Credit card thieves take gas in ‘pump and dump’ scheme

Lilburn, Georgia (CNN)-The man in the white shirt was pumping gas into an ordinary-looking white van. But he was no ordinary customer.

For one, it took him a long time at the pump. And then there were the stolen credit cards police say he took out of his wallet. In the 17 minutes he was at the pump, he used two cards to pump 95 gallons of diesel fuel.

What happened at this gas station outside Atlanta is part of a crime wave around the country, police say. It’s called “pump and dump.” Thieves use stolen credit cards to get gas and then sell it at cut-rate prices to truckers and gas stations that are part of the scheme.

Authorities say it’s a multi-million dollar crime with a quick payoff.

The criminals look as if they are pumping gas like any other customer. But their vehicles are vans, trucks and SUVs fitted with hidden tanks that can hold several hundred gallons. The hidden tanks range from sophisticated contraptions to a simple plastic or metal container inside the vehicle.

“It’s a very lucrative way to make money. It runs below the radar,” said U.S. Secret Service Agent Steve Scarince, who supervises the agency’s Los Angeles Fraud Task Force, and tracks the crime around the country.

Scarince said the gas theft rings in the Los Angeles area typically resell the stolen gas to gas stations for a fraction of the usual cost. The stations then sell it on — at full price — to the public. In other parts of the country, police have arrested thieves who resell the stolen gas to independent truckers or who use it themselves.

The crime typically starts with the thieves stealing credit card information or buying stolen numbers online. They then use those cards to buy gas.

But catching and prosecuting them can be a lengthy process.

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Michigan man targets the elderly in $46.5M Ponzi scheme

GRAND RAPIDS, Mich. – A western Michigan man convicted of operating a $46.5 million Ponzi scheme that targeted elderly investors was sentenced to 30 years in federal prison on Wednesday.

David McQueen, 44, was convicted earlier this year of fraud and other charges related to the scheme. Prosecutors say he promised to make steady payments to hundreds of investors, but really just moved money between accounts to keep checks from bouncing.

The courtroom was packed with victims for his sentencing hearing, The Grand Rapids Press reported. U.S. District Judge Gordon Quist said many victims are in financial ruin, including a woman who invested $500,000 with him who was then unable to pay for her sick husband’s medical care and funeral.

“Mr. McQueen does not take any responsibility for what has occurred here,” Quist said. “He can say he’s sorry in an abstract sense but I don’t think he feels it.”

Assistant U.S. Attorney Sally Berens said McQueen portrayed himself as a Christian doing good works while taking a $150,000 monthly salary. McQueen still owes $32 million in restitution, prosecutors say.

McQueen, who lived in Kent County’s Byron Township, has blamed lawyers and others for his failed investments.

His business partner, Trent Francke, pleaded guilty to securities and tax charges. Quist sentenced him Tuesday to seven years in prison.

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Phone Scams: Why People Keep Falling for the Oldest Scam in the Book

It was 11 o’clock in the morning when Luann and Betty Ann’s world was shattered with a single phone call.

“He says, ‘Do you have a daughter or a son?’ And I said, ‘Yes, I have a daughter,’” Luann said. “And he said, ‘Oh boy, there’s been a terrible accident. Four cars at an intersection. Everyone is unconscious.’”

“He said, ‘What kind of car does she have?’ And I said, ‘It’s a Kia,’” she continued. “And he said, ‘Oh yeah, there’s a Kia here. She’s unconscious.’”

The two women, who asked that their full names not be used, didn’t know who the man on the phone was but, terrified for their daughter’s life, they jumped into their own car and headed out to look for her, staying on the phone with the stranger.

“I am thinking my daughter is laying on a highway somewhere unconscious,” Betty Ann said. “And the scariest part was we didn’t even know where she was. They wouldn’t say exactly where she was.”

But then, the story took an unexpected, and even more frightening, turn.

“I was like, ‘You have to tell me exactly where you are and what the hell is going on now,’” Luann said. “And then his whole demeanor changed and he was like, ‘Now you wait a minute. … We have her, at gunpoint, and we are going to shoot her if you don’t give me $1,700.’”

