Professor Fraud

The 12 Scams of Christmas: Bonus Reel - Gift Cards, Check Washing, RFID Sleeves, Fraud Examination MBA

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Concluding Professor Fraud's Twelve Scams of Christmas, here is ...

Bonus Reel:  Gift Cards, Check Washing, RFID Sleeves & Fraud Examination MBA

 

To wrap up my "12 Scams of Christmas", I was invited to appear on FOX Chicago's Good Day Chicago on Christmas Eve.

During my on-air appearance I discussed with hosts Dawn Hasbrouck and Larry Yellen a number of fraud topics, including: 

Gift Cards:  The FTC has issued a warning about gift card fraud.  Specifically, fraudsters will enter a retail store, select a gift card off the rack, and open the packaging.  The bad guy then swipes the magnetic stripe on their own skimmer, scratch off the cover over the card serial number, and write down the serial number and the card's 800 telephone number.  The fraudster then places the card back on the store rack.  Over the next few days, the scam artist keeps calling the 800 number, monitoring for when the gift card is purchased.  Once the fraudster gets notice that the gift card was activated, he gets on line quickly to use up the value on the card with his own purchases.  The result: the gift card recipient receives a gift totaly drained of value.
Bottom Line:  Do not buy any gift card from a retailer if the card packaging has been tampered, or if the security material has been scratched off.  Give the card to the store manager, and select a new card off the rack.

Check Washing:  A particularly nasty fraud is "check washing".  This is the scam when a signed check is intercepted by the fraudster - often in outgoing mail placed in a rural-type mailbox (the ones with the red flags).  The perps place a piece of tape over the signature, then, using a formula of household chemicals, wash the rest of the pen ink off of the check.  After removing the tape, the fraudster has a signed, blank check that he can use to drain your checking account.
Bottom Line:  Only use a "gel ink" pen when writing checks!  The pigments in gel ink latches onto the fibers in the check paper, making check washing impossible, frustrating the fraudster.  Gel ink pens are available in most office supply stores.

RFID Sleeves:  As more credit card companies embed Radio Frequency ID (RFID) chips in their credit cards, there is increasing fear that "high-tech pickpockets" will be able to access valuable credit card information off of your card by simply coming near you with a "souped-up" RFID scanner.
Bottom Line:  Place your RFID credit cards in RFID sleeves.  These sleeves, available from retailers like Identity Stronghold (www.IDstronghold.com) will block radio signals from your RFID credit cards, preventing a fraudster from stealing your credit cards' data.

Fraud Examination MBA:  With the growing awareness of the pervasiveness of fraud in business and in society, many people are interested in careers in fraud examination. 
Botton Line:  Anyone interested in a career in the hot field of fraud examination may want to check out the website for the Saint Xavier University Center for the Study of Fraud and Corruption (www.SXU.edu/fraud), where they can read about the various graduate programs in fraud examination offered at SXU, including the 15-month MBA offered in the Chicago Loop.


Just remember:  Fraud Never Sleeps! 

So stay vigilant! 

And have a Happy - and Secure - NEW YEAR!


(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption were featured on FOX Chicago's "Good Day Chicago" during the 12 weekday mornings before Christmas.)

Continue reading...

The 12 Scams of Christmas: #12 - Secret Skimmer Fraud

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #12:  Secret Skimmer Fraud

 

And suddenly it's January. 

You had a great Holiday season. 

But the piper must be paid ... and so the credit card bills start rolling in. 

But while looking over one of the bills you notice a slew of charges that you didn't make, mostly for on-line purchases. 

How could this be?  Your wallet wasn't stolen or your pockets picked.  Your credit card was never out of your sight.

Or was it?

Suddenly you remember that day when you were finishing up your Holiday shopping, and that one store clerk. 

Oh, he was very helpful, but said that his sales register wasn't working properly, so he had to take your credit card to another register to ring up the sale. 

The receipt he handed you seemed fine, but you had a funny feeling there was something more going on.

Well, your instincts were right

You're a victim of a duplicate skimmer fraud

Some unscrupulous store clerks have been known to carry their own credit card readers ... maybe hidden in a purse, in a drawer under the sales register, or even under a jacket. 

They go ahead and skim your credit card in a register to complete your sale, but also give it a quick swipe in their own credit card reader, to record the valuable information contained on your credit card's magnetic stripe. 

A quick look on the back of your card to get the three-digit code back there, and the clerk has everything that's needed to start charging on your account.

So while you're doing your Holiday shopping try to avoid losing possession of your credit card. 

But if you must hand a clerk your card, keep the clerk and your card in sight at all times!  Walk with the clerk to the other register if that's what it takes to keep an eye on your credit card.

Be careful out there.  Don't let a quick, fraudulent credit card swipe ... swipe you of your Holiday fun!


Remember, fraud never sleeps! 

So stay vigilant! 

And have a Happy - and Secure - Holiday Season!


(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption were featured on FOX Chicago's "Good Day Chicago" during the 12 weekday mornings before Christmas.)


Next time: Bonus Video - Gift Cards, Check Washing & RFID Sleaves.

Continue reading...

The 12 Scams of Christmas: #11 - Fraudulent Check Scam

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #11:  Fraudulent Check Scam


 
This one is for you small business owners. 

You've been working hard so that your Holiday sales put you in the black ... when suddenly you receive a great email. 

It seems that a brand new customer wants to place a huge order!  Everything looks normal, except for one thing:  this customer says that since a third party owes him a lot of money, you will be receiving a check (or some money orders) from this third party in payment for the order. 

