International Business E-Mail Compromise Takedown

Today, federal authorities—including the Department of Justice and the FBI—announced a major coordinated law enforcement effort to disrupt international business e-mail compromise (BEC) schemes that are designed to intercept and hijack wire transfers from businesses and individuals.

Operation WireWire—which also included the Department of Homeland Security, the Department of the Treasury, and the U.S. Postal Inspection Service—involved a six-month sweep that culminated in over two weeks of intensified law enforcement activity resulting in 74 arrests in the U.S. and overseas, including 42 in the U.S., 29 in Nigeria, and three in Canada, Mauritius, and Poland. The operation also resulted in the seizure of nearly $2.4 million and the disruption and recovery of approximately $14 million in fraudulent wire transfers.

A number of cases charged in this operation involved international criminal organizations that defrauded small- to large-sized businesses, while others involved individual victims who transferred high-dollar amounts or sensitive records in the course of business. The devastating impacts these cases have on victims and victim companies affect not only the individual business but also the global economy. Since the Internet Crime Complaint Center (IC3) began formally keeping track of BEC and its variant, e-mail account compromise (EAC), there has been a loss of over $3.7 billion reported to the IC3.

BEC, also known as cyber-enabled financial fraud, is a sophisticated scam that often targets employees with access to company finances and trick them—using a variety of methods like social engineering and computer intrusions—into making wire transfers to bank accounts thought to belong to trusted partners but instead belong to accounts controlled by the criminals themselves. And these same criminal organizations that perpetrate BEC schemes also exploit individual victims—often real estate purchasers, the elderly, and others—by convincing them to make wire transfers to bank accounts controlled by the criminals.

Foreign citizens perpetrate many of these schemes, which originated in Nigeria but have spread throughout the world.

During Operation WireWire, U.S. law enforcement agents executed more than 51 domestic actions, including search warrants, asset seizure warrants, and money mule warning letters. And local and state law enforcement partners on FBI task forces across the country, with the assistance of multiple district attorney’s offices, charged 15 alleged money mules for their roles in defrauding victims.

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Court Says Border Agents Need Suspicion to Search Cellphones

U.S. border authorities cannot search the cellphones of travelers without having some reason to believe a particular traveler has committed a crime, a federal appeals court ruled Wednesday.

The 4th U.S. Circuit Court of Appeals in Richmond ruled in the case of a Turkish national who was arrested at Dulles International Airport after agents found firearm parts in his luggage.

A lower court judge refused to suppress evidence obtained from a warrantless search of Hamza Kolsuz’s phone.

The 4th Circuit upheld that ruling and found that a forensic search of electronic devices requires “individualized suspicion” of wrongdoing. The court said agents had that suspicion because Kolsuz had made two previous attempts to smuggle weapons parts out of the U.S.

The Fourth Amendment requires law enforcement to obtain warrants based on probable cause. But courts have made an exception for searches at airports and U.S. ports of entry, finding that the government can conduct warrantless border searches to protect national security, prevent transnational crime and enforce immigration and customs laws.

The American Civil Liberties had urged the 4th Circuit to find that the government should be required to obtain a warrant or at least a determination of probable cause that evidence of a crime is contained on electronic devices before agents can search them at airports.

The 4th Circuit said it did not have to reach the question of whether probable cause or a warrant is required. Reasonable suspicion is a lower legal standard.

Claire Gastanaga, the executive director of the ACLU of Virginia, said the group is pleased that the appeals court “recognized correctly that border agents can’t conduct invasive searches on a traveler’s cell phone or other electronic devices just because the person is crossing the border.”

Last year, the ACLU filed a federal lawsuit claiming warrantless border searches are unconstitutional because of the vast amount of private personal and business information stored on electronic devices.


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Palo Alto Turns to Cameras to Keep Watchful Eye on Railroad

Palo Alto is turning to technology in hopes of preventing people from attempting to stand in front of or jump in front of trains traveling through the Peninsula city.

The city has installed thermal imaging-equipped video cameras designed to keep an eye out for people standing or hanging around the tracks at four railroad crossings within city limits.

While the video cameras have already been put in place, the city is still conducting rounds of testing before making the cameras fully operational later this month.

Palo Alto has hired a company to watch the camera feeds from an off-site location and call law enforcement if they spot anything unusual. Those monitoring the camera feeds can also speak via a public address system to alert someone on the tracks that help is on the way.

The Peninsula city has been paying security guards to scan the railroad crossings since about 2009 after a number of teenagers committed suicide on the tracks.

Unlike the human eye, the cameras are able to scan for movement roughly 1,000 feet away from where they are located along the tracks. The cameras can also capture movement when its dark, raining or foggy.

“We’re hoping that not only will this provide better monitoring, the ability to see much better down the tracks than the human eye, but also in the long run to provide faster notification to law enforcement and be more cost effective,” Claudia Keith with the city of Palo Alto said.