But what Luann and Betty Ann didn’t know at the time was that they were on the receiving end of a phone scam, where the latest tactic in an otherwise low-tech crime is for con artists to claim to have kidnapped a loved one and are holding them for ransom.

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Sisters Indicted In Non-Profit Fraud

BALTIMORE (WJZ) — Two sisters have been charged in separate indictments for allegedly embezzling from non-profit organizations.

The indictment states that 48-year-old Sharon Harrison of Rosedale embezzled more than $1.3 million from nonprofit organizations from which she worked and received federal funding. According to the four-count indictment, Sharon Harrison was a bookkeeper for several federally-funded nonprofit groups.

Kimberly Harrison, 46, also from Rosedale, was charged in a separate indictment for allegedly embezzling funds from a federally-funded nonprofit organization she founded called Between Friends. Between Friends helped disadvantaged kids find foster homes and provided services to foster kids and families. Kimberly Harrison was also charged with bankruptcy fraud.

“Non-profit organizations that receive federal funds have a legal duty to use them for the intended purpose,” said U.S. Attorney Rod J. Rosenstein. “Sharon Harrison and Kimberly Harrison allegedly helped themselves to federal funds intended to provide services for disadvantaged children and homeless families in Baltimore.”

The Harrison sisters each face a maximum sentence of 10 years in prison for each county of theft. Kimberly Harrison faces an additional maximum penalty of five years for bankruptcy fraud.

Both of the sisters do not have a court date scheduled as of now.

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US Faces Epidemic of Phony Debt Collectors: Prosecutor

The United States is facing an epidemic of unscrupulous debt collectors who pose as law enforcement, threatening their victims with jail time unless they pay bills for things they never bought, Manhattan U.S. Attorney Preet Bharara said as he announced the arrests of seven people who worked for a Georgia-based company.

A criminal complaint was filed Tuesday against employees at Williams Scott & Associates LLC, based in Norcross, Georgia. The alleged thieves posed as debt collectors and local law enforcement, conning 6,000 people of out more than $4 million in recent years, authorities said.

Victims were tricked into believing they’d committed a crime such as fraud — then bullied into paying up bogus debts or going to jail, authorities said. According to the criminal complaint, the employees used aliases such as “Investigator Ace Rogers.”

“I don’t care if you’re nine months pregnant, I have a job to do here,” a phony collector said on one of the calls, which was recorded.

In another recorded call, a person was threatened with legal backlash.

“I will have no choice but to forward it to Los Angeles County, However, Los Angeles County will issue you a warrant for your arrest,” a recorded caller said.

Experts warned that more fraudsters are on the loose — and that federal authorities are cracking down.

“There are lots of companies that do this and victimized not just 6,000 people, but I think tens of thousands, if not hundreds of thousands of people all over the country,” Bharara said.

Actual debt collectors won’t aggressively harass consumers, said Christopher Koegel, the assistant director of the Division of Financial Practices for the Federal Trade Commission.

“A legitimate debt collector will not lie or deceive the consumer, try to abuse the consumer, or call at inappropriate times, or use other high-pressure tactics,” Koegel said.

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Secrets of an Identity Thief

Driving around Seattle with “Alice,” a convicted ID thief who didn’t want her own identity revealed, was an education.

“She knew where all the places where to go … the easiest cars to break into,” Shadel said.

Driving around a parking lot, Alice pointed out the cars she would likely target.

“Out-of-state plate, so we are probably going to hit that car because it’s parked over in the corner,” she said. “It’s easy to get into without somebody seeing.”

The out-of-state license plate signaled to Alice that the driver had probably traveled with lots of personal information.

She also pointed out seemingly unlikely targets, like work vans. “They usually had like full on credit cards to bill companies,” she said.

And cars with backpacks that are sitting out in the open. “It’s just full of goodies. It always is.”

In just a few months Alice and her colleagues stole $900,000, Shadel said, noting that “she had a little group.”

“One guy who could make IDs. Another who knew how to swipe all the laptops and put them up in the cloud. It was quite a little posse of identity thieves,” Shadel said.

Identity theft affects more than 16 million Americans each year to the tune of $24.7 billion, according to the Bureau of Justice Statistics. It is the single largest type of property crime.