However -- you are told -- since the check may be for a sum greater than the order, please deposit the check, keep your share for the cost of the order, and then wire any excess funds to the customer via Western Union. 

The check arrives, and it's for a huge sum. So you deposit the check at your bank, ship the order, and when the funds become available, you wire the excess amount to your new customer, per his instructions. 

Then days later, your bank calls

Turns out the check was bogus

Now you're not just out for the cost of the order, but you're also on the hook to the bank for all the funds you wired out  -- to a customer who you'll never see again!

So, business people, unless you really know and trust your customer, avoid any sales with a third party payer that is structured in this way

And if you do accept such a sale, remember: after you deposit a check, banks are required to make the funds available, sometimes long before the check clears.  So hold off shipping merchandise or wiring excess funds until you're sure that the check has cleared and has been honored.

While red is a popular color during the Holidays, the one place you don't want to see it is in the ink in your ledger book.


Remember, fraud never sleeps! 

So stay vigilant! 

And have a Happy - and Secure - Holiday Season!


(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption were featured on FOX Chicago's "Good Day Chicago" for the 12 weekday mornings prior to Christmas.)


Next time: Secret Skimmer Fraud

Continue reading...

The 12 Scams of Christmas: #10 - Phony Cyber Shopping Sites

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #10: Phony Cyber Shopping Sites

 


Cyber shopping during the Holidays is great! 

It's convenient, there are some great bargains online, and you get to avoid the Holiday mob at the mall!  

But are you certain that you've been shopping on your favorite retailer's actual website?

Recently, federal agents have shut down and seized a number of bogus sites that appeared to be the authentic websites for legitimate stores.  And while the Feds took down a bunch of these sites, it is believed that there are a lot more out there. 

The fraudsters who run these sites aren't out to sell you goods, but are only out to con you into handing over to them your credit card or debit card information.

So before you cyber shop, make sure you have the authentic website!  If necessary, telephone the store and ask for their URL - their web address. 

Enter web addresses meticulously!  Some fraudsters have been known to register web addresses that are spelled just slightly different from a legitimate retailer's URL. 

Examine web addresses for extensions, especially ones that seem to redirect you to another site. 

And don't use a retailer's website if the URL ends with an unfamiliar or inappropriate country code.

Cyber shopping can be wonderful, but cyber fraud can leave you as empty and hanging as a Christmas stocking on December 26th!


Remember, fraud never sleeps! 

So stay vigilant! 

And have a Happy - and Secure - Holiday Season!


(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption will be featured every weekday morning on FOX Chicago's "Good Day Chicago" from now until Christmas.)


Next time: The Fraudulent Check Scam

Continue reading...

The 12 Scams of Christmas: #9 - The Phony Salesclerk Scam

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #9: The Phony Salesclerk Scam
  


Don't you just love Holiday shopping? 

And so many of the salesclerks are so courteous. 

Why they may even approach you on the sales floor, welcome you to their store, ask how you're doing, and offer to relieve you of the burden of the items that you've already picked out so that you can continue shopping. 

So you hand over the armful of merchandise, along with your credit card or cash so that the salesclerk can ring up the items you've selected so far.

But wait. 

Are you sure that was a salesclerk? 

Did you notice if they were wearing a store-issued nametag or the distinctive store vest? 

Or did you just fall victim to the phony salesclerk fraud? 

You are a victim if, after leaving you, the "salesclerk" walks out of sight, dumps the merchandise you handed over, and quickly leave the store with your cash or credit card.

So what can you do to avoid being taken this way? 

If you can, take your merchandise to the sales register yourself. 

And if a store employee offers to help, see that the clerk is wearing the store's nametag, vest, or other identifying feature. 

And never have the clerk ring up a sale in your absence!  Just allow the clerk to take your selected items to be held at the sales register, where everything can be rung up once you are done shopping.

You have enough to do to complete your own holiday shopping ... you don't need to help a fraudster with theirs!

 

Remember, fraud never sleeps! 

So stay vigilant! 

And have a Happy - and Secure - Holiday Season!


(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption will be featured every weekday morning on FOX Chicago's "Good Day Chicago" from now until Christmas.)


Next time: Phony Cyber Shopping Sites

Continue reading...

The 12 Scams of Christmas: #8 - ATM Frauds

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #8: ATM Frauds
 


So you're heading out for a Holiday party with some friends and colleagues.  But first you need to get some cash. 

Why look!  There's an ATM right over there.

But before you use that ATM, make sure that you're just getting cash - and not getting scammed. 

There are a number of ways fraudsters can manipulate ATMs to get what they want - your ATM or debit card account number and your PIN - your personal identification number. 

With these two pieces of information, a scammer can drain you bank account.

So what can you do? 

Always be vigilant when using an ATM. 

Especially be careful at ATMs that suddenly appear on the street or in unsecured building lobbies.  Fraudsters have been known to place their own ATMs temporarily in high traffic areas just to capture card numbers and PINs. 

And even the most trustworthy ATMs can be tampered by fraudsters for their own evil purposes. 

Don't use an ATM if a replacement card reader - a "skimmer" - or superimposed key pad have been placed on the ATM.  And be on the lookout for small pinhole video cameras that are aimed at the keypad.  All of these devices are used to steal the valuable card numbers and PINs. 

And whenever you're entering your PIN, cover the hand punching in the numbers with the other hand so that any cameras - or shoulder surfers - can't make out your PIN. 

So be careful when using an ATM.  You don't want a simple cash-run to leave you with a Ho-Ho-Hopeless Holiday.


Remember, fraud never sleeps! 

So stay vigilant! 

