Feds Can’t Force You To Unlock Your iPhone With Finger Or Face

A California judge has ruled that American cops can’t force people to unlock a mobile phone with their face or finger. The ruling goes further to protect people’s private lives from government searches than any before and is being hailed as a potentially landmark decision.

Previously, U.S. judges had ruled that police were allowed to force unlock devices like Apple’s iPhone with biometrics, such as fingerprints, faces or irises. That was despite the fact feds weren’t permitted to force a suspect to divulge a passcode. But according to a ruling uncovered by Forbes, all logins are equal.

The order came from the U.S. District Court for the Northern District of California in the denial of a search warrant for an unspecified property in Oakland. The warrant was filed as part of an investigation into a Facebook extortion crime, in which a victim was asked to pay up or have an “embarassing” video of them publicly released. The cops had some suspects in mind and wanted to raid their property. In doing so, the feds also wanted to open up any phone on the premises via facial recognition, a fingerprint or an iris.

While the judge agreed that investigators had shown probable cause to search the property, they didn’t have the right to open all devices inside by forcing unlocks with biometric features.

On the one hand, magistrate judge Kandis Westmore ruled the request was “overbroad” as it was “neither limited to a particular person nor a particular device.”

But in a more significant part of the ruling, Judge Westmore declared that the government did not have the right, even with a warrant, to force suspects to incriminate themselves by unlocking their devices with their biological features. Previously, courts had decided biometric features, unlike passcodes, were not “testimonial.” That was because a suspect would have to willingly and verbally give up a passcode, which is not the case with biometrics. A password was therefore deemed testimony, but body parts were not, and so not granted Fifth Amendment protections against self-incrimination.

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FBI Joins International Campaign to Stop Money Mules

The ask comes through a job posting or from someone you meet online. It seems simple and harmless enough: provide your bank account information and allow money transfers to flow into your account. Then move the money elsewhere and maybe earn a little cash for the trouble. Easy, painless, profitable. Right?

Wrong. You are likely aiding criminals by acting as a money mule, which can land you in prison and permanently damage your financial standing.

The FBI is joining with law enforcement partners worldwide to raise awareness of and curtail this illegal movement of funds, which is fueling the growth of crimes across the globe.

The FBI defines a money mule as a person who transfers illegally acquired money on behalf of or at the direction of another. Money mules often receive a commission for the service or provide assistance because they believe they have a trusting or romantic relationship with the individual who is asking for help.

Much of the money moved through these third-parties is stolen through Internet-enabled frauds, thefts, and scams. Drug trafficking and human trafficking are also common sources of the money. While some money mules may be genuinely unaware of their involvement in a larger criminal scheme, many fully understand they are moving money attained from unlawful activities. All mules, whether unaware or complicit, are committing a crime.

“Money mules are needed to help move stolen money from country to country, avert the scrutiny of financial institutions, and mask the identity of the individuals involved in these largely Internet-enabled crimes,” said Special Agent James Abbott of the Bureau’s Money Laundering, Forfeiture, and Bank Fraud Unit at FBI Headquarters. “Being able to easily move the profits from these crimes contributes to their rapid growth and threatens the safety and security of everyone who has a presence online.”

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9 Defendants Charged in Chicago in International Investigation Targeting

CHICAGO — Seven Chicago-area residents are among nine individuals arrested in the United States and Nigeria as part of an international investigation into online “romance scams” and “mystery shopper” schemes.

During the Chicago-based investigation, dubbed “Operation Gold Phish,” law enforcement identified a variety of cyber-enabled fraud schemes allegedly carried out by conspirators in the U.S. and Nigeria.

One of the alleged schemes involved “romance scams,” in which a conspirator builds trust with a victim through a purported online romance before convincing the victim to send money to a predetermined recipient.

The conspirators initially contacted victims online via applications and websites, including Match.com, Facebook, and Instagram, the complaint states.

Another alleged cyber-enabled fraud involved a “mystery shopper” scheme, in which conspirators fraudulently offered victims opportunities to work as a mystery shopper and receive commissions for evaluating retailers.