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NY recovers $18 million using warrants for Facebook accounts

(Reuters) – New York prosecutors have secured more than $18 million in a series of fraud cases using warrants to access hundreds of Facebook accounts, a move the social medial firm says was unconstitutional and is still fighting.

The information obtained from Facebook Inc also helped lead to 130 indictments of civil servants, including police officers and firefighters, for Social Security fraud, according to a court document filed by the Manhattan District Attorney’s office in a state appeals court on Wednesday.

More than 90 defendants have pleaded guilty and agreed to pay more than $18 million in restitution, the brief said.

The prosecutors said the numbers undermine Facebook’s claim that the warrants, which applied to 381 users’ photos, private messages and other account information, were too broad and violated the constitutional ban on unreasonable searches.

Facebook has drawn support in its challenge to the warrants from other technology and civil liberties groups, including Google Inc, Microsoft Corp, Twitter Inc, and the American Civil Liberties Union.

A five-judge panel will hear the case in December. Facebook complied with the warrants last year after a state judge approved them.

A victory for Facebook would not directly impact the pending fraud cases, but could lead to judges throwing out evidence taken from the site in some cases.

The district attorney in Wednesday’s filing said Facebook does not have the legal standing to assert its users’ constitutional rights on their behalf.

Prosecutors also urged the court to reject Facebook’s claim that all its customers have an expectation of privacy when using the site.

“Some customers treat their accounts as ‘digital homes,’ and maintain some degree of privacy,” the brief said. “Others treat their accounts more as digital billboards, broadcasting material to dozens or even hundreds of others, thus abandoning any claim of privacy.”

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Kansas City Woman Pleads Guilty in $3 Million Fraud

KANSAS CITY, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., woman pleaded guilty in federal court today to a nearly $3 million fraud scheme that forced her employer out of business.

Irene Marie Brooner, 52, of Kansas City, pleaded guilty before U.S. District Judge Beth Phillips to bank fraud.

Brooner, a certified public accountant, worked at Galvmet, Inc., a sheet metal fabrication facility and steel service center located in Kansas City, from 2001 until her termination in February 2014. At its peak in 2008, the company had 26 employees and $14 million in annual sales. Galvmet filed for bankruptcy and ceased operations in 2014. At the time of closing, the company had 18 to 20 employees and $10 million in annual sales.

Brooner’s duties as controller included managing payroll, accounts receivable and payable, and maintaining the ledger at Galvmet.

Brooner admitted that, over a period of more than 10 years (January 2004 until February 2014), she created a total of 389 unauthorized Automated Clearing House (ACH) transactions from Galvmet’s bank account to her personal bank accounts. (An ACH is a batch-oriented funds transfer system that includes direct deposits of payroll from companies.) Those unauthorized ACH transactions included 148 payments to her checking account and 133 payments to her savings account. Brooner also defrauded Galvmet by inflating her salary. From March 2004 to December 2011, Brooner manipulated the payroll account to increase her net pay on approximately 108 payroll checks.

Brooner’s fraud scheme resulted in a loss of at least $1,863,914 to Galvmet. As a result, Galvmet ceased operations. While reviewing bank records during the filing of Galvmet’s Chapter 13 bankruptcy in February 2014, the company’s president noticed unauthorized transfers from Galvmet’s payroll account to Brooner’s personal account. He reported the apparent embezzlement to the FBI.

To keep the scheme going, Brooner also falsified documents to support Galvmet’s operating loan with Missouri Bank & Trust, causing an additional loss to the bank of $1.1 million. The total loss from Brooner’s fraud scheme was at least $2,963,914.

Brooner spent the embezzled funds on personal items. According to today’s plea agreement, Brooner spent some of the proceeds to remodel, stock, furnish and decorate the ornately-finished bar in the basement of her new home. The bar, which she called “the Dirty Duck,” includes seating for approximately 15, a granite bar top, four or five tap lines, a refrigeration system, three flat-screen televisions, a smoke machine at the entrance, two couches and stained wainscoting around the room approximately eight feet tall. Mannequins, positioned throughout the bar, are outfitted with authentic U.S. and German uniforms and weaponry from the World War II era, including a Thompson sub-machine gun and multiple M-1 Garands with attached bayonets. Brooner told FBI agents that her husband, a carpenter, remodeled the bar in 2003 and 2004. From 2004 to 2014, Brooner spent $18,383 on alcohol.