And have a Happy - and Secure - Holiday Season!


(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption will be featured every weekday morning on FOX Chicago's "Good Day Chicago" from now until Christmas.)


Next time:  The Phony Sales Clerk Scam

Continue reading...

The 12 Scams of Christmas: #7 - Hi-Tech Pickpocketing

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #7: Hi-Tech Pickpocketing

 


Do you have a credit card that has a radio frequency identification chip - an RFID - imbedded in it? 

You know, the credit cards that you just have to wave in front of a credit card terminal and when the lights go on, your transaction goes through. 

Some fraud researchers have found that by using a well-concealed, souped-up scanner, they've been able to capture RFID credit card account numbers - and other identifying information - off of people in a crowd just by standing near a cardholder's wallet or purse. 

And while many banks encrypt the data on RFID credit cards, and there have been few police reports to date on this sort of high-tech pickpocketing, many fraud experts feel that potential for massive fraud exists.

So how do you foil these potential electronic fraudsters? 

With foil ! 

While there are many good commercial security sleeves for RFID cards available on the market, a number of experts suggest that by simply bundling your RFID credit cards together and wrapping them in a piece of crinkled aluminum foil, the RFID signal should become so weak and garbled that it is too difficult for a high-tech pickpocket to capture any information in a casual or crowd setting. 

Curses, foiled again!    

 

Remember, fraud never sleeps! 

So stay vigilant! 

And have a Happy - and Secure - Holiday Season!


(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption will be featured every weekday morning on FOX Chicago's "Good Day Chicago" from now until Christmas.)


Next time:  ATM Frauds

Continue reading...

The 12 Scams of Christmas: #6 - Credit Card Refund Fraud

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #6: Credit Card Refund Fraud

 

 

It happens every Holiday Season.  You buy too many gifts.  Or you find a better gift for that special someone. 

So you're back at the store where you bought the item, asking the clerk to apply the return credit to the credit card on which you purchased the gift. 

The clerk goes away, processes the transaction, and returns with a long slip of paper which the clerk has conveniently folded up, and drops it into one of your shopping bags.

Did you look at the slip? 

Carefully?

You should ... because some unscrupulous clerks have been known to process these transactions fraudulently. 

Instead of applying the return to your credit card, they apply it to their own. 

Or they process it as a cash return, pocketing the cash, and handing you just a long, folded slip of paper. 

And if you don't examine the return receipt, you might not realize that you were scammed until weeks later when you get your credit card bill.  And by then, it may be difficult to prove that you were defrauded.

So always carefully examine your return receipts. 

Check to make sure the transaction wasn't processed as a cash return. 

And if it was processed as a credit card refund, make sure it was credited to your credit card.

Follow these tips, and you'll many happy returns this Holiday Season!


Remember, fraud never sleeps! 

So stay vigilant! 

And have a Happy - and Secure - Holiday Season!


(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption will be featured every weekday morning on FOX Chicago's "Good Day Chicago" from now until Christmas.)


Next time:  RFID Credit Cards / Hi-Tech Pickpocketing   

Continue reading...

The 12 Scams of Christmas: # 5 - Phony Charity Scams

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #5: Phony Charity Scams

 

 

The Holidays are about giving, and nothing gives you that Holiday glow like contributing to a charity. 

And besides, at this time of year, it can be great tax strategy, too! 

While there are many worthwhile charities, there are also plenty of unscrupulous fraudsters more than willing to masquerade as a charity in order to get at your money. 

Adding to this situation is the fact that many charities use telephone solicitation campaigns and -- because of low processing costs -- prefer online giving. 

So be wary of telephone solicitations, especially high-pressure calls.  Do not rely on Caller ID ... that too can be manipulated.  Any good charity will allow you to call them on an independently verifiable telephone number.

And if making a contribution online, be cautious with responding via a link in a solicitation email.  Instead, go on your own to the charity's official website. 

And when you're at the screen for making your contribution, make sure that the URL -- the webpage address -- begins with the letters "https", not just "http" in order to ensure a secure transaction.

So go ahead and include in your Holiday celebration generous contributions to your favorite church, non-profit ... or university ... of your choice. 

Just make sure that your money goes toward good works ... not to evil-doers.


Remember, fraud never sleeps! 

So stay vigilant! 

And have a Happy - and Secure - Holiday Season!


(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption will be featured every weekday morning on FOX Chicago's "Good Day Chicago" from now until Christmas.)


Next time:  Credit Card Refund Fraud   

Continue reading...

The 12 Scams of Christmas: #4 - Phony Order Confirmation / Phishing Fraud

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #4: Phony Order Confirmation / Phishing Fraud

Just checking my emails.

Oh look, an email from a retailer informing me that there's a problem with the Christmas presents I ordered. 

That's funny ... the email isn't addressed to me, but to "Dear Customer"... there are some misspellings ... and poor grammar. 

And you know, I don't even remember ordering from this store. 

It's undoubtedly an example of a growing phishing scam known as the "Phony Order Confirmation Fraud."

What the fraudsters would like you to do is click on the link in the email, which will take you to a site where you'll be asked to supply them with your personal identifiers, such as social security number, credit card numbers, bank account information, etc. 

If you receive such an email, ignore it. 

But if you think there might be a problem with an order you've made, DO NOT click on the link in the email!  Rather, contact the retailer directly to check on your order. 

The Holidays are all about giving ... but not giving away your identity!

 

So remember, fraud never sleeps!
 
So stay vigilant! 

And have a Happy - and Secure - Holiday Season!

(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption, will be featured every weekday morning on FOX Chicago's "Good Day Chicago" from now until Christmas.

