GLOBAL POLICE SPRING A TRAP ON THOUSANDS OF DARK WEB USERS

“WHEN ALPHABAY, THE world’s largest dark web bazaar, went offline two weeks ago, it threw the darknet into chaos as its buyers and sellers scrambled to find new venues. What those dark web users didn’t—and couldn’t—know: That chaos was planned. Dutch authorities had already seized Hansa, another another major dark web market, the previous month.

For weeks, they operated it as usual, quietly logging the user names, passwords, and activities of its visitors–including a massive influx of Alphabay refugees.

On Thursday, Europol and the US Department of Justice jointly announced the fruits of the largest-ever sting operation against the dark web’s black markets, including the seizure of AlphaBay, a market Europol estimates generated more than a billion dollars in sales of drugs, stolen data, and other illegal goods over its three years online. While Alpabay’s closure had previously been reported as an FBI operation, the agency has now confirmed that takedown, while Europol also revealed details of its tightly coordinated Hansa takeover.

With Hansa also shuttered as of Thursday, the dark web looks substantially diminished from just a few short weeks ago—and its denizens shaken by law enforcement’s deep intrusion into their underground economy.

“This is likely one of the most important criminal cases of the year,” attorney general Jeff Sessions said in a press conference Thursday morning. “Make no mistake, the forces of law and justice face a new challenge from the criminals and transnational criminal organizations who think they can commit their crimes with impunity by ‘going dark.’ This case, pursued by dedicated agents and prosecutors, says you are not safe. You cannot hide. We will find you, dismantle your organization and network. And we will prosecute you.”

The Sting

So far, neither Europol nor the Department of Justice has named any of the administrators, sellers, or customers from either Hansa or AlphaBay that they plan to indict. The FBI and DEA had sought the extradition from Thailand of one AlphaBay administrator, Canadian Alexandre Cazes after identifying him in an operation they called Bayonet. But Cazes was found hanged in a Bangkok jail cell last week in an apparent suicide.

Still, expect plenty of prosecutions to emerge from the double-takedown of Hansa and AlphaBay, given the amount of information Dutch police could have swept up in the period after Alphabay’s closure.

“They flocked to Hansa in their droves,” said Interpol director Rob Wainwright. “We recorded an eight-times increase in the number of new users on Hansa immediately following the takedown of Alphabay.” The influx was so large, in fact, that Hansa put up a notice just last week that it was no longer accepting new registrations, a mysterious development given that Dutch police controlled it at the time.

That surveillance means that law enforcement likely now has identifying details on an untold number of dark web sellers—and particularly buyers. Europol claims that it gathered 10,000 postal addresses of Hansa customers, and tens of thousands of their messages, from the operation, at least some of which were likely AlphaBay customers who had migrated to the site in recent weeks.

Though customers on dark web sites are advised to encrypt their addresses so that only the seller of the purchased contraband can read it, many don’t, creating a short trail of breadcrumbs to their homes for law enforcement when they seize the sites’ servers.”

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76 fake $100 bills discovered in Walmart store safe

DELTONA, Fla. – A Walmart employee in Volusia County was arrested Monday night after a fellow employee noticed counterfeit bills in the Deltona store’s safe over the weekend.

On Sunday, an employee noticed the fake bills in the safe’s $10,000 cash bundle were counterfeit and told a manager who took a closer look at the bills, officials said.

The 76 bills totaling $7,600 were blue in appearance, each having a different thickness, texture with “FOR MOTION PICTURE USE ONLY” printed on them, officials said.

Officials said the manager told them the bills were wrapped in a bundle marked “DO NOT USE.”

When loss prevention officer went back to the safe on Monday to take another look at the counterfeit money, the bundle marked was still there, but the fake bills inside were missing, officials said.

After a review of the surveillance footage, officials said that Walmart employee Xiomara Matias-Cruz, 32, was on the footage.

Matias-Cruz who worked in the cash office went into the office on Monday at 6 a.m. to count and verify the money in the safe, which was a part of her normal shift duties.

“Then she found the white “DO NOT USE” package, opened it, made a phone call and appeared to take something from the bundle,” the release said.

Officials said she then left the store and drove off in her vehicle only 15 minutes into her work shift.

Further surveillance video review found that Matias-Cruz opened the safe in the cash office on Friday morning.

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Arlington Heights police warn about ‘grandkid scam’

Arlington Heights police are warning residents to be wary of calls seeking money to bail loved ones out of jail after an elderly woman was taken for $4,000 last week in a so-called “grandkid scam.”

A scammer phoned the woman on Thursday, claiming to be her grandson, with another person saying her grandson needed money to get out of jail, according to Crime Prevention Officer Brandi Romag.

