An $80 Million Cyber Crime in 1999 Foreshadowed Modern Threats

Two decades ago, computer viruses—and public awareness of the tricks used to unleash them—were still relatively new notions to many Americans.

One attack would change that in a significant way.

In late March 1999, a programmer named David Lee Smith hijacked an America Online (AOL) account and used it to post a file on an Internet newsgroup named “alt.sex.” The posting promised dozens of free passwords to fee-based websites with adult content. When users took the bait, downloading the document and then opening it with Microsoft Word, a virus was unleashed on their computers.

On March 26, it began spreading like wildfire across the Internet.

The Melissa virus, reportedly named by Smith for a stripper in Florida, started by taking over victims’ Microsoft Word program. It then used a macro to hijack their Microsoft Outlook email system and send messages to the first 50 addresses in their mailing lists. Those messages, in turn, tempted recipients to open a virus-laden attachment by giving it such names as “sexxxy.jpg” or “naked wife” or by deceitfully asserting, “Here is the document you requested … don’t show anyone else ;-) .” With the help of some devious social engineering, the virus operated like a sinister, automated chain letter.

The virus was not intended to steal money or information, but it wreaked plenty of havoc nonetheless. Email servers at more than 300 corporations and government agencies worldwide became overloaded, and some had to be shut down entirely, including at Microsoft. Approximately one million email accounts were disrupted, and Internet traffic in some locations slowed to a crawl.

Within a few days, cybersecurity experts had mostly contained the spread of the virus and restored the functionality of their networks, although it took some time to remove the infections entirely. Along with its investigative role, the FBI sent out warnings about the virus and its effects, helping to alert the public and reduce the destructive impacts of the attack. Still, the collective damage was enormous: an estimated $80 million for the cleanup and repair of affected computer systems.

Finding the culprit didn’t take long, thanks to a tip from a representative of AOL and nearly seamless cooperation between the FBI, New Jersey law enforcement, and other partners. Authorities traced the electronic fingerprints of the virus to Smith, who was arrested in northeastern New Jersey on April 1, 1999. Smith pleaded guilty in December 1999, and in May 2002, he was sentenced to 20 months in federal prison and fined $5,000. He also agreed to cooperate with federal and state authorities.

The Melissa virus, considered the fastest spreading infection at the time, was a rude awakening to the dark side of the web for many Americans. Awareness of the danger of opening unsolicited email attachments began to grow, along with the reality of online viruses and the damage they can do.

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FBI thwarts Brinks armed car robbery outside Merrillville Aldi

HAMMOND — “Bingo,” a would-be robber told his accomplice as a Brinks armored truck pulled into their view in Merrillville Monday, federal authorities allege.

Traveling in a black Jeep Cherokee, the suspects began following the Brinks truck to various stops, with the ultimate plan of robbing it, federal prosecutors allege.

But the FBI was reportedly trailing them each step of the way.

A short time later, FBI agents thwarted the robbery by following and arresting the two men outside of the Aldi grocery store in Merrillville, the agency reported.

The men also are suspects in another $500,000 robbery of an armored truck in July, federal law enforcement officials said.

On Wednesday, the U.S. attorney’s office charged Reilly Jackson Jr., 23, of Griffith, with conspiracy to commit robbery after the Merrillville incident.

His alleged companion, Delvin Perkins, 23, of South Holland, was charged with being an armed felon.

Federal prosecutors allege in a criminal complaint that an ongoing FBI investigation of the suspects prompted agents to follow Jackson and Perkins on Monday.

The government alleges the men are suspects in a $500,000 robbery of a Thillens Cagistics armored truck July 25 in Blue Island, Illinois.

The government alleges that robbery was an inside job because Jackson was the armored car driver employed by Thillens Cagistics, and Perkins was the alleged robber.

The FBI said it found a photo in Jackson’s cellphone of Perkins wearing the same clothes in which he robbed that armed truck and concluded the pair worked together to commit the Blue Island robbery.

An FBI surveillance team was following the two defendants as they traveled in the Jeep Cherokee on Monday. Agents saw the men following a Brinks armed truck as it made multiple stops to collect money from local banks and businesses, the agency reported.

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Treasurer accused of stealing $410,000 from charity for families of slain NYPD officers

The treasurer of a charity that benefits the families of New York Police Department officers who are killed in the line of duty was charged Thursday with stealing more than $410,000 from the fund.

Lorraine Shanley, 68, was charged by federal prosecutors in New York with bank fraud and aggravated identity theft. She will appear Thursday in court after prosecutors said she was stealing more than 20 percent of donations to the charity between 2010 to 2017 at least.

A person with direct knowledge of the matter confirmed to NBC News that Shanley acted as the treasurer for the nonprofit Survivors of the Shield.

The U.S. Attorney’s Office for the Southern District of New York said that Shanley spent the money in a variety of ways — $29,000 for her grandchild’s private school tuition, $32,000 for personal dental expenses, and $25,000 for landscaping.

Shanley is also accused of using about $63,000 of the stolen money to pay for her son’s legal expenses related to criminal cases, prosecutors said.

Her son was reportedly served about three years in prison on drug charges from 2006 to 2009. He was also charged in 2014 with second-degree manslaughter and leaving the scene of an incident without reporting, resulting in death after he crashed his SUV in Manhattan, killing an activist, and fled. The manslaughter charges were dropped.