 

Next time:  Charity Scams !!! 

Continue reading...

The 12 Scams of Christmas: #3 - Counterfeit Goods

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #3: Counterfeit Goods 

 "Psst, hey, buddy, how about a designer watch?"

"For real?" 

Of course not! 

It's just another transaction in the multi-billion dollar market in fraudulent counterfeit goods.
But what's the harm? 
Well, some counterfeit goods have been tied to international organized crime and terrorist groups. 
Besides that, counterfeit goods are generally low quality. 
Fraudulent software and peripherals have been known to trash computers.
Some counterfeit appliances have started fires.

And guys, when your gal's girlfriends inform her that the designer handbag you got her is really a cheap knock-off ... well ... I assure you ... you'll wish you had paid full price for the real thing.


So remember, fraud never sleeps! 
So stay vigilant! 
And have a Happy - and Secure - Holiday Season!

(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption, will be featured every weekday morning on FOX Chicago's "Good Day Chicago" from now until Christmas.) 

Next time:  Phony Order Confirmation  - Phishing Fraud

 

Continue reading...

The 12 Scams of Christmas: #2 - House Parties & ID Theft

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Continuing with Professor Fraud's Twelve Scams of Christmas, here is ...

Scam #2: House Parties and Identity Theft 

 It's that time of the year when folks of good cheer open up their houses for Holiday parties. 

And if you're hosting a Holiday house party, here's something you should remember: 

A study conducted by the Saint Xavier University Center for the Study of Fraud and Corruption showed that a majority of identity thefts could be traced back to a friend or relative of the victim ...

Just the sort of folks you'll be inviting into your home! 

So if you'll be hosting a Holiday house party, be sure to lock up your valuables ... including  potential identity theft items such as:

  • Credit cards;
  • Checkbooks;
  • Social Security cards; and even,
  • Bank statements; and,
  • Old tax returns. 

You want your guests leaving with a warm Holiday glow ...

Not your identity! 

So remember, fraud never sleeps! 
So stay vigilant! 
And have a Happy - and Secure - Holiday Season!

(Videos of "Professor Fraud's 'Twelve Scams of Christmas,'" taped on the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption, will be featured every weekday morning on FOX Chicago's "Good Day Chicago" from now until Christmas.) 

Next time:  Counterfeit goods!

Continue reading...

The 12 Scams of Christmas - #1: Pickpockets & Identity Theft

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

The Holiday Season brings out the best in people. 

Well, most people.

It also brings out any number of scam artists, con men and fraudsters more than willing to exploit this time of good cheer to separate you from your money.

With that in mind, I have prepared "Professor Fraud's 'Twelve Scams of Christmas'" in order to alert you to some of the more common holiday frauds, and provide you with tips so as to avoid becoming a victim.

So with no further ado, here is Scam #1: Pickpockets and Identity Theft

It's the Holidays, and that means Holiday shopping! 

The streets and the malls will be filled with fellow festive shoppers ... along with pickpockets and purse-snatcher. 

And now a days these thieves aren't just out to steal your cash ... they're out to steal you identity, too!

A study by the Saint Xavier University Center for the Study of Fraud and Corruption showed that the second greatest source of stolen identities was stolen purses and wallets. 

So this season, while you're shopping:  

  • Be constantly aware of your purse or wallet;
  • If you can, carry your purse or wallet inside your coat or jacket; and,
  • Never, ever, carry your Social Security card in your wallet!

 


As you might have been able to tell from the above video, some good folks from FOX Chicago came out to the beautiful Saint Xavier University campus, home of the Center for the Study of Fraud and Corruption, and videotaped me discussing the "Twelve Scams of Christmas".  The twelve segments they shot will be featured every weekday morning on Good Day Chicago from now until Christmas. 

So remember, fraud never sleeps! 
So stay vigilant! 
And have a Happy - and Secure - Holiday Season!

Next time:  House Parties and Identity Theft!

Continue reading...

Election Fraud: What to look for ... Where to report it ... And other tips

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Tuesday is Election Day, and with it comes a lot of talk in the media about election fraud.  And the reporting runs the gamut from MSNBC's Rachel Maddow and Eugene Robinson calling it "mythology" to Fox News establishing an email address (VoterFraud@FoxNews.com) for fielding reports of election fraud from its viewers.  Why, there's even "an app for that" (although, as noted below, do not try using the app feature for sending in photos or videos from your polling place; you could get arrested).

So first up: is election fraud just myth? 

Come on folks, you live in Chicago!  Of course it's not a myth!  It's part of our history, and I don't mean just the 1960 Presidential election.  The last major push by the Feds against election fraud in Chicago came after the 1982 election, resulting in 63 convictions.  The U.S. Attorney at the time estimated that at least 100,000 fraudulent votes had been cast.

 

Voting Machine Tribune archive photo April 1948.jpg

Tribune archive photo April 1948

But while better oversight and improved technology has greatly reduced the chances of massive voter fraud in the present day, no amount of technology or oversight can prevent all election fraud, especially when you have the heady combination of overzealous campaign workers and close elections.

And that's where you, the voters going to the polls on Tuesday, come in.  Alert, informed citizens can do much to prevent, detect and deter election fraud. 

But first, a short tutorial on some election day matters.

Two Ballots

In the City of Chicago and in a number of other jurisdictions, the sheer number of candidates and issues has required the use of two ballot sheets for this election.  In Chicago, one sheet contains the ballot for contested elections and judicial retention (both front and back), and the other sheet contains the proposed amendment to the Illinois constitution.  As such, if you choose to vote by paper ballot, you should receive two different sheets of paper for casting your vote.  Further, because each voter will be receiving two ballots, the ballot counting device in the polling place should indicate double the ballots read than voters voting; a situation in earlier elections might indicate ballot box stuffing.

