safety ProblemsSafety Problems

POP Center website: POP Center website: popcenter.orgpopcenter.org

Police Practitioners & ResearchersPolice Practitioners & Researchers


AnalysisAnalysis

Job ScamJob Scam

Victims/TargetsVictims/Targets

Re-packager/Re-shippersRe-packager/Re-shippers

Online MerchantsOnline Merchants

Shipping CompaniesShipping Companies

Credit Card CompaniesCredit Card Companies


AnalysisAnalysis

Job ScamJob Scam

Places/SystemsPlaces/Systems

InternetInternet

E-job websitesE-job websites

Newspaper AdsNewspaper Ads

Email ServicesEmail Services

Online Merchant Online Merchant WebsitesWebsites

Shipping Shipping Networks Networks

US/ Int’l Shipping US/ Int’l Shipping LocationsLocations

Banking NetworksBanking Networks


AnalysisAnalysis

Job ScamJob Scam

OffendersOffenders

ScammersScammers

Repackaged Repackaged Parcel RecipientsParcel Recipients


AnalysisAnalysis

Job ScamJob Scam


InternetInternet

E-job websitesE-job websites

Newspaper AdsNewspaper Ads


Online merchant’s Online merchant’s websiteswebsites

Banking NetworksBanking Networks

Shipping Networks Shipping Networks & Locations& Locations

Int’l Reshipping Int’l Reshipping locations locations

OffendersOffenders

ScammersScammers

Repackaged Repackaged Parcel RecipientsParcel Recipients


Re-packager/Re-shippersRe-packager/Re-shippers

Online MerchantsOnline Merchants

Shipping Co.Shipping Co.

Credit Card Co.Credit Card Co.


AnalysisAnalysis

Identity Identity TheftTheft


Credit Card Theft VictimCredit Card Theft Victim

Re-shipperRe-shipper

Online Merchants & Shipping Co.Online Merchants & Shipping Co.

Credit Card Co.Credit Card Co.


InternetInternet

Online merchant Online merchant websiteswebsites

Shipping networks Shipping networks & locations& locations

Place CC was Place CC was compromisedcompromised

OffendersOffenders

Identity ThievesIdentity Thieves

Online product Online product purchaserspurchasers


AnalysisAnalysis

Internet Internet FraudFraud


Ebay BidderEbay Bidder

EbayEbay

Re-shipperRe-shipper


InternetInternet

Ebay Auction SitesEbay Auction Sites


Money Order Money Order Locations Locations

US & Int’l US & Int’l Shipping Shipping Networks & Networks & LocationsLocations

OffenderOffender

Ebay Auction Site Ebay Auction Site ScoutsScouts

Website DesignerWebsite Designer


Analysis: Job ScamAnalysis: Job Scam

High offender commitment High offender commitment

Financial gainFinancial gain

Organized crimeOrganized crime

Predatory & consensual/ Predatory & consensual/ participatory V-O relationshipsparticipatory V-O relationships


Analysis: Job ScamAnalysis: Job ScamVictim FacilitationVictim Facilitation

Making initial contactMaking initial contact

Providing personal info Providing personal info

Allowing shift to trust & waives Allowing shift to trust & waives customary safeguardscustomary safeguards

Believing offender’s pitchBelieving offender’s pitch Providing access to fundsProviding access to funds


AnalysisAnalysis

How capable are they?How capable are they?

Who else can help solve the Who else can help solve the problem?problem?

Who has ownership?Who has ownership?


AnalysisAnalysis

Job Job ScamScam

GuardiansGuardians

FamilyFamily MediaMedia

Email Providers Email Providers ISPISP

Law EnforcementLaw Enforcement Financial InstitutionsFinancial Institutions

Corp Fraud DeptsCorp Fraud Depts Credit Reporting AgenciesCredit Reporting Agencies

FCC & FTCFCC & FTC Shipping CompaniesShipping Companies


Job Job ScamScam

AnalysisAnalysis Place/Systems Place/Systems ManagersManagers

Email ProvidersEmail Providers

ISPsISPs

Website Website ManagersManagers

Newspaper Ad Newspaper Ad DeptsDepts

Corp Fraud/ Corp Fraud/ Security Depts.Security Depts.

Package Delivery Package Delivery ServicesServices

Package Package ReceiversReceivers

Mailbox Mailbox CompaniesCompanies


AnalysisAnalysisHandlersHandlers

Law EnforcementLaw Enforcement

Organized Crime Organized Crime MembersMembers

OthersOthers

Job Job ScamScam


ResponseResponse

Solving casesSolving cases

Preventing future opportunitiesPreventing future opportunities


Response: Solve CasesResponse: Solve Cases

Exhausted all leadsExhausted all leads

DA declined to prosecuteDA declined to prosecute

Little to no solvabilityLittle to no solvability

Cases inactivatedCases inactivated

Seeking other response ideas…Seeking other response ideas…


Response: PreventionResponse: Prevention

Attempted to influenceAttempted to influence Victims & GuardiansVictims & Guardians Place/System & ManagersPlace/System & Managers Offenders & HandlersOffenders & Handlers

Addressed motivation of “owner”Addressed motivation of “owner” Unable, unwilling, gain more from ignoring, Unable, unwilling, gain more from ignoring,

profit from crimeprofit from crime

Requested prevention effortsRequested prevention efforts Voluntary – CoerciveVoluntary – Coercive


AssessmentAssessment

Not effective at removing causesNot effective at removing causes

No prosecution No prosecution

Some business practice changesSome business practice changes

Problem continues Problem continues

Seeking suggestions…Seeking suggestions…


Request for FeedbackRequest for Feedback

What other information should be What other information should be collected?collected?

Who is in the best suited to address Who is in the best suited to address problem?problem?

Other response ideas?Other response ideas?

What are other ways to measure What are other ways to measure success?success?


Shifting/Sharing ResponsibilityShifting/Sharing Responsibility

What level of “due diligence” is What level of “due diligence” is required for emerging crimes?required for emerging crimes?

What are the public’s expectations of What are the public’s expectations of local police response? local police response?

How much local police resources How much local police resources should be used?should be used?


Contact InformationContact Information

Kristen RosselliKristen RosselliRaleigh Police DepartmentRaleigh Police Department

919-890-3865919-890-3865

[email protected]@ci.raleigh.nc.us

Patrick NiemannPatrick NiemannRaleigh Police DepartmentRaleigh Police Department

919-872-4144919-872-4144

[email protected]@ci.raleigh.nc.us

POP Conference 2005, Charlotte NC

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Transcript of POP Conference 2005, Charlotte NC