On Q Professional Investigations

With stiff sentences for 21 conspirators last week in the United States and a round of indictments in India, the Justice Department says it has broken up what appeared to be the nation’s first large-scale, multinational telephone fraud operation.

Over four years, more than 15,000 victims in the United States lost “hundreds of millions” of dollars to the sophisticated scam, and more than 50,000 individuals had their personal information misused, the department said Friday. The money was routed through call centers in India back to the ringleaders in eight states.

The fraudulent calls came suddenly and frequently while the scam was active from 2012 to 2016, according to court documents. A person posing as an Internal Revenue Service or immigration official was on the phone, threatening arrest, deportation or other penalties if the victims did not immediately pay their debts with prepaid cards or wire transfers.

The calls targeted the most vulnerable Americans, including immigrants and older people.

An 85-year old woman in San Diego paid $12,300 to people claiming to be I.R.S. employees who threatened her with arrest for tax violations.

A Chicago man paid $5,070 after being threatened with arrest and deportation by supposed state police and immigration authorities, the indictment said.

The words “U.S. Government” showed up as the caller I.D. on a number from which a New Hampshire woman was told to pay the I.R.S. $3,980 in payment cards, the court papers said.

In the announcement on Friday, the department said 21 people living in eight states — Illinois, Arizona, Florida, California, Alabama, Indiana, New Jersey and Texas — were sentenced last week in Houston to prison for up to 20 years for their role in the scheme.

Two other conspirators in Illinois were sentenced in February to between two years to just over four years for conspiracy, and a third person in Arizona was given probation in a plea agreement, it said.

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Those struggling to make ends meet sometimes rely on short-term, unsecured payday loans when they need quick cash.

Richard Moseley, Sr.—through his group of payday lending businesses known as the Hydra Lenders—preyed on these consumers’ financial vulnerability. His businesses scammed more than 600,000 Americans by charging them illegally high interest rates and even stealing their identities.

“A lot of these victims had to rebuild their financial lives. They had to shut down their bank accounts and open new ones. This was one of the only ways for victims to stop being defrauded,” said FBI New York Supervisory Special Agent Matthew Taylor, who oversaw the investigation. “Some of the individuals victimized were financially struggling at the time—including grandmothers, grandfathers, and former military members who served our country. In most cases, victims did not get the money back that was illegally taken from them.”

The FBI first learned about the Hydra Lenders when another government agency brought a consumer lawsuit against the group to the Bureau’s attention. Through traditional investigative techniques such as reviewing financial records, interviewing employees and victims, and collaborating with partner agencies, the FBI learned that Moseley’s enterprise routinely broke the law in issuing and collecting on loans.

From 2004 to 2014, the Hydra Lenders offered payday loans online to consumers across the country, even in states where payday lending was effectively outlawed. Some of the group’s illegal tactics included:

Charging illegally high interest rates of more than 700 percent

Using deceptive and misleading loan documentation

Taking additional, undisclosed fees from customers’ bank accounts

Withdrawing only the interest payment from the borrowers’ accounts and not applying any funds toward the principal, deepening their debt burden

Setting up payday loans for customers who had not agreed to them but had simply inquired about loan eligibility

As borrowers began to complain to state governments and consumer protection organizations, Moseley dodged regulators by insisting that his businesses were located overseas in Nevis and New Zealand and could not be regulated. In reality, the FBI’s investigation showed the enterprise operated entirely out of offices in Kansas City, Missouri, with all of its employees, bank accounts, and other aspects of the businesses located there. Moseley simply used fake letterhead and a mail forwarding service to give the appearance of an overseas location.

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Cybercrime sounds like something done in a dark room by a group of hackers.

But according to the law, using a fraudulent account number to buy something on Amazon is a cybercrime, and the 2nd Judicial District Prosecutor’s Office is making sure people pay for their crimes.

Assistant Prosecutor Grant DeProw told The Jonesboro Sun his office is looking at establishing a circuit court cybercrime fee that could be as much as $500.

“Any offenses that are computer related will have a fee attached to it along with the original punishment,” DeProw said.

DeProw said in 2017 Arkansas legislators passed a bill that allowed them to add a cybercrime fee to almost any felony that requires special electronic investigation.

According to AR Code 5-4-706, a circuit court can assess an additional fee of up to $500 for each applicable felony conviction for an offense that involved the use of a computer, an electronic device or the internet; and the investigation of which expended specialized law enforcement personnel or materials designed to investigate offenses involving a computer, an electronic device or the internet.

Cybercrimes range from possession of child pornography and cyber-attacks to nonpayment or non-delivery scams.

“If it requires someone who received specialized training or special equipment, then it would be eligible for the fee,” DeProw said. “This includes identity theft and the use of stolen debit cards.”

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The GI Bill provides the country’s service members and veterans a free or reduced-cost college education to those who qualify, offering them a head start on their return to civilian life. But one group of fraudsters used the Post-9/11 GI Bill and other U.S. Department of Defense educational programs for veterans as a piggy bank to line their own pockets while cheating more than 2,500 service members out of an education they were entitled to under the law.

“This was straight up stealing. Stealing money for veterans that was supposed to help them advance their careers and make themselves more marketable to employers after coming out of the military,” said FBI Special Agent James Eagleeye, who investigated the case out of the FBI’s Newark Division along with investigators from the Department of Veterans Affairs (VA), the Department of Defense, and Department of Education.

The scheme was a basic bait-and-switch. A company called Ed4Mil worked with two schools: one, the private liberal arts Caldwell University in New Jersey; the other, an online correspondence school hired by Ed4Mil to develop and administer courses. Ed4Mil aggressively recruited service members and veterans, offering them free computers and gift cards to sign up for what they thought were classes taught by Caldwell University. Yet when Ed4Mil enrolled the students, they would put them in and pay for unaccredited correspondence school classes—but then charge the government the university tuition rates and pocket the difference.

At the center of the scheme was Ed4Mil founder and president David Alvey. The Harrisburg, Pennsylvania resident saw a business opportunity in educating veterans with government funds but learned that when the government provides tuition and other educational benefits directly to a school, certain requirements must be met that his startup could not satisfy.

To get around the law, Alvey conspired with a Caldwell University official to use the university’s name on coursework that the VA would not have approved. The official—then an associate dean at the school—falsely certified that students were taking the same courses from the same instructors who taught on campus at Caldwell.

But the veterans were instead enrolled in online courses like archery and heavy diesel mechanics that were actually taught by the correspondence school. Students sometimes received a housing allowance for the online school, in violation of the rules governing educational benefits.

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The Defense Security Service is preparing to take over all background investigations for civilian and defense agencies and doesn’t want to inherit stale and potentially broken processes, officials told Nextgov.

The Defense Department office is currently reviewing white papers obtained through an other transaction authority solicitation seeking innovative methods for conducting background checks of current and potential federal employees who need security clearances.

The project is not about the technology behind background investigations process but rather how to innovate the process itself—from when the SF-86 form is filled out to when the clearance decision is made by the agency—according to Tara Petersen, head of DSS Office of Acquisitions, and her deputy, Stephen Heath.

“We’re really looking broader at the process itself,” Petersen said. “We’re looking to prototype a process.”

“Don’t think of the prototype like a widget,” Heath said. “It’s looking at that whole process: Where can we improve on that, where can we potentially save costs, where can we save time and where can we bring technology advancements into the process that are already out there in the commercial marketplace?”

After the 2015 data breach of Office of Personnel Management that exposed the personal information on more than 20 million current and former federal employees, background investigation duties were transferred to a new agency, the National Background Investigation Bureau with technical support delegated to the Defense Department.

But the security clearance backlog grew to more than 700,000 and the Government Accountability Office added the investigations process to its High-Risk List this year. Congress also passed legislation last year requiring DSS to take over all defense clearances work currently done by NBIB. Now, the administration wants to shift responsibility for all government background checks—defense and civilian—over to the Defense Department. While the lawmakers work that out, DSS is getting ready.

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WASHINGTON—U.S. Customs and Border Protection (CBP) announced today a new formal partnership arrangement with Otter Products, LLC, maker of OtterBox and LifeProof brand phone cases, as part of the Donations Acceptance Program. Under its partnership with CBP, Otter Products will donate authentication devices for CBP officers and import specialists to use to quickly and accurately detect counterfeit Otter Products merchandise entering the United States.

“Building off the success of localized enforcement efforts, CBP is now working hand-in-hand with Otter Products to target and deploy authentication devices on a nation-wide scale,” said Todd C. Owen, Executive Assistant Commissioner, Office of Field Operations. “CBP’s formal partnership with Otter Products will help us broadly deliver these highly effective tools to the front line officers and trade specialists who need them most.”

As part of its rigorous and ongoing brand protection efforts, Otter Products intends to partner with CBP for the long term by resupplying and, if necessary, upgrading authentication devices as CBP’s detection needs evolve.

“CBP’s formal partnership with Otter Products extends well beyond the initial deployment of authentication devices,” said Brenda B. Smith, Executive Assistant Commissioner, Office of Trade. “Our goal is to provide continuous, organized feedback to Otter Products pertaining to the ongoing use of these devices, their effectiveness, and opportunities to improve upon them so that we may jointly outpace those who seek to profit off counterfeit goods.”

The Donations Acceptance Program broadly enables CBP to accept donations of real property, personal property (including monetary donations) and non-personal services from public and private sector entities in support of CBP operations. Accepted donations may be used for port of entry construction, alterations, operations, and maintenance activities.

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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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The human body emits a staggering 36 million microbes into the outside environment—every single hour. Forensic scientists have looked to this signature as a kind of microscopic trail that may track down suspects, or even reconstruct movements in a crime.

The Burglary Microbiome Project, an ongoing study using mock crime scenes and scientific sampling of homes, residents and intruders, is underway to lay the groundwork for implementing the concept in real life, according to a group of scientists from three colleges.

The initial results were presented by the investigators at the American Society of Microbiology’s annual Microbe meeting in Atlanta earlier this month.

“This study is one of the first to use the microbiome as a forensic tool using unique markers rather than variances in microbial community structure,” said Jarrad Hampton-Marcell, a doctoral candidate at the University of Illinois at Chicago, who presented at the conference.

The researchers, including those from Nova Southeastern University and the University of Chicago, first established baselines of the microbiome in the “crime scenes.”

They started by taking bacterial samples from the noses and hands of the residents, as well as various surfaces within their homes.

Overall, a total of 9,965 unique operational taxonomic units, or OTUs, were identified among 30 people who participated in the experiment.

The baseline established, they then conducted the mock burglaries, in which a suspect entered into the microbiome, dragging their own signature through the domestic environment, according to the researchers.

The invaders’ microbial signature was detected and mapped to the homes at greater than 60 percent accuracy, according to the scientists.

“When observing the change in OTUs over time, appearance/disappearance rates showed no significant difference in the absence or presence of other individuals,” add the researchers, in an American Society of Microbiology statement on the work.

But more work remains to refine the markers, and distinguish further markers to improve the accuracy, they said.

“With further improvement in detection of stable markers, the human microbiome may serve as an additional tool for human profiling and crime scene investigations,” added Hampton-Marcell.

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In July 2008, special agents from the FBI Sacramento Field Office executed a search warrant at the residence of a suspect and interviewed other individuals in connection with a mortgage fraud investigation.

In addition to finding evidence for their own case, investigators uncovered ties to what appeared to be a separate mortgage fraud scheme, and FBI Sacramento opened another case, working in partnership with the Internal Revenue Service (IRS) Criminal Investigation.

The main subject of the second case was Lee Loomis, president of Loomis Wealth Solutions, a company based in Roseville, California, but operating in about half a dozen states. And it wasn’t long before FBI and IRS investigators realized they were dealing with a much broader criminal scheme, and that mortgage fraud was just the tip of the iceberg.

After a long-term and complex investigation by law enforcement, Loomis was charged, pleaded guilty, and sentenced earlier this year for running a multi-faceted investment fraud/Ponzi scheme that caused millions of dollars in losses to more than 183 investors.

By reviewing voluminous amounts of evidence—including personal and company records, real estate records, bank records, financial statements, etc.—and questioning victims, employees of Loomis-owned entities, and others, investigators learned that from 2006 through 2008, Loomis offered what he called a “wealth-building program.”

During seminars about his company held at hotels and casinos, he boasted of unusually high rates of return for anyone who invested with him, and he advertised individualized financial family planning to help prospective clients earn money for college tuitions and retirement. Those attending the seminars were then asked to submit financial information including tax returns, pay stubs, copies of bills, and information concerning their home equity. Loomis would analyze this information and—targeting families with substantial home equity and good credit—invite them to a private two-day workshop.

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Seymour, Indiana, in the 1990s was a Midwestern town with rural roots and a comfortable, small-town feel. Parents felt safe letting their children walk to Girl Scout meetings with friends and ride their bikes unchaperoned.

All that changed on January 20, 1999, when a 10-year-old girl waiting for her father after gymnastics practice was abducted and molested. The man who approached her outside a local girl’s club said he had locked the keys in his car and needed someone with slender arms to reach them.

The attack shocked the community, all the more when the suspect fled before he could be apprehended. At the time, no one realized it would take nearly two decades to bring justice to the victim and her family, and a sense of closure to the community—or that an Indiana State Trooper who was born and raised in Seymour, and is now an FBI agent, would play a central role in resolving the case.

On that cold January day, Charley Hollin forced the girl into his car at knifepoint, drove away, and sexually assaulted her. Afterward, he made the girl leave the car naked, and her clothes were thrown out after her. Hollin also mistakenly threw out his own jacket, which contained his day planner.

Todd Prewitt was an Indiana State Police trooper at the time, and although he wasn’t assigned to the investigation, he took a keen interest. The crime had occurred in his district, and Seymour was his hometown. “I didn’t know the victim,” he said, “but I had family friends who sent their kids to that girl’s club.”

The assault itself was tragic, but then justice was not served. Hollin’s identity was known to authorities—and reported by the media—because they had his day planner. But the victim could not positively identify her assailant with full certainty, so authorities were forced to wait for the results of DNA testing before they could arrest Hollin and charge him with the crime. Hollin took that opportunity to flee.

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