The woman then followed the scammer’s instructions to go to a local Target store and buy gift cards totaling $4,000, Romag said.

“The sooner they get you moving, the sooner they’ve got you,” Romag said.

She said the scammers told the woman to call them back with details about the gift cards she purchased.

“They ask for the gift cards’ numbers and the PIN, and instantly, the money is gone,” Romag said.

The “grandkid scam” typically begins with a call in which an elderly person is told his or her grandchild needs money for bail, for a medical bill or to get out of some other kind of trouble, according to the Federal Trade Commission website www.ftc.gov. The victim is commonly told the matter is urgent and must be kept a secret, the site says.

“Scammers are good at pretending to be someone they’re not,” the website says. “They can be convincing, sometimes using information from social networking sites or hacking into your loved one’s email account to make it seem more real. And they’ll pressure you to send money before you have time to think.”

Officials advise that anyone receiving such a call should hang up immediately, then call his or her grandchild’s phone number or another family member to determine whether the problem is legitimate. But the scammers can be very persuasive, authorities say.

“Sometimes these callers are very adamant, and they tell the victim they’ll stay on the line with them or will call them back in 10 minutes,” Romag said.

She said often the phone scams involve an easily obtained gift card.

“These offenders prey on your emotions,” Romag said. “It doesn’t make any sense that you’d need to buy a gift card in these situations, but the elderly victims are being told that their grandchildren are in trouble and by the time they figure out something’s not right, it’s too late.”

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Nashville pastor, associate accused of getting grant money for non-existent program

“A Nashville area pastor and his associate have been indicted after TBI agents said they secured state grant money for an addiction treatment program that didn’t exist.
Clinton Lewis, 48, of Hermitage and Aundre Trice, 38, of Antioch are charged with four counts of theft each, according to a news release from TBI.
Agents said between 2011 and 2015, Lewis, a Mt. Hopewell Baptist Church pastor since 2002, and Trice received more than $60,000 in grant money from the Tennessee Dept. of Mental Health and Substance Abuse Services for an addiction recovery program.
TBI said the clients listed in the program never received any treatment. Some clients listed were even in jail, prison or had died. The counselors listed in the program weren’t aware it was in operation, agents said,

Lewis and Trice were booked into Davidson County Jail Friday on $10,000 bonds each.”

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COUNTERFEIT PURFUME SEIZED IN MAJOR NEW YORK RAID

CHINATOWN, Manhattan (WABC) — Five people were arrested and large shipments of fake perfume seized in a major raid in Lower Manhattan Wednesday.

Agents with the Department of Homeland Security say businesses were selling dangerous chemicals being passed off as designer products.

The perfume bottles were labeled to make them look like top-of-the-line, brand-name fragrances, but officials said the knock-off scents can contain urine, antifreeze and other unpleasant, flammable or dangerous chemicals that burn when applied to the skin.

The NYPD made the arrests, while federal agents from Homeland Security Investigations seized the merchandise. Shops and warehouses were targeted, with authorities executing nine search warrants across the city in what was described as a two-year joint undercover operation. More than 10,000 boxes were seized.

“What you’re getting is a substandard product,” Homeland Security investigator Angel Melendez said. “You’re getting a product that you don’t know what’s included in it. So these products have been smuggled into the United States utilizing various methodologies. And once they’re here, they’re repackaged and then just distributed. In this particular case, they were distributed to various businesses in the New York City area, and some of them actually made it to e-commerce sites as well.”

Containers packed with the fragrances reportedly came through Port Elizabeth to a temporary warehouse on Henry Street in Elizabeth, New Jersey. Authorities say they were repackaged on Grand Avenue and Broadway, both in Queens, and stored at a storage facility on the BQE. They were then shipped throughout the country, including to Florida, Illinois, Texas, Tennessee, Georgia and Washington D.C.

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Gang members charged with running $414G identity-theft ring

New York City NY April 28 2016 More than three dozen members of a Bloods-affiliated gang were charged Tuesday with running a $414,000 identity-theft ring focused on making purchases with stolen credit card accounts at Barneys, prosecutors said Tuesday.

In all, 39 gang members, who called themselves the “Pop Out Boys,” used stolen bank information it pulled from the Dark Web to create their own credit cards to shop at Barneys and Saks Fifth Avenue, said NYPD Inspector Joseph Dowling.

Their gang name referred to their flashy lifestyle. “They sort of pop out, wearing expensive clothes, a lot of popping the cork on champagne bottles,” Dowling said.

One defendant, Larry Dathan, raps under the name Big B’Z, Dowling said. In one song, “Trapping out da Uber,” he raps about using the car service for getting around while committing crimes.