Brooner’s spending included paying off her mortgage for $289,290, buying $81,686 in jewelry, and spending at least $400,392 on clothing and other retail, $97,180 on restaurants, $78,439 on vehicles, $169,389 on furniture and home decor, $62,003 on travel, $38,317 on electronics, $21,346 in ATM withdrawals, $59,571 on spa visits and beauty items, $68,745 on tuition for her children, $18,383 on alcohol, $104,060 to her children, $216,377 in assorted checks under $500, $64,557 in donations, $254,168 in other credit cards, and by purchasing other items.

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Facebook helps catch Phoenix woman for insurance fraud

PHOENIX (CBS5)-A Phoenix woman tried to get away with $26,500 after claiming she lost her wedding rings.

But her lie was uncovered when Facebook photos surfaced of her wearing the distinctive rings, according to the Arizona Department of Insurance.

In June 2013, Maria Apodaca Simmons made a claim on her policy through Travelers Insurance Company for rings she said she lost while swimming in the Pacific Ocean a few days after her wedding in May.

She also filed a $14,000 claim on her husband’s wedding band in October 2013, claiming it was lost while he was swimming on vacation.

A State Farm employee thought something was fishy after she interviewed Simmons about her husband’s ring.

Simmons was wearing the rings that matched the photos from the appraisal she used for the Travelers policy, and the state Department of Insurance investigators were called in. They discovered a Facebook page with a photo of her wearing the same rings.

A search warrant was issued and the rings were found.

Simmons first said the rings were duplicates, but the jeweler told investigators that he had only made the one set.

On Tuesday, Simmons pleaded guilty to two counts of insurance fraud, and as part of a plea deal, she’ll be put on probation and pay $26,953.60 to Travelers Insurance and $1,005.11 to the Department of Insurance for investigative costs.

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56 Million Credit Cards Affected in Security Breach

NEW YORK (AP) — Home Depot said Thursday that a data breach that lasted for months at its stores in the U.S. and Canada affected 56 million debit and credit cards, far more than a pre-Christmas 2013 attack on Target customers.

The size of the theft at Home Depot trails only that of TJX Companies’ heist of 90 million records disclosed in 2007. Target’s breach compromised 40 million credit and debit cards.

Home Depot, the nation’s largest home improvement retailer, said that the malware used in the data breach that took place between April and September has been eliminated.

It said there was no evidence that debit PIN numbers were compromised or that the breach affected stores in Mexico or customers who shopped online at Homedepot.com. It said it has also completed a “major” payment security project that provides enhanced encryption of customers’ payment data in the company’s U.S. stores.

But unlike Target’s breach, which sent the retailer’s sales and profits falling as wary shoppers went elsewhere, customers seem to have stuck with Atlanta-based Home Depot. Still, the breach’s ultimate cost to the company remains unknown. Greg Melich, an analyst at International Strategy & Investment Group LLC, estimates the costs will run in the several hundred million dollars, similar to Target’s breach.

“This is a massive breach, and a lot of people are affected,” said John Kindervag, vice president and principal analyst at Forrester Research. But he added, “Home Depot is very lucky that Target happened because there is this numbness factor.”
Customers appear to be growing used to breaches, following a string of them this past year, including at Michaels, SuperValu and Neiman Marcus. Home Depot might have also benefited from the disclosure of the breach coming in September, months after the spring season, which is the busiest time of year for home improvement.

And unlike Target, which has a myriad of competitors, analysts note that home-improvement shoppers don’t have many options. Moreover, Home Depot’s customer base is different from Target’s. Nearly 40 percent of Home Depot’s sales come from professional and contractor services. Those buyers tend to be fiercely loyal and shop a couple of times a week for supplies.

Home Depot on Thursday confirmed its sales-growth estimates for the fiscal year and said it expects to earn $4.54 per share in fiscal 2014, up 2 cents from its prior guidance. The company’s fiscal 2014 outlook includes estimates for the cost to investigate the data breach, providing credit monitoring services to its customers, increasing call center staffing and paying legal and professional services.

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