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Armed Guards in Bloomfield Elementary Schools Causes Controversy

A recently-formed group, Bloomfield Parents for Sensible Safety, came together after learning of the proposed  placement of nine armed guards (Class III police officers) at the entrances to the township’s elementary schools, to be funded by a $550k line in the school budget.

The group has created a petition urging the BOE to explore other security methods rather than placing armed guards in the elementary schools. The petition has garnered over 240 signatures to date.

Several residents spoke during public comment at the May 24th Board of Education meeting regarding the issue.

They had quite a wait to speak their piece, as public comment was only opened after a two-hour training presentation by Charlene Peterson of the New Jersey School Boards Association. Peterson took the Board through an ethics presentation, as well as a training session on how to use a new online tool to evaluate the Superintendent and a summary of the strategic planning process for the year.

The Board agreed to utilize the new, more intuitive tool for the upcoming evaluation of Superintendent Sal Goncalves’ performance, after he expressed willingness for them to use the new tool rather than the previous version.

During public comment, Mike Heller spoke first, emphasizing the importance of Board members holding themselves to a high standard and thanked the Superintendent for agreeing to being evaluated with the new online tool. He then provided a list of subjects to be addressed in future planning, including redistricting, class sizes, communications, alumni networks to track students, soliciting community input, and more.

Nahum Prasarn said he was disturbed after recently moving to the section of town served by the Oak View Elementary School, to learn that the Board intends to bring in armed guards to the school his children will be attending.

“I am a public middle school teacher in Montclair,” he said. “They are putting security measures in, not guards.” He recommended focusing on student health, identifying at-risk children, and anti-bullying programs.

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8 arrested in retail theft ring ‘Operation Loot and Scoot’

Jacksonville FL May 30 2018

The Jacksonville Sheriff’s Office has successfully arrested eight people in connection with an organized retail theft ring that they believe stole more than $500,000 worth of merchandise.

Following a two-year investigation which involved undercover officers, police arrested Natasha Soukseunchay, Latoya Shurman, Jennifer Upton, Chiquita Moorehead, Brian Harris, Deedra Berry, Dantavia Berry and the man they credit with being the leader of the ring, Antoun “Tony” Arbaji.

Sheriff Mike Williams told the media in a press conference that Arbaji sold upwards of $300,000 dollars of stolen merchandise on websites he maintained.

He would pay people for the stolen items either $10 per item or 20% of the total worth. Sherriff Williams said the suspects would enter stores with a large box and conceal stolen items within it and would walk out only having paid for the item printed on the box or having not paid at all.

“There’s a method that these suspects know what stores do or won’t do and they take advantage of that at the end of the day,” said Williams.

This investigation was difficult and took two years due to the merchandise being sold not only online but also across state lines. The investigation led police as far away as Tallahassee and St. Marys, Georgia and everywhere in between, according to the Sheriff.

When police arrest Arbaji they seized $53,000 in stolen merchandise and $11,000 in cash.

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Millions of Dollars at Stake When Bank Heists Go Digital

“Get down, this is a robbery!” That’s something no bank employee or patron wants to hear. In the past, bank robberies have resulted in thousands, even millions of dollars stolen in cash and gold (although the average yield for a bank robbery in the United States is only about $3,500, according to the FBI).

However, as money has become less physical and more digital, with credit cards and cryptocurrency rapidly replacing cash and coins, bank heists too have evolved from criminals physically breaching the walls of a bank with weapons and physical force, to hackers silently infiltrating the cyber infrastructure and funneling millions into their own accounts.

In one recent heist in Mexico, suspected to be a cyberattack, thieves stole as many as 300 million pesos ($15.4 million) through “phantom orders” to fake accounts, according to Reuters. This week, cybersecurity company Positive Technologies released a report describing how gangs execute sophisticated hacking campaigns against banks by taking advantage of social engineering and flawed security systems. The report also reveals the results of the company’s own penetration tests to show where these institutions may be falling short on protecting their networks and ultimately their funds.

This week I spoke with practice lead for governance, risk and compliance at TrustedSec, Alex Hamerstone, who works closely with large financial institutions doing cyber assessments and developing defense methods based on penetration test results, to gain more insight into bank vulnerabilities and security measures.

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FBI Warns of Posting Hoax Threats

Today, the Federal Bureau of Investigation is announcing a campaign to educate the public on the consequences of posting hoax threats to schools and other public places and reminds communities that these hoax threats are not a joke.

In the aftermath of tragic shootings such as the ones at Santa Fe High School in Texas and Marjory Stoneman Douglas High School in Florida, the FBI and law enforcement around the country often see an increase in threats made to schools and other public forums.

The FBI and our partners follow up on every tip we receive from the public and analyze and investigate all threats to determine their credibility. Federal, state, and local law enforcement then employ a full range of tools to mitigate those threats that are deemed credible. Making false threats drains law enforcement resources and cost taxpayers a lot of money. When an investigation concludes there was a false or hoax threat made to a school or another public place, a federal charge could be considered, which carries a maximum sentence of five years in prison. If a federal charge is not warranted, state charges can be considered.