Detectives executed eight search warrants, finding five handguns and five “credit card mills,” which included computers, credit-card making equipment and cash, Dowling said.

Investigators recovered the equipment at the apartments of defendants in Brooklyn and Queens.

“In at least one case, an individual is accused of making nearly twenty trips to the same luxury department store to buy designer clothes and merchandise,” DA Cyrus Vance Jr. said in a statement.

The suspects bought and resold Goyard handbags and other luxury items, then used the cash to fund nightclub outings and trips to Miami, California and Georgia, police said.

Dowling said the crew has 59 members, with ages ranging from 16 to the 30s.

Detectives caught wind of the alleged fraud while investigating another case at Barneys. They saw some of the defendants shopping with a stack of credit cards, Dowling said.

If one didn’t work, they’d use another one,” he said.

Younger gang members, millennials in particular, have been moving towards credit card and identity theft crimes because they grew up using computers, Dowling said.

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Two New York Men Arraigned On Wire Fraud Charges

NEWARK N.J. – Two New York men who allegedly defrauded credit card companies of hundreds of thousands of dollars are expected to appear in court later today, U.S. Attorney Paul J. Fishman announced.

Nikolay Krechet, 45, of Queens, New York, and James Olla, 24, of Brooklyn, New York, are each charged with one count of conspiracy to commit wire fraud and four counts of wire fraud. They were originally charged by complaint on May 28, 2015, and indicted by a federal grand jury on Feb. 18, 2016. They both arraigned before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court and entered pleas of not guilty.

According to documents filed in this case and statements made in court:

From January 2014 to August 2015, Krechet, Olla, and others procured stolen information related to credit cards belonging to various individuals, including a victim living in New Jersey. Using this stolen information, the conspirators obtained gift cards from various retailers and then either sold the cards or used them to purchase goods, which they then sold.

Each count of wire fraud and conspiracy to commit wire fraud carries a maximum potential penalty of 30 years in prison and a fine of up to $1 million.

U.S. Attorney Fishman credited special agents of FBI, under the direction of Special Agent in Charge Timothy Gallagher; the U.S. Secret Service, under the direction of Acting Special Agent in Charge Kenneth Pleasant; and the U.S. Postal Inspection Service, under the director of Assistant Inspector in Charge James R. Buthorn, with the investigation.

The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg of the General Crimes Unit and Assistant U.S. Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.

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Check-Cashing Scheme Voided

Multi-Agency Effort Disrupts U.S. Treasury Check-Cashing and Identity Theft Ring

The treasury checks were meant for military families, taxpayers receiving refunds, and Social Security beneficiaries—but they wound up in the hands of thieves instead.

From June 2012 to September 2014, a band of 19 criminals in Atlanta ran a large-scale U.S. Treasury check-cashing and identity theft ring that defrauded the federal government and retail stores of nearly $1 million. The ring included check suppliers, sellers, identification manufacturers, and “check runners” who used fake driver’s licenses to cash stolen checks.

At the center of it all was career criminal Asad Abdullah, who orchestrated the elaborate scheme from inside a Georgia state prison. With regular access to contraband cellphones, Abdullah was able to contact his younger brothers in Atlanta, and he soon had the resources he needed to mobilize the family-run criminal enterprise.

Here’s how it worked: Thieves stole checks from various sources, including the U.S. mail, and middlemen purchased the checks at a percentage of their face value, usually 25 percent. Meanwhile, identification manufacturers were paid to produce counterfeit Georgia driver’s licenses matching the names and addresses of the victims, but with photos of the scheme’s check runners, who would cash the checks at grocery stores, discount supermarkets, and check-cashing outlets.

While U.S. Treasury check-cashing was a regular activity for Abdullah’s crew, the ambitious enterprise also engaged in credit card fraud. Inside sources working at big-box stores with regular access to customer and store credit card data provided the thieves with a steady flow of personal information. This data was used to produce counterfeit identification documents so the fraudsters could pose as real store club members. Trips to stores throughout Georgia, Tennessee, and Alabama resulted in brand new replacement credit cards that were ultimately used to purchase gift cards, gas, groceries, and other items.

The ring was finally derailed following a series of early morning raids and takedowns on September 24, 2014, which turned up weapons, cash, and identity document manufacturing hardware.

“The 16-month investigation was an enormous cooperative effort involving numerous federal, state, and local law enforcement resources,” said an FBI Atlanta agent assigned to the case.

As part of the investigation, a confidential informant assisted the FBI and other law enforcement personnel in recovering stolen checks and false identifications. Several stores also agreed to support the investigation by cashing the stolen checks, thus aiding the Bureau and other agencies in identifying members of the scheme.

“Fraud and identity theft crimes are a serious problem in Atlanta,” added the case agent. “Our combined efforts in this particular case serve as a warning to would-be criminals on the brink of preying on unsuspecting victims.”