Two Senate Elections

One of the first things you may notice when voting is that there are two different U.S. Senate races listed, with the same candidates listed in both races.  This is not a glitch!  The first race is for the new six-year term for U.S. Senator from Illinois.  The second race, pursuant to a Federal Court order, is a special election to complete the unexpired term of Barack Obama, which is currently being held by Roland Burris.  According to the Federal Court, Mr. Burris should have held office only until a special election was held on a day which coincided with the next statewide election, which should have been on last February's statewide primary election day.  However, since the special election to complete the Senate term was not held at that time, it is being held now.  So vote in both U.S. Senate races!  This may be your only chance to vote twice for the same candidate for the same office at the same time without fear of indictment!

Time Off to Vote

Illinois law requires employers to give their employees time off from work, without penalty, in order to vote.  However, this requirement, like all things in life, has some strings attached:

  • The employee must submit a request for such leave prior to the Election Day (i.e., Monday);
  • The time off cannot be greater than 2 hours;
  • The employer, not the employee, gets to choose the time that the employee may be absent; and, the kicker,
  • The employee's normal working hours must begin before 8:00 AM and end after 5:00 PM, in order to be eligible for this statutory time off.

Campaign Free Zone

Illinois law prohibits electioneering or soliciting of votes within polling places or within 100 feet of polling places.  From where the 100 foot mark is measured is complicated depending on where the polling place is located, but it is made easier by the fact that the Judges of Election are mandated to place a blue traffic come at the spot where the "Campaign Free Zone" begins.  Electioneering includes soliciting for votes, seeking signatures on petitions, engaging in political discussion, and even includes the wearing of candidate names and political slogans on buttons, hats, t-shirts, etc.  (So be careful what you wear to the polls on Tuesday; you may lawfully be asked to leave and change your clothes!)   Credentialed members of the news media and credentialed exit pollsters are allowed to operate with the Campaign Free Zone.

Poll Watchers

Each political party, each candidate, and certain registered civic organizations are allowed up to 2 poll watchers within each polling places on Election Day.  Such poll watchers are to observe the conduct of the election.  Poll watchers are not allowed to handle any election materials, take photographs or videos, or interfere with the orderly conduct of the election.  A poll watcher may challenge, for cause, the qualifications of any person seeking to vote, and may call to the attention of the Judges of Election any incorrect procedure or apparent violations of the Election Code.  (Note: individual voters at the polling place at the time that a person presents themselves to vote may also challenge that person's identity or qualification to vote; such a challenge must state a specific reason (e.g., "John Smith is my neighbor, and you're not him."); and such challenge must be directed at the Judges of Election, and not to the person being challenged.)

Cameras in the Polling Place

The use of cameras in polling places is strictly prohibited in Illinois.  The only exception is for properly credentialed media, with the permission of the Judges of Election and the voters in the polling place.  This prohibition includes both still photos and videos, and includes, of course, the use of cell phone cameras.  Illinois law specifically does not allow you to photograph your ballot.  (This law was enacted to prohibit an old practice of requiring patronage workers to photograph their ballots in order to show their ward bosses that they voted "right" in order to keep their jobs.)  If you are suspected of using a camera within a polling place, you may be asked by a Judge of Election to leave; if you refuse to leave, you are subject to arrest.

Where to Report Irregularities, Ask Questions

If you observe any fraud, voter intimidation, campaign free zone violations, or any other irregularities at your polling place on Election Day, the first person to turn to is the Judges of Election at your polling place.  If, however, you do not wish to speak with the Judges of Election, or you have and are not satisfied with their response, there are a number of hotlines that you can call on Election Day to report and get action on your concerns. 

For example, the Chicago Election Board will have more than 300 investigators assigned to Election Day duty. This includes roving investigators who make unannounced inspections of polling places in addition to responding to calls placed to Election Central.  The Election Central hotline is staffed by Board personnel and attorneys versed in election law.  Election Central hotlines will be operational on Election Day only.

Additionally, the telephone numbers for the Chicago Election Board's Election Central, and the Cook County Clerk's office are good for general election questions within their respective jurisdictions.

So here are those telephone numbers:

  • For polling places within the City of Chicago, call the Chicago Board of Election Commissioners' "Election Central":  312-269-7870
  • For suburban Cook County polling places, call the Cook County Clerk's hotline:  312-603-0236
  • For the Cook County State's Attorney:  312-603-7960
  • For the Illinois Attorney General:  886-536-3496
  • For the Illinois State Board of Elections:  312-263-7367
  • For the United States Attorney for the Northern District of Illinois:  312-469-6157
  • Additionally, complaints about ballot access problems or discrimination can be made to the U.S. Department of Justice Civil Rights Division Voting Section in Washington at 1-800-253-3931.


Good luck!  Happy Voting!


Professor Fraud is William Kresse, Associate Professor at Saint Xavier University and Director of its Center for the Study of Fraud and Corruption.  And in the spirit of full disclosure, Professor Kresse will be one of the "attorneys versed in election law" working at the Chicago Board of Election Commissioners' Election Central on Election Day.

Miscellany: Belly Of A Snake Nominee; The Professor Gets Listed

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Greetings Professor Fraud Fans!

Today, while my primary computer continues to recover from a major meltdown, I bring you some items of note that recently crossed my desk.

