Police smash £1bn internet fraud gang
Pastor Dale Morgan
Police smash £1bn internet fraud gang*
· Arrests follow raids in UK, US, Canada and Nigeria
· Huge haul of fake cheques and money orders seized
Bobbie Johnson, technology correspondent
Friday October 5, 2007
The Guardian
British police yesterday hailed the arrest of an international gang of
fraudsters as a landmark victory against internet crime, following a
sting across four countries. More than £8.5m worth of fake cheques and
other fraudulent documents were seized in a series of overnight raids
across the UK in a joint operation overseen by Britain's Serious and
Organised Crime Agency (Soca).
The raids, which also took place in the US, Canada and Nigeria, are said
to have scooped more than £1bn in fraudulent cheques and money orders.
Investigators said that the fraudsters, who mainly used the internet to
target vulnerable people for small amounts of money, had racked up vast
sums for their efforts.
"This is a low-value, high-volume crime," said Paul Evans, the executive
director of Soca, yesterday. "Relatively small amounts of money quickly
add up to big profits for the fraudsters. Organised criminals respect no
borders and international cooperation is vital when tackling this type
of fraud." Officials confirmed that a number of people had been in
arrested in Britain, but refused to give further details.
Home secretary Jacqui Smith welcomed the arrests. Mass marketing fraud -
the use of mass communication tools to reach many potential victims
cheaply and quickly - is estimated to cost Britain more than £3.5bn a
year. "This type of fraud is a despicable crime that is costing UK
victims huge sums of money every year," Ms Smith said. "It will not be
tolerated."
Complaints about faked cheques have risen by 60% in the US over the past
year, and officials around the world have expressed deep concerns over
the rising tide of internet crime.
The worldwide nature of the internet has made it far easier for
criminals to contact potential victims, and a string of local and
national enforcement agencies were involved in the swoops. Different
criminal gangs are also believed to share information on potential
victims or gullible individuals, creating "sucker lists" which they
circulate among themselves.
Two victims in Canada are alleged to have lost almost $300,000
(£147,285), although the losses are more generally valued at several
hundred pounds. Tracking down the fraudsters has become a favourite
online pastime for some vigilantes, who engage in long conversations
with the criminals - often located in west Africa or the Netherlands -
to try to find out more about them.
The gangs, believed to originate in Nigeria, are thought to have run a
number of different scams, often focusing on "advance fee fraud", also
known as the Nigerian 419 scam. This involves large prizes or cash sums
being offered to victims, who are asked to pay a small sum for the
transaction. The "prize" never appears or is in the form of a fake cheque.
Other scams start with phishing emails, often claiming to be from the
relative of a rich African official desperate to move a large sum of
money to the west. The criminals ask for details of the victim's bank
account, which they then drain. Another scam involves buying items from
auction websites but overpaying with a fake cheque. The criminals demand
that the seller quickly returns the difference; the original payment
then bounces.
News of the police operation came as figures showed a sharp rise in
credit card fraud. Total losses increased by 26% in the first half of
2007, rising to £263m from £209m a year earlier. Much of the rise was
attributed to British credit cards being used fraudulently overseas,
which accounted for almost £110m, according to the payment industry body
Apacs.
Mike Haley, of the Office of Fair Trading, said that consumers should be
constantly aware of fraudsters out to separate unwitting victims from
their money. "Scammers are always coming up with new ways to make money,
" he said. "It's important to be very wary about cheques you receive
from people you don't know - they could leave you much worse off in the
end."