Sentencing was announced on February 16, 2016 for 18 of the 19 Atlanta criminals convicted for their roles in the crime ring. The 19th and final defendant is scheduled to be sentenced in the near future.

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Egg Donation and Surrogacy Scam California Woman Robbed Would-Be Parents of Money and Hope

Allison Layton, who owned a California company called Miracles Egg Donation (Miracles), claimed she was in the business of helping infertile couples have children. But her business turned out to be a fraud, and she ended up stealing her victims’ hopes and dreams as well as their money.

Would-be parents paid Miracles tens of thousands of dollars—sometimes their life savings—for egg donation and surrogacy services that Layton promised to coordinate. Instead, during a three-year period beginning in 2008, she defrauded couples, egg donors, and surrogate mothers while living a lavish lifestyle off the proceeds.

“This was not a typical white-collar case,” said Special Agent Dana Eads, who led the investigation from the FBI’s Los Angeles Division. “Many of the victims were in a vulnerable place in their lives—working against their biological clocks and trying to afford this expensive and time-consuming procedure. Some told the judge that because of Layton’s actions, they had effectively missed the opportunity to have children.”

The fees paid to Miracles by would-be parents—known in the surrogacy world as intended parents—were supposed to go into escrow accounts to be withdrawn for expenses related to surrogacy or egg donation. But Layton took the money and spent it on her own $60,000 wedding, a new vehicle for her husband, and high-end shopping sprees she flaunted on social media.

As a result, egg donors, surrogates, attorneys, and others often were not paid for the services they provided, and many intended parents—including some who lived overseas—failed to get the services they paid for.

“It became like a Ponzi scheme,” Eads explained. “Early on, some people got the services they paid for. But then Layton began shuffling funds to cover some clients’ services and not others. And when it all finally collapsed, nobody was getting anything.”

When confronted by clients, Layton lied about why payments had not been made and refunds not issued. She led victims to believe they might soon be paid, when, in fact, many were not. Eventually, several victims contacted the FBI while others filed reports with the local police department in Glendora, California. Court records indicate that more than 40 victims lost in excess of $270,000.

Layton maintained she had simply made poor business decisions, but through interviews, bank records, and e-mail correspondence, Eads soon uncovered the fraud.

“The scam was apparent, especially when we examined her bank records,” Eads said. “Layton regularly told clients their checks—which she never wrote—must have been lost in the mail. She told that to so many people. That story, told the same way again and again, was a clear indication of her attempt to hide the truth.”

In 2014, Layton was charged with wire fraud. In a pre-indictment plea agreement with federal prosecutors, she admitted defrauding the victims, and in September 2015, a judge sentenced the 38-year-old to 18 months in prison.

Considering the damage that she caused—both financial and emotional—some of Layton’s victims believe she got off too easy. Eads understands how they feel. “But as a result of this case,” she said, “Layton is now a convicted felon, and part of the plea she accepted is that she can never work in this industry again.”

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Countering the Growing Intellectual Property Theft Threat

In 2008, a new federal law creating stricter penalties for criminals who engaged in intellectual property theft was enacted to keep pace with globalization, e-commerce, and technology advances.

Fast forward to 2016: Technological advances continue at an even faster pace, dramatically increasing the threat posed by criminals who steal trade secrets, produce and/or traffic in counterfeit products, and infringe on copyrights. One important factor in this increase is the global expansion of online marketplaces, which aids international and domestic criminal organizations in trafficking in counterfeit goods.

The Department of Justice (DOJ) recently announced a new strategy that involves partnering more closely with businesses in an effort to combat these types of crimes more effectively. Said Attorney General Loretta Lynch, “Through this new approach, we intend to provide information and resources to individuals and companies that will help them identify and disrupt attempts on their intellectual property, extend greater protection to American commerce as a whole, and safeguard the health and safety of individual Americans.”

And the FBI—working with its investigative partners at the National Intellectual Property Rights Coordination Center (NIPRCC)—will play an integral part in this strategy.

The Bureau has already been collaborating for years with brand owners, copyright holders, and trademark holders because we know the harm that intellectual property theft causes: legitimate businesses lose billions of dollars in revenue and suffer damaged reputations, consumer prices go up, the U.S. and global economies are robbed of jobs and tax revenue, product safety is reduced, and sometimes lives are even put at risk. FBI efforts with these businesses to date have involved shared information, aggressive criminal initiatives based on current or emerging trends, and investigations.

Under the FBI’s new strategy, we’re expanding our efforts to work with third-party entities—such as online marketplaces, payment service providers, and advertisers—that may inadvertently enable the activities of criminals.

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