Public assistance is crucial to our efforts to curb these hoax threats. We ask that the public continue to contact law enforcement to report any potential threats or suspicious activity. If there is any reason to believe the safety of others is at risk, we ask that the public immediately reach out to their local police department by calling 911, or contact the FBI via tips.fbi.gov or over the phone (1-800-CALL-FBI). As always, members of the public can call their nearest FBI field office to report a tip.

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Mobile County forms task force to fight “skimming”

MOBILE, Ala. (WKRG) – The Mobile County Sheriff’s Office and The Attorney General Office of Alabama are forming a partnership to combat Cyber Crimes in the Mobile Area.

According to the sheriff’s office, the purpose of a partnership between the two offices would allow for investigative support when needed for large-scale Cyber Crimes such as; electronic financial crimes that occur from skimming devices on ATM’S, gas pumps and any other devices where credit/debit is used.

“Cybercrime seems like it would be a fairly open and shut case-a cybercriminal commits a crime, law enforcement steps in and catches the bad guy and the case is closed,” says Sheriff Sam Cochran. “Since the method of how they commit these crimes are so complicated, law enforcement usually has to coordinate with government agencies, international partners, and private corporations and that is why this partnership will be such an asset. Our Deputies will be provided the forensic training in order to capture the evidence immediately without compromising the investigation.”

Back in February, the Alabama Attorney General announced the launch of a cybercrime lab with federal and state law enforcement. Marshall announced the initiative with prosecutors and Secret Service, FBI and Homeland Security officials in Montgomery on Wednesday. He says the lab will use cutting-edge tools to investigate cybercrime like online sexual exploitation, human trafficking and data breaches.

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$43 Million Ponzi Scheme Fleeced Tennessee Friends and Neighbors

Nobody would have suspected that the affable Tennessee tractor salesman who was raised among them, tended their lawns in high school, and prayed beside them at Sunday services was scamming them by the millions. Indeed, that’s probably what made the man’s investment scheme so successful, investigators say.

Jeffery Gentry, 40, pleaded guilty in federal court last August to charges related to his $43 million scheme that bilked investors—including friends, family, neighbors, and fellow parishioners—out of more than $10 million. Gentry, who owned and operated Gentry Brothers Tractor Supply and Gentry Auto in the Middle Tennessee town of Sparta, was sentenced on May 14 in U.S. District Court in Nashville to three years in prison. He was also ordered to pay $10.4 million in restitution to his victims.

Gentry’s scam was a textbook Ponzi scheme that promised investors high guaranteed rates of return on investments. He told investors the funds would finance the purchase of mowers and farm equipment to satisfy lucrative state contracts. In return, investors could expect monthly proceeds as high as 10 percent, thanks in part to rebates from equipment manufacturers for cash purchases, according to investigators. But it was all a lie, sustained in large part by investors’ faith that a lifelong neighbor and friend would never purposely do them wrong.

“He kind of preyed on that aspect of it,” said Jeff Guth, chief of the Sparta Police Department in White County, a close-knit rural community of 26,000 residents where the median household income is about $36,000. “Most of these people were friends of his. A lot of them went to church with him. They wouldn’t believe that someone close to them like that would be doing that.”

Guth learned of the scheme a few days before Christmas in 2016, when the police station lobby filled up with distraught investors fearing they had been duped. Gentry’s tractor store—an informal gathering spot where many of the investment transactions occurred—had shut down without explanation, suddenly casting doubt on their guaranteed returns. At the police station, former farmers and other retirees waved handwritten statements revealing their six-figure outlays, much of it from savings and retirement accounts. Suspecting there would be still more victims, Guth called the FBI in nearby Cookeville—a satellite office of the Bureau’s Memphis Division—for support.

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Public officers pan private police force plan

Lansing — Michigan law enforcement groups on Tuesday panned a new Senate plan to that would allow businesses, schools or other entities to contract with private security police forces that could carry weapons and make misdemeanor arrests.

The legislation could “de-professionalize” policing, reduce transparency and create a system where public safety services could vary depending on the wealth or resources of private entities, critics said.

But sponsoring Sen. Mike Kowall, R-White Lake, said he’ll invite police to a work group in hopes of improving legislation that advanced out of the Government Operations Committee in a 4-1 vote. His bill is a second effort after a private policing bill last year drew similarly harsh criticism.

“The main intent is getting more law enforcement on the ground in areas where there isn’t any available,” Kowall said.

Senate Bill 924 would expand a 1968 law that allows entities to create their own private police agencies, giving them the option to instead contract with a third-party vendor for the service.

The Detroit Medical Center, Detroit school district, General Motors Co. and the Henry Ford Health System are among 13 entities that already operate private security police agencies in Michigan.

Public law enforcement groups say expanding the law to third-party contractors heightens concerns over transparency, accountability and logistics.

“Under this law, any apartment complex could have their own private policing,” said Bob Stevenson, a retired Livonia police chief now with the Michigan Association of Chiefs of Police.

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