Father and Son Sentenced for Fraud

An elderly man in a wheelchair lost more than $100,000. A woman lost her high-end home and moved into a small shed on her son’s property. Another victim lost her life savings and could not afford eyeglasses. Some victims declared bankruptcy.

These stories are just a few from the more than 100 victims who lost $63 million as a result of a fraud scheme carried out by the owners of Smith Advertising from around 2008 to 2012.

“This is not just a crime about money. These were people with real lives who were lied to and deceived, and they paid a real price,” said Special Agent Jay Stone, who investigated the case out of the FBI’s Tampa Field Office, along with the U.S. Secret Service.

Gary Todd Smith, and his father, Gary Truman Smith, ran Smith Advertising, a North Carolina-based company with offices in Florida. At first, the company did legitimate advertising work, but it hit a financial snag in the mid-2000s, particularly after the 2008 financial crisis.

“The economic downturn was probably a crippling blow,” Stone said. “The right and legal thing to do if your business is struggling is to restructure and possibly claim bankruptcy. But they wanted money, so they devised this fraudulent scheme.”

The scheme was complex and successful—for a time.

When the business began to struggle, the company solicited investors—including friends and associates from their community, church, and civic organizations—for “bridge loans.” The company told investors that they would loan Smith Advertising money so the company could pre-purchase advertising at a discount. The company promised to pay back the investors what they loaned plus a cut of the discount.

In fact, the company wasn’t buying advertising. The loans were simply to keep Smith Advertising afloat and repay previous debts—the equivalent of opening a new credit card to pay off a maxed-out one. Some of the early victims were paid back with the promised return, but that was simply other people’s money that the company had borrowed. Other victims, however, lost all of the money they invested.

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Google is not your friend, and with its Chrome browser and Maps, it could be your enemy

Depending how you feel about having your privacy being violated and getting scammed, you’re not going to like this latest information about Google.

Google Maps, which so many of us use to find locations and shop for services, is corrupted with false businesses, some of them scams, according to a lengthy Wall Street Journal investigation.

And Google Chrome, the Internet browser many of us switched to because it was faster and easier to use than Internet Explorer, is so cookie-friendly that the Washington Post calls it “surveillance software.”

There are ways around this.

Google Maps

First, let’s look at Google Maps.

Let’s say you need an emergency locksmith or a garage door repair company and you search Google. A map comes up as part of the search with virtual pins.

Only some of those pins aren’t for real businesses. They’re fronts for companies that ship leads to other companies, or, worse, they’re scam companies.

If you follow The Watchdog closely, this is not news to you. Two years ago, I shared the story of Shareen Grayson of Preston Hollow who unknowingly invited a convicted thief in to fix her freezer.

She found him on Google. A leads company had hijacked the phone number of a legitimate appliance business and passed it on to the thief.

Sad to say that two years later, Google hasn’t shut this scam down.

“The scams are profitable for nearly everyone involved,” the Wall Street Journal reports. “Google included. Consumers and legitimate businesses end up the losers.”

WSJ calls this “chronic deceit.”

Hundreds of thousands of false listings are posted to Google Maps and accompanying ads each month, the newspaper found.

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Booklet Lists Observable Indicators of Potential Violent Extremists

A list of nearly four dozen observable behavioral signs that someone might be planning to commit an act of extremist violence is contained in a newly updated publication released by the country’s foremost counterterrorism organizations.

Homegrown Violent Extremist Mobilization Indicators, 2019 Edition, produced by the FBI, the National Counterterrorism Center, and the Department of Homeland Security, contains a broad list of 46 behavioral indicators listed in color-coded groupings of how clearly the indicators might demonstrate an individual’s likelihood of engaging in terrorist activity. The booklet updates a prior version published in 2017.

The agencies authored the updated publication to help law enforcement—and the public at large—recognize potentially dangerous behaviors as the U.S. faces a heightened threat from homegrown violent extremists.

“The booklet provides our partners with tools to identify concerning behavior so that it can be responsibly reported to law enforcement,” said Michael McGarrity, assistant director of the FBI’s Counterterrorism Division. “We can’t be everywhere. We count on our partners to identify threats in their communities.”

The booklet, published on the website of the Office of the Director of National Intelligence, describes each of the behavioral indicators, organized by how easily they can be diagnosed. For example, observing someone prepare a martyrdom video could be diagnosed on its own as a mobilization indicator, while seeing an individual conduct suspicious financial transactions would be considered “minimally diagnostic” and would require other observable indicators to meet a diagnostic threshold.

The publication emphasizes that many of the indicators may involve constitutionally protected activities. But observed together, the behaviors may raise suspicions and merit reporting to authorities.

“It’s an indispensable tool in our efforts to leverage all available resources to identify terrorists before they conduct deadly attacks,” said Matthew Alcoke, deputy assistant director of the FBI’s Counterterrorism Division.

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Fraudsters Took Advantage of Injured Workers

Injured workers in California thought they were calling a hotline to help them navigate the workers’ compensation system. What they got instead was more pain. Rather than getting the help they needed, callers were set up with a group of corrupt doctors, attorneys, and patient brokers who lined their own pockets at the expense of injured workers.

For years, dozens of marketers, doctors, lawyers, and medical service providers conspired to buy and sell patients—and their individual body parts—like commodities for insurance and workers’ compensation purposes. The San Diego-based fraud ring cheated the California workers’ compensation system and private insurance out of more than $200 million. They also subjected patients to unnecessary, and sometimes painful, medical procedures and corrupted the doctor-patient relationship.

