Articles on Fraud

Lauren Case of Arkansas paid $850 online to a scammer who promised to send a puppy that never arrived. Case filed a complaint with the Arkansas Attorney General's office. Similar cases have skyrocketed across the U.S., boosted by more people looking to adopt pets during the pandemic, reports Stateline. Attorneys general in many states have launched investigations and, filed lawsuits. In the first year of the pandemic, pet adoptions soared, according to the American Pet Products Association, with ownership rising in 2020 to 70 percent of households, an all-time high. The pet frenzy created a shortage, giving scammers a bigger opening. Pet scams "more than doubled last year and are on pace to be pretty much the same this...

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A former Fortune magazine journalist provided some of the most direct and incriminating evidence against Theranos founder Elizabeth Holmes as the prosecution in Holmes' federal fraud trial prepared to rest its case, Courthouse News Service reports . In an 11-week-old trial that has been mostly a slog through technical details, Roger Parloff, who wrote the 2013 cover story for Fortune about Holmes and Theranos that catapulted her into the national spotlight, provided some of the most revelatory evidence that Holmes was willing to misrepresent the number of blood tests her devices could perform reliably.

Parloff testified about Holmes' recorded, on-the-record claims that her tests were essentially a miniaturized laboratory that could perform hundreds of tests, when prior testimony...

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State attorneys general and regulatory agencies are cracking down on the many cryptocurrency scams that fool people by using buzzwords like “Elon Musk,” “doubling your money” and “a great new investment,” Stateline reports. The Federal Trade Commission estimates that people lost more than $200 million from fraudulent cryptocurrency payments in the third quarter of this year, nearly as much as from illegitimate bank transfers. Attorneys general in Massachusetts and New York have issued fines and cease and desist orders to stop fraudulent crypto companies. More than 30 states considered bills in this year’s legislative sessions dealing in some way with cryptocurrency regulation. The growth of bitcoin has contributed to the increase in scams. One bitcoin was...

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U.S. Department of Homeland Security investigators have identified between 50 and 75 scammers and other brokers offering access to COVID-19 vaccines to dozens of countries, the Wall Street Journal reports . Some nations have negotiated contracts before realizing they were dealing with criminal organizations and calling off the deals. Investigators do not know if any of the scams succeeded.

Many governments are desperate for vaccines because of limited supply. International law-enforcement officials and a security expert said they are concerned that limited vaccine supply in some countries could prompt government officials to unwittingly sign bogus contracts. Homeland Security Investigations’ National Intellectual Property Rights Coordination Center, and its partnerships with pharmaceutical companies, has more than a dozen investigations into...

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A hacker who stole cryptocurrencies valued around $600 million has started returning the money, saying he carried out the record heist as a service to the victims, not for financial gain, Vice reports . By Wednesday afternoon, $260 million had been returned, about half of the take from decentralized finance (DeFi) project Poly Network. In a "dear hacker" open letter, Poly Network reminded the thief that law enforcement was on the case and so it was best "to work out a solution."

Soon after the hack, the attacker's cryptocurrency addresses were flagged, the movements of coins were being tracked, and millions of dollars of the hacker's funds were frozen. The attacker posted a series of messages saying his...

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The Securities and Exchange Commission has largely paused enforcement of parts of two whistleblower award programs while its staff prepares potential revisions to changes enacted last September, the Wall Street Journal reports . SEC Chairman Gary Gensler said the possible changes would address concerns that the 2020 changes would discourage whistleblowers from coming forward under a program that gives tipsters 10-30 percent of fines levied in SEC civil enforcement actions.

The 2020 rules were passed by a 3-2 vote, with Democratic commissioners in opposition. The two Republican commissioners in a statement last week criticized the current changes. But Stephen M. Kohn, chairman of the board of directors of the National Whistleblower Center, called the SEC's latest actions "a...

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Two recent court rulings killed the business model of a litigation-funding scheme that used data-scraping techniques to find whistleblowers who could help bolster False Claims Act lawsuits, Reuters reports . The strategy, "depending on your point of view, was either an innovative way to profit by policing fraud against the U.S. government or a perversion of the statute meant to compensate whistleblowers," litigation columnist Alison Frankel wrote.

The rulings were made by the 5th U.S. Circuit Court of Appeals, affirming the dismissal of two False Claims Act suits against drugmakers Bayer Corp. and Eli Lilly & Co. Inc., and by the U.S. Supreme Court when it denied a petition seeking review of a similar 2020 ruling...

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In giving disgraced lawyer Michael Avenatti a sentence well below the 9-to-11-year term that was recommended, a federal judge cited Avenatti's "sincere remorse" and questioned the Justice Department's decision not to charge another celebrity lawyer whom he called a "central figure in the criminal conduct," the Washington Post reports . Avenatti, who tangled with then-President Donald Trump as the lawyer for adult-film actress Stormy Daniels, was sentenced to 30 months in prison for fraud and attempted extortion in his efforts to shake down Nike Inc. for as much as $25 million.

Avenatti, who had claimed his demands to Nike were on behalf of a client, "had become drunk on the power of his platform, or what he perceived...

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Recent schemes have confirmed longstanding fears that facial-recognition systems could be hacked by fraudsters, the Wall Street Journal reports . Tens of thousands of people in the U.S. have tried over the past year to trick facial-identification verification to fraudulently claim unemployment benefits, according to verification firm ID.me Inc., a contractor to 26 states. The company has seen cases where people wear special masks, hold up images or videos of other people, or use "deepfakes," lifelike images generated by artificial intelligence.

Facial recognition has become widely used to verify payments on phones, check passports or permit entrance to workplaces. A fast-growing type of financial crime known as synthetic identity fraud creates a new identity using a combination of...

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A hacking group that experts said was behind the sprawling ransomware attack that hit hours before the beginning of the July Fourth holiday weekend is demanding $70 million to unlock the thousands of businesses affected by the hack, reports the Washington Post . REvil, the same Russian-language group that was behind the attack on meat processor JBS, posted the demand on a dark-web site associated with the group. The group wants the funds in bitcoin, a popular cryptocurrency, and said if it receives the money it will publish a “decryptor key,” or a computer code that will unlock the victims’ files. The attack was carried out through software that helps businesses manage...

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Almost 1 in 10 of Americans over age 15 reported they were victims of identity theft in the previous year, a Bureau of Justice Statistics study of 2018 cases shows. An estimated 88 percent of identity-theft victims contacted a credit card company or bank to report an attempted or completed theft, but only 7 percent contacted police.

Of the estimated 23 million victims in 2018, 1.9 million (8 percent) experienced multiple types of identity theft during their most recent incident. Only 1 percent reported the misuse of their personal information to open a new account, and even fewer experienced the misuse of their personal information for other fraudulent purposes, such as getting medical care, a job, or...

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