 

Another Belly Of A Snake nominee:  Carol Lynn Schnuphase

 

As loyal readers may recall, some time back I proposed an award for the lowest of the low-down-dirty fraudsters out there.  The ones who have demonstrated by their actions that conscience, ethics and morality is just not in stock in their personal inventory.  At the time, I called the award the "Belly Of The Snake" award.  But as a number of folks have pointed out to me, a better title would be the "Belly Of A Snake" award, thus giving it the apropos acronym "BOAS". 

 

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The Belly Of A Snake Award. Yup, that's low. (Photo for the Tribune by Dave Shields)

Accordingly, I nominate Carol Lynn Schnuphase for a BOAS Award.

As reported in the media, beginning last December the Michigan mother allegedly began telling people that her healthy 12 year-old son Christopher was suffering from leukemia.  In order to support her story regarding her son's failing health, Schnuphase shave her son's head and eyebrows.  Additionally, Schnuphase reportedly seasoned her son's food with opiates in order for him to appear lethargic.

During the Spring of this year, Schnuphase asked local Michigan businesses for financial assistance.  Her church also held fundraisers for her son.  It is estimated that she scammed at least $7500 from well-intentioned victims.

The son is now in foster care, going through opiate withdrawal. 

Carol Lynn Schnuphase is in jail in Michigan awaiting someone to post a $100,000 cash bond. 

Attending the bond hearing were members of the family of the biological father of Christopher.  The boy's father, and Schnuphase's third husband, Daryl Carmack, died in 2009.  Carmack's family is raising questions about the demise of Daryl, believing that the death was suspicious.

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"Professor Fraud" Finds Himself In Good Company

 

Last week the New York-based "boutique investigative firm" Diligentia Group posted on its website its 15 favorite news and blog sources covering fraud and investigation news and trends.

Among the websites listed are the usual suspects:  the New York Times, the SEC, the Association of Certified Fraud Examiner's Fraud Magazine.

There are also some excellent blogs that I often read:  White Collar Crime Prof Blog, Sam Antar's White Collar Fraud Blog, and PI Magazine's PI Buzz.

But lurking among all of these heavyweights was little ol' Professor Fraud. 

Yep, the blog you are looking at right now.

So, thank you, Diligentia for including the Professor in such renowned company!  The Professor will do his best to not get kicked out of the neighborhood!

 

Tired of all of the fraud and corruption? You have 5 days to do something about it! Register to vote!

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Are you sick and tired of all of the fraud and corruption in Illinois government?

Do you want to do something about it?

Are you qualified to vote?

Are you registered?

 

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Tribune Archive Photo, April 1948

If you are qualified but not registered, you have until next Tuesday, October 5, to register in order to be eligible to cast a ballot in the November 2 general election.

In order to register, you must:

  • be a U.S. citizen;
  • be at least 18 years old as of election day;
  • live in your precinct at least 30 days before election day;
  • not be in prison/jail serving time for a conviction; and,
  • not claim the right to vote elsewhere.

You can register to vote in person or by mail, but you can only validly register with the election authority appropriate to where you live.

And remember, if you've registered in the past but have moved since the last election, you may need to register again! 

For more information, go to the website for the election authority for where you live:

So stop complaining, and go register!

See you at the polls on Election Day!  (I'll be the guy in the fedora!)

Debit Card Fraud Avoidance Tips

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

The recent rash debit card fraud reported in Buffalo Grove and Wheeling has piqued the interest of many into this type of fraud ... and how to avoid it.  On Thursday, I was interviewed by Stacy Baca on ABC 7 Chicago News This Morning.

However, the time constraints of television prevented me from addressing this matter fully.  Accordingly, below are some more tips on how to avoid debit card fraud, and what to do if you are victimized. 

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Debit card fraud - it's like handing the crooks your cash! (Photo by Flickr user Joe Marinaro)

Remember, there is really no way to completely avoid debit card fraud. But you can do things to make yourself a "hard target", causing fraudsters to look elsewhere for a victim. Like the two guys being chased by a bear through the woods; it's not about outrunning the bear ... it's about outrunning the other guy!

 

Debit Card Fraud Tips

 

 

1.       Try to use Cash or Credit Card, NOT Debit Card for retail transactions

1.1.    Debit card 

1.1.1.       Amount of unauthorized withdrawals reduce your checking account balance instantly;

1.1.2.       It may take time before disputed amounts are credited back;

1.1.3.       Checks may bounce in the interim

1.2.    Credit card

1.2.1.       Credit card users have enhanced legal protections

1.2.2.       Customers do not have to pay while unauthorized charge is disputed;

1.2.3.       Credit card computers have sophisticated fraud detection algorithms which actively seek out anomalies

1.3.    Cash - no access to either your credit account or checking account

2.       Protect Account Information on Debit Card Magnetic Stripe

2.1.    At ATMs

2.1.1.       Beware of phony card readers either placed over card slot or instead of usual card reader

2.1.2.       Be aware of possible phony "stand-alone" ATMs that do not dispense cash, but just capture account data

2.2.    At retail locations

2.2.1.       Try not to give up possession of your debit card

2.2.2.       Suspect any situation where you must hand over card

2.2.3.       If handed over, do not lose sight of card - be wary of the possibility of a hidden bogus card reader in the possession of the clerk

3.       Protect PIN

3.1.    Basics

3.1.1.       Do not use default or simple PIN (1234, 0000, etc.), use a unique PIN

3.1.2.       Do not write PIN on card, on Post-it on card, or on a note in purse or wallet (SXU study: 10.5% of identity theft due to picket pocket / purse snatching)