Yet thanks to an investigation by the FBI, the San Diego District Attorney’s Office, and the California Department of Insurance, many of the fraudsters have been convicted and sentenced.

The network preyed predominantly on seasonal, migrant workers who travel back and forth between California and Mexico. Their work in heavy labor industries, such as agriculture, can sometimes result in injuries.

Fermin Iglesias and Carlos Arguello set up various patient recruiting and scheduling companies in Central America and Mexico to direct patients to medical service providers. Arguello operated several patient recruitment entities, including one called Centro Legal. Through billboards, flyers, advertisements, and business cards, Centro Legal recruited workers to seek workers’ compensation benefits. When an injured worker called the number on the billboard or card, a scheduling company took over to maximize the profits from that individual worker.

“The corrupt attorneys and doctors had the same goal—to bill as much as possible,” said Special Agent Jeffrey Horner, who investigated the case out of the FBI’s San Diego Field Office. “The attorneys wanted to get the largest possible settlement by any means necessary, which was traditionally based on total medical billing. The doctors wanted to make as much money as possible, without regard for the well-being of their patients.

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Biased and wrong? Facial recognition tech in the dock

Police and security forces around the world are testing out automated facial recognition systems as a way of identifying criminals and terrorists. But how accurate is the technology and how easily could it and the artificial intelligence (AI) it is powered by – become tools of oppression?

Imagine a suspected terrorist setting off on a suicide mission in a densely populated city centre. If he sets off the bomb, hundreds could die or be critically injured.

CCTV scanning faces in the crowd picks him up and automatically compares his features to photos on a database of known terrorists or “persons of interest” to the security services.

The system raises an alarm and rapid deployment anti-terrorist forces are despatched to the scene where they “neutralise” the suspect before he can trigger the explosives. Hundreds of lives are saved. Technology saves the day.

But what if the facial recognition (FR) tech was wrong? It wasn’t a terrorist, just someone unlucky enough to look similar. An innocent life would have been summarily snuffed out because we put too much faith in a fallible system.

What if that innocent person had been you?

This is just one of the ethical dilemmas posed by FR and the artificial intelligence underpinning it.

Training machines to “see” – to recognise and differentiate between objects and faces – is notoriously difficult. Computer vision, as it is sometimes called – not so long ago was struggling to tell the difference between a muffin and a chihuahua – a litmus test of this technology.

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FBI, ICE find state driver’s license photos are a gold mine for facial-recognition searches

Agents with the Federal Bureau of Investigation and Immigration and Customs Enforcement have turned state driver’s license databases into a facial-recognition gold mine, scanning through millions of Americans’ photos without their knowledge or consent, newly released documents show.

Thousands of facial-recognition requests, internal documents and emails over the past five years, obtained through public-records requests by researchers with Georgetown Law’s Center on Privacy and Technology and provided to The Washington Post, reveal that federal investigators have turned state departments of motor vehicles databases into the bedrock of an unprecedented surveillance infrastructure.

Police have long had access to fingerprints, DNA and other “biometric data” taken from criminal suspects. But the DMV records contain the photos of a vast majority of a state’s residents, most of whom have never been charged with a crime.

Neither Congress nor state legislatures have authorized the development of such a system, and growing numbers of Democratic and Republican lawmakers are criticizing the technology as a dangerous, pervasive and error-prone surveillance tool.

“Law enforcement’s access of state databases,” particularly DMV databases, is “often done in the shadows with no consent,” House Oversight Committee Chairman Elijah E. Cummings (D-Md.) said in a statement to The Post.

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US Customs and Border Protection reportedly suspends subcontractor over cyberattack

The US Customs and Border Protection has reportedly suspended a subcontractor following a “malicious cyberattack” in May that caused it to lose photos of travelers into and out of the country. Perceptics, which makes license plate scanners and other surveillance equipment for CBP, has been suspended from contracting with the federal government, The Washington Post reported Tuesday.

On June 12, CBP had confirmed that in violation of its policies, a subcontractor had “transferred copies of license plate images and traveler images collected by CBP to the subcontractor’s company network.” The subcontractor’s network was then compromised by a cyberattack that affected under 100,000 people who entered and exited the US in a vehicle through several specific lanes at one land border during a 1.5-month period.

Federal records showed CBP officials citing “evidence of conduct indicating a lack of business honesty or integrity,” Washington Post reported.

Passports and travel document photos weren’t taken in the cyberattack, but it was reported later in June that the hackers stole sensitive CBP data from Perceptics, including government agency contracts, budget spreadsheets and even Powerpoint presentations.

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5 charged in human trafficking case after 18 immigrants are rescued in Houston

(CNN) Houston police arrested five men in a human trafficking investigation for allegedly holding 18 Latin American immigrants for ransom, police said.

The suspects face multiple charges, including engaging in organized crime by kidnapping, Houston Police Chief Art Acevedo said Friday.

The investigation started June 5 after a family told police a relative was being held against his will. Kidnappers were demanding $4,700 for the man’s release, in addition to $300 that had been paid to someone in Mexico to help bring him into the country, police said in a criminal complaint.

The kidnappers told the family that the man would be killed if the money was not paid, the complaint said.

Officers responded to where they believed the victim was held, and they arrested several suspects and rescued two victims, Acevedo said.

Guns, cash and cocaine recovered

Police learned of a “stash house” with more victims and found 16 more victims in “deplorable conditions,” he said.

“Our investigation determined that women were held captive and sexually assaulted for 25 days,” he said. The victims were taken to hospitals after they were rescued.
Detectives also recovered guns, more than $10,000, and 19 grams of cocaine, police said.

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