The victim received a check through the U.S. mail with instructions to deposit it in a personal bank account, withdraw the money in cash, and wire it to a third party.

The check turned out to be fake, and the victims were defrauded of the wired money, the charges allege.

A criminal complaint filed Dec. 4, 2018, in U.S. District Court in Chicago charged nine defendants with conspiracy to commit wire fraud.

Arrests were recently carried out in Illinois, Texas, and Nigeria, and all of the defendants are now in law enforcement custody.

The Nigerian Economic and Financial Crimes Commission is conducting a related investigation of other individuals in Nigeria.

The U.S. charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.

Valuable assistance was provided by the Nigerian Economic and Financial Crimes Commission. Assistant U.S. Attorneys Peter S. Salib and Charles W. Mulaney represent the government.

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Credit Card Cloners Stole Thousands

A prolific credit card scammer—who continued his crimes from behind bars—is now serving a lengthy sentence thanks to a multi-agency investigation into his card-cloning operation.

From 2014 to 2016, Syracuse, New York, resident Daquan Rice, 23, and several associates purchased credit card numbers online from hackers in Russia, Pakistan, and Ukraine, who sell the information they steal. Rice also bought credit card numbers from a friend who worked at a Syracuse restaurant who had skimmed numbers from customer credit cards on Rice’s behalf.

Rice had an associate in New York City with a credit card cloning machine, and he would provide the numbers to the person to make new cards for him. Rice and his accomplices then used these cards to buy gift cards, which they would convert into cash or money orders.

“It’s unfortunately not that hard or complicated to get your hands on stolen credit card numbers,” said Special Agent Brandon Mercer of the FBI’s Albany Division, who investigated this case along with the U.S. Postal Inspection Service, New York State Police, and local law enforcement in the Syracuse area. “This information is readily available on the dark web from hackers and other criminals.”

There was nothing a merchant could have done to stop the fraudulent transaction, because the thieves put the fake cards in their own names. So even if a cashier asked for identification, the name on the credit card would have matched their IDs.

“It was a numbers game. They would print out hundreds of these cards. They would go to the register and swipe, and if it didn’t work, they would just throw it away and use the next one,” Mercer said. “A lot of these cards were only able to used once because the cardholder noticed the fraud and shut down the card.”

The fraudsters made about $80,000 over two years.

After his 2016 arrest for credit card cloning, Rice tried to continue his scheme—from his jail cell. In 2017, he worked with an accomplice, who was not in prison, to put more than $8,000 in funds stolen through credit card fraud on Rice’s prison commissary account. Rice tried to use that account to write large checks, but the prison shut down his account for the unusual activity and contacted the FBI.

Rice pleaded guilty to wire fraud, money laundering, and aggravated identity theft, and in October, he was sentenced to more than 11 years in prison. Several accomplices have also been sentenced for their roles in the scheme.

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Cyberstalking

Children and young adults seem particularly susceptible to sextortion—when a victim is threatened with the release of private and sensitive information unless sexual favors, nude photos, or other demands are met.

But two unrelated cyberstalking crimes committed months apart and hundreds of miles away from each other serve as a reminder of the dangers of compromising personal photos being in the wrong hands, no matter the age of the victim.

In Houston, Heriberto Latigo repeatedly used nude photos of his ex-girlfriend to coerce her to have sex with him. In Crescent, Oklahoma, Troy Allen Martin similarly blackmailed his victim for $50,000.

Both men were eventually convicted and sentenced to prison for their crimes under federal cyberstalking statutes. The harm they caused their victims, however, may never be undone. Such crimes are occurring more frequently, especially among younger victims.

Latigo not only demanded sex, he also sent his victim horrible images and threatening messages. He sent the nude photos to the victim’s sister and male co-workers, and created a disturbing Facebook page that included deeply personal information about the victim.

“It’s a violent crime; he just used cyber tools to carry it out,” said Special Agent Christopher Petrowski of the FBI’s Houston office, who worked the Latigo case.