She also allegedly wrote $45,000 in checks to family members and other people, which she then endorsed herself and deposited into her own account. Prosecutors said Shanley, from Staten Island, also used $1,400 of the stolen money to buy Barbra Streisand tickets and $6,600 more on other event tickets.

According to court documents, 99 percent of the donations to Survivors of the Shield come from New York police officers, and on average, 5,500 NYPD employees donate to the charity each year.

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Mortgage Fraudster Caused Victims to Lose Out on Dream of Homeownership

The pitch sounded enticing: for an upfront fee, real estate “investor” Hasan Hussain promised to find clients the homes of their dreams or negotiate the loans of existing homeowners struggling to pay their mortgages.

Yet Hussain did neither of those things. He simply took his victims’ money—depriving them of their dreams of homeownership and defrauding them out of more than $1 million. Hussain targeted people for whom English was a second language, encouraging them to sign documents they did not understand.

“One woman gave him her life savings. It was her American dream to find a home, and he told her he’d help her,” said Special Agent Christina Grady, who investigated the case out of the FBI’s Boston Field Office. “But he never followed through on any promises to anyone. He would collect money—from people who didn’t have much money—and pocket it.”

Not only did he target vulnerable homeowners or would-be homeowners but Hussain also had a knack for winning his victims’ trust, becoming “like part of their family,” Grady said.

Hussain, who began his years-long fraud scheme in Rhode Island in 2009 while on supervised release for similar crimes in Massachusetts, used a variety of tactics to defraud his victims, which got more complex over time as he acquired more homes.

For example, he convinced a family struggling to pay their mortgage to move out of their home and into one his other properties; he then rented their home out, collecting rent from the tenants without paying the homeowner’s mortgage.

Another tactic involved convincing homeowners that he was trying to negotiate with their lender on their behalf. Instead he would damage their property to decrease its value, and once the home was damaged, he’d buy the home in a short sale—a term for a property being sold at a price lower than what is owed on the mortgage.

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Former FBI Director Webster Assists Investigation

The heavily accented caller who promised William Webster a grand sweepstakes prize of $72 million and a new Mercedes Benz had done most of his homework on his potential fraud target.

“I know that you was [sic] a judge, you was a lawyer, you was in the U.S. Navy,” the caller told his elderly mark. “I do your background check. You are a big man.”

What the caller, Keniel Thomas, 29, of Jamaica, missed was possibly the most salient detail about his intended victim, who was 90 years old the time: William Webster had served as director of both the FBI and the CIA, and so had a pretty good radar for pernicious criminal schemes—in this case, a Jamaican lottery scam.

Thomas’ persistent calls in 2014 to Webster and his wife, Lynda, followed the familiar arc of scams that target the elderly: The caller promises riches but requires some form of payment to move the process forward. The caller demands more and more, and then resorts to intimidation when the cooperation tapers off.

In the Websters’ case, the former judge was told he had to pay $50,000 to get his prize. When the money wasn’t forthcoming, the frequent calls escalated to scary threats, which led the couple to contact the FBI.

“I don’t know how the conversation turned sour,” said Webster, 95, director of the FBI for a decade beginning in 1978. “But it did. And at that point, he shifted gears. Instead of sweet talk, he began to threaten her.”

In one expletive-filled recorded message left on the Websters’ phone, Thomas threatened to kill them and burn down their house if he didn’t get what he wanted. “You live at a very lonely place,” he said. “And the moment you arrive, I’m gonna put a shot in your head.”

Special agents from the FBI’s Washington Field Office enlisted the Websters’ help in nabbing the caller by recording their phone conversations to build a case and develop a clear picture of the scheme. The legwork ultimately led to Thomas’ arrest in 2017 and his sentencing last month in federal court in Washington, D.C., to nearly six years in prison. It also revealed that Thomas and his relatives in Jamaica had successfully scammed others in the U.S. out of hundreds of thousands of dollars.

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Director Discusses FBI Approach at Cybersecurity Conference

With cyber threats to the United States and across globe reaching unprecedented levels, the FBI uses a full spectrum of expertise, technology, and partnerships to root out cyber criminals, FBI Director Christopher Wray said at the annual RSA Conference in San Francisco yesterday.

“Today’s cyber threat is bigger than any one government agency—frankly, bigger than government itself,” Wray said in an on-stage interview at the cybersecurity conference. “But I think no agency brings the same combination of scope and scale, experience, tools, and relationships that the FBI has.”

From multinational cyber syndicates to foreign intelligence services, hacktivists, and insider threats, Wray explained that the FBI takes a multidisciplinary approach to combating threats. For example, the Bureau has an elite rapid deployment force and Cyber Action Teams that can respond to incidents anywhere in the world. In addition, the FBI has joined other federal, state, and local law enforcement agencies on Cyber Task Forces to coordinate responses. Specially trained cyber agents are also embedded in FBI legal attaché offices in more than 60 countries worldwide.

In addition to law enforcement partnerships, Wray also stressed the importance of public-private partnerships, so prevention and response can be swift and coordinated.

“The key is having the private sector start to form relationships with their local field office beforehand,” Wray said.

As the FBI continues to grow its partnerships, the FBI is also developing its workforce’s cyber expertise. Wray spoke about the FBI’s success in recruiting special agents and professional staff over the past year.

“We’re dealing with the most sophisticated, toughest cyber actors in the world, and if you want the ability to take on those people, to be on the front lines of that battle, dealing with incredibly cutting-edge technology … you would be in the right place,” Wray said of FBI cyber careers.

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