3.1.3.       Do not tell extraneous friends or relatives your PIN (SXU study: 60.5% of identity theft by friends or relatives)

3.2.    At both ATMs and retail locations

3.2.1.       Look for cameras, both security cameras and hard to see pinhole cameras

3.2.2.       Cover your hand that is entering the PIN with your other hand

3.2.3.       Beware of "shoulder surfers" who watch you enter your pin, then signals a confederate who later steals your purse or picks your pocket to get your card

3.3.    At retail locations

3.3.1.       Look for mirrors or reflective objects that a clerk can use to see your PIN

3.3.2.       Do not "mouth" the numbers while entering your PIN (it is amazing how many people do this!)

4.       If you suspect your debit card has been hacked

4.1.    Report it to your bank immediately

4.1.1.       In advance, photocopy both sides of your debit card (the 1-800 phone numbers are on the back)

4.1.2.       Keep the photocopies secured (in a home safe, etc.)

4.2.    Report it to the police

4.2.1.       A police report may be necessary for insurance

4.2.2.       The reports may indicate a pattern of debit card fraud to police, which can aid in prevention and apprehension

4.2.3.       Police report data is also useful to researchers (like Professor Fraud!)

 

Tired of all of the fraud and corruption? Well, what are you doing tonight? Become a BGA Citizen Watchdog!

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Since 1923 the Better Government Association (BGA), has been Chicago's foremost independent, nonpartisan watchdog group - committed to combating waste, fraud, inefficiency and corruption in state, county and local government.  


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In order to advance its mission of cleaning up government, the BGA is building an army of dedicated "Citizen Watchdogs" who will keep an eye on government and keep the public informed about issues in their communities.  According to the BGA's Mary Frances O'Connor, the idea behind the Citizen Watchdogs is simple, "If we keep a watchful eye on government and its officials, they will do a better job serving the people."  

 
For those wishing to become a Citizen Watchdog, the BGA is offering a series of free training sessions.  At these sessions citizens will learn tools for examining government and demanding change.  Veteran investigative journalists and legal professionals will lead sessions on such topics as basic reporting skills, understanding government, and the ins and outs of the Open Meetings Act and the Freedom of Information Act.  Attendees will hear from other "regular citizens" who are making a difference in their particular communities.  Additionally, representatives from "Raise Your Hand for Illinois Public Education", a coalition of parents and schools, will discuss their work "to influence state and local officials to provide appropriate, equitable and sustained funding for public education".


The first training session is tonight, Wednesday September 22 from 7:00 - 9:00 pm.  A second session is scheduled for next Wednesday September 29, also from 7:00 - 9:00 pm.  Both sessions will be held on the campus of the Illinois Institute of Technology*, specifically at the Engineering 1 Building, Engineering Auditorium, 10 West 32nd Street in Chicago. 

 
Space is limited, so if you are interested in making a real impact in reforming state, county and local government by becoming a BGA Citizen Watchdog, please RSVP by contacting Mary Frances O'Connor at either mfoconnor@bettergov.org or 312-821-9026.

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BGA Executive Director Andy Shaw

 

As former ABC-7 investigative reporter and BGA Executive Director Andy Shaw, says, "We're here to fight for better government - an honest, transparent and accountable government.  But we can't do it alone.  We're not going to change the system unless we all do this together.  So become a BGA Citizen Watchdog help us create the government we deserve."

 
(* - Please note:  IIT is not affiliated with the BGA, and it is neither a sponsor nor co-sponsor of this event.)

Court's Message to Fraudsters: Do the Crime, Do the Time

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

There's one address that Chicago-area financial fraudsters don't like: 219 South Dearborn.  That's the address of Chicago's Everett McKinley Dirksen Federal Building and Courthouse.

 

And if there seems to be a particular spot in that building that fraudsters want to avoid, it's the 12th floor courtroom of United States District Court Judge John Darrah.  In the past fortnight Judge Darrah has imposed substantial prison time on two scam artists. In both cases, the Judge rejected the sentences suggested to him and ordered more severe sanctions.

 

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The Dirksen Federal Building. One place fraudsters want to avoid - especially the 12th floor courtroom of the Hon. John Darrah. (Photo by Flickr user Matt Watts.)

 

Case in point: Matthew Scott.   Scott was president and sole owner of Gelsco, Inc., a Northlake-based printer repair company. Federal officials allege that from 2000 to 2009, Scott defrauded approximately 75 investors for a loss of $4.9 million.  Scott eventually pled guilty to one count of mail fraud as part of a plea agreement that anticipated a prison sentence of between 5 ¼ to 6 ½ years.

 

But that was not the sentenced issued by Judge Darrah. 

Continue reading...

NW Suburban ATM Thefts Highlight Debit Card Risks

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Police in the Northwest suburbs of Buffalo Grove and Wheeling are reporting that scores of their residents have had cash stolen from their bank accounts.  Despite the victims being in the Chicago area, the stolen cash was withdrawn, in multiples of $100, from ATMs located in California.  Early media reports speculated that "skimmers" placed by fraudsters on local ATMs may have been used to steal account numbers and PINs.  But later media reports indicate that instead of looking at local ATMs, authorities are centering their investigation on a chain of retail stores in the Northwest suburbs.  It would seem that law enforcement are focusing on a scenario where the victims used their debit cards to make purchases at these retail stores.  However, simultaneous with their purchases, the victims' debit card account information and PINs were stolen.  The stolen digits would then be transmitted to California where dummy debit cards were imprinted and used with the PINs to withdraw cash from ATMs.