Latigo’s victim approached local police several times. The case was complicated and the victim’s story changed a number of times, in part because of pressure from Latigo, Petrowski said, making it difficult for local authorities to help effectively. She turned to the FBI, visiting the Houston office in person in spring 2015.

“When someone walks in with a story like that, it’s very emotional and difficult to figure out right away,” Petrowski said. “They’re hurting. This went on for more than a year.”

It took some time for the FBI and federal prosecutors to determine that Latigo had likely violated federal cyberstalking laws. The FBI sent letters to social media companies to preserve certain records in order to prevent Latigo from covering his tracks. Agents also served search warrants, seizing computer equipment from his home.

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After 12 Years on the Run, Joseph Dibee Has Been Apprehended

Joseph Mahmoud Dibee, one of two remaining fugitives linked to a domestic terrorism group that carried out dozens of criminal acts in the late 1990s, ranging from vandalism to arson, has been apprehended.

The 50-year-old fugitive, a U.S. citizen who had been on the run for 12 years, made an initial court appearance in Portland, Oregon today. He faces additional federal felony charges in California and Washington State.

Federal authorities learned that Dibee was traveling through Central America on his way to Russia with a planned stop in Cuba, according to court documents. With assistance from Cuban authorities, he was detained there before boarding a plane bound for Russia and was returned to the United States.

Dibee fled the U.S. in December 2005. In 2006, he was indicted along with 11 co-conspirators as part of Operation Backfire, a long-running FBI domestic terrorism investigation. The conspirators, known as The Family, have been linked to more than 40 criminal acts between 1995 and 2001, including arson and vandalism, causing more than $45 million in damages. The Family’s 1998 arson attack on a ski resort in Vail, Colorado—which caused estimated damages of $26 million—was its most notorious act.

“The crimes they committed were serious and dangerous,” said Special Agent Tim Suttles, who has been working the Operation Backfire investigation from the FBI’s Portland Division since 2004. “Just because time passes doesn’t mean the FBI forgets. We are very gratified to have Dibee in custody.”

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Prolific Fraudster Sentenced to 40 Years

He was, in the words of the assistant U.S. attorney prosecuting him, a “financial predator.” And the federal judge he recently stood before called his long-term fraud crime spree “outrageous” and “despicable,” noting the more than 500 victims ensnared by his latest scheme.

The individual in question is Harris Dempsey “Butch” Ballow, a Texas man who had seemingly made a career out of separating people from their hard-earned money through various financial scams—starting back in the 1980s. But that career has finally come to end: The 75-year-old Ballow was sentenced in May to 40 years in prison after pleading guilty to defrauding investors in a Nevada company. He was also ordered to pay more than $37 million in restitution to those investors.

And according to FBI Houston Special Agent Kendall Hopper, who worked the case, what made this particular criminal scheme even worse was that Ballow had perpetrated it while he was a fugitive from justice hiding out in Mexico. “Ballow fled the United States in late 2004, right around the time he was scheduled to appear in court for sentencing on a previous federal conviction for fraud-related money laundering,” said Hopper, “but instead of keeping a low profile, he brazenly continued his criminal ways.”

In this most recent scheme that netted him the 40-year prison term, Ballow and co-conspirators were able to buy up the majority of the publicly traded shares of a Nevada company called E-SOL International Corporation and install fictitious people as company officers. At the time, E-SOL had almost no assets and conducted no business. Ballow then rebranded E-SOL as a holding company for a couple of phony businesses—of course controlled by him and his associates—and got to work soliciting investors.

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Violent Gang Leader Orders Eyewitness Murdered

On the evening of October 23, 2014, Douglas and Deborah London of York County, South Carolina—just across the border from North Carolina—were watching television in their home when the doorbell rang. When they opened the door, she was immediately shot in the head by a man standing outside, and her husband was shot multiple times. Their adult son, who was also present, made a frantic call to 911, but the couple died next to each other on the floor of their home.

As the York County Sheriff’s Office began to investigate the double homicide, they asked the FBI’s Charlotte Field Office for help.

In the coming months, the investigative team of FBI special agents and task force officers from the Charlotte-Mecklenburg Police Department uncovered a web of violence that stretched across state lines and beyond local prison cells.

Turned out that the Londons had been specifically targeted—they were the owners of a mattress store in Pineville, North Carolina that had been robbed at gunpoint by three men five months earlier. Jamell Cureton, the leader of the Valentine Bloods—a hood, or set, of the national and exceedingly violent United Blood Nation (UBN) gang—had gone into the store and pulled his gun on Douglas London, who had his own gun. The two exchanged gunfire, and Cureton was hit. Also at the scene that day were Nana Adoma, the lookout who was just inside the door; and David Fudge, the getaway driver in the car outside.

The three escaped and drove Cureton to a hospital, but all three were taken into custody shortly afterward by local police and faced state charges.

Realizing that Douglas London was the only eyewitness who could identify him in the mattress store robbery, Cureton—who was in state custody at the time—discussed the “elimination” of London with other gang members through a series of phone calls, letters, and in-person visits.

Valentine Bloods member Malcolm Hartley was to be the triggerman. He was driven to the Londons’ home by fellow gang member Briana Johnson, rang the couple’s doorbell, and murdered them both in cold blood. “And then,” said FBI Special Agent Chad Pupillo, “Johnson drove him back to Charlotte, where they met with other gang members, disposed of the evidence—including burying the murder weapon—and celebrated the victims’ murders.”

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Malware Developer Responsible for Countless Computer Intrusions

Not that they knew him personally, but Taylor Huddleston, a 27-year-old from Hot Springs, Arkansas, was for a time very popular among the world’s cyber criminals, thanks to a malicious piece of software he created called NanoCore RAT.

That malware allowed hackers to steal sensitive information from victims’ computers, including account numbers and passwords, and even allowed them to secretly activate the webcams of infected computers to spy on unsuspecting victims.

“Basically, the malicious software compromises victim computers and steals information,” said a special agent from the FBI’s Washington Field Office who investigated the case. “The NanoCore RAT has the ability to control a victim’s computer.”

This type of malware—a Remote Access Trojan (RAT)—is all the more insidious because in most cases victims have no idea their computers have been compromised. According to court documents, NanoCore RAT was used to infect and attempt to infect more than 100,000 computers.

RATs are not only a threat to individual users but to commercial enterprises as well. And if hackers decide to target U.S. infrastructure using this malware, the agent said, “there is a potential for national security implications.”

Huddleston had the skills to develop malicious software. “There are many cyber criminals out in the world,” the agent said. “Many are not sophisticated in terms of developing a new malware. Instead, they would rather purchase malware to carry out their crimes.”

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601 Defendants Charged, More Than $2 Billion in Fraud Losses Recorded

FBI Deputy Director David Bowdich took part in a press conference today with U.S. Attorney General Jeff Sessions, Health and Human Services (HHS) Secretary Alex Azar III, and other federal officials to announce a nationwide health care fraud and opioid takedown that has resulted in charges against 601 defendants around the country, along with a total of more than $2 billion in fraud losses.

This takedown, the largest health care enforcement action taken to date by the joint Department of Justice and HHS Medicare Fraud Strike Force, involved numerous federal and state agencies working together on the front lines in the fight against health care fraud. “But our work is not finished—we are just getting started,” said Sessions. “We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers, wherever they are.”

The charges announced today aggressively targeted schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and family members), and private insurance companies. Some of these schemes involved medically unnecessary prescription drugs and compounded medications that were often never even purchased and/or distributed to beneficiaries. In other cases, patient recruiters, beneficiaries, and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills for services that were medically unnecessary or never performed.

According to Bowdich, “Any good criminal investigator or analyst will tell you that to find the criminals, you have to follow the money. And the people we’ve charged this week viewed our health care system as their personal ATM.”

Another focus of the operation was medical professionals allegedly involved in the unlawful distribution of opioids and other prescription narcotics.

Because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims, aggressively pursuing these corrupt professionals not only has a deterrent effect on other medical professionals who might be tempted but also ensures that their licenses can no longer be used to bilk the system. Among those charged in this operation were 165 doctors, nurses, and other licensed medical professionals.

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