 

 

 

While the use of skimmers on ATMs is a popular scam to abscond with account numbers, usually accompanied with a pinhole camera to steal PINs, the latest trend seems to be for fraudsters to steal the necessary information at retail locations.  This trend points up the risks to consumers inherent with debit card use.

 

Banks prefer that consumers use debit cards instead of credit cards for retail transactions.  With debit cards, banks are able to access the cash from a customer's checking account instantly; with credit cards, banks have to wait for payment, an event that may or may not ever occur.  As a result, banks have launched any number of promotions to encourage consumer use of debt cards for retail transactions, including contests, discounts, and cutesy commercials.  But what the banks often don't tell consumers are the significantly greater fraud risks inherent with debit card use.  For example, the Truth in Lending Act limits a consumer's loss to $50 if a credit card is lost, stolen or used for without authorization.  Such statutory protections do not apply to debit cards. 

 

The lesson to take away from all of this is that consumers should think twice about using a debit card instead of a credit card for retail transactions.  Further, if a debit card is used, be vigilant about how the card is handled.  Consumers should avoid releasing custody of the card, and should attempt to enter PIN digits surreptitiously.  While consumers are learning to be cautious around ATMs, they must learn to be even more cautious in retail settings.  ATMs usually have security cameras, and consumers generally do not relinquish control of their debit cards at ATMs.  These are often not in place at retailers.

 

Once again, constant vigilance and measured skepticism are the consumers' strongest armor against fraudsters. 

Virus Warning: Delete emails with "Here you have" in the subject line

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

As of late Thursday, stories of viral emails with the subject line "Here you Have" or "Just for you" clogging inboxes and crippling email systems worldwide began to circulate.  According to PC Magazine, the viral emails reportedly contain a link to an executable file that, inter alia, e-mails the contents of your address book; spreads through mapped drives, remote machines, and removable media; attempts to download files; and may even delete security software, including virus protection.

McAfee Labs has posted a warning about this virus.

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Don't open that email! (Chicago Tribune photo by Michael Tercha)

 

What should you do? 

  • Avoid emails with the subject lines "Here you have" or "Just for you", even if supposedly sent by a friend or colleague.
  • Don't click on any suspicious links in an email.
  • Update the virus definitions for your anti-virus software.  The major providers have updated their virus definitions files to address the "Here you have" virus.

Good luck!

Feds indict aircraft leasing firm, bosses in $50 M fraud scheme

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Maybe it's unique to Chicago, but it has been my experience that when you ask Chicagoans about bribery and fraud, they think only of political or governmental bribery and/or fraud..

However, commercial fraud and bribery is big, booming and illegal.  It is a huge drag on the American economy, and is one of the targeted offenses of the Financial Fraud Enforcement Task Force - a new federal task force which brings together a number of federal, state and local law enforcement agencies, regulatory authorities, and inspectors general to combat a range of financial crimes.

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Bribery. It's not just for government official anymore. (Photo by Flickr user Joe Marinaro.)

On Wednesday, US Attorney Patrick Fitzgerald and his merry band of fraud fighters announced the return of a 21-count federal indictment against a Chicago area aircraft leasing firm, its president and six other defendants alleging that they engaged in a fraud scheme that raised more than $50 million.

Continue reading...

FRAUD ALERT: Robo-Calls Steal IL Bank Account/PIN Information

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Illinois bank customers are at risk of handing over their account access information to a bogus automated telephone call that purports to be a fraud alert.

Downstate newspapers are reporting on a warning issued by the FBI Springfield field office about a scheme being perpetrated on bank customers in Southern and Central Illinois.

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Telephones and debit cards: a combination that's potentially hazardous to your financial health. (Photo by Flickr user Asim Bijarani.)

According to the FBI, victims receive a recorded, automated telephone call supposedly from their bank.  The recording falsely alerts the victim that their account has been hacked.  The recording then advises the victim that they should immediately "reset" their account, which can be done after pressing "1".  The victim is then prompted to use the telephone keypad to enter account information, including their debit card number and the current Personal Information Number (PIN).

If a victim provides the requested information, the fraudsters perpetrating this scam have all they need to drain a victim's bank account, either through fraudulent transfers or by creating dummy debit cards that can be used to withdraw cash at ATM's.

As a matter of policy, banks do not use automated calls to gain information from customers. Anyone receiving such a call should not "press 1", but hang up and immediately notify their bank.

For fraudsters with no limit to how low they will go: the Belly of the Snake Award

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

As someone who follows "all things fraud", I am often amazed at how low some fraudsters will go to separate innocent victims from their money.  Some recent news stories have convinced me that there ought to be a "Belly of the Snake Award" for the most despicable scams and con artists out there.  We could call it the BOTSA for short.

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The inspiration for the BOTSA. (Photo for the Tribune by Dave Shields.)

As such, submitted for your consideration, I nominate the following recent frauds and fraudsters for a BOTSA:

1)  The Elgin "Grandma / Bail Money" scam:  According to the report in the Chicago Tribune, an elderly woman in Elgin received a telephone call, supposedly from a police officer who was calling on behalf of her grandson.  The grandmother was told that her grandson had been arrested and was in need of money for bail and drug tests.  Ultimately the woman was scammed out of $5500.  While the "Grandparent scam" is not new, with numerous variations on the main theme, the voice of the purported grandson plaintively calling out "Grandma" from the background earned these fraudsters a BOTSA nomination. 

2)  Grifting the Grieving:  NBC Chicago reported this week that fraudsters are targeting families who have lost loved ones.  The apparently U.K.-based scammers send emails to relatives of the deceased informing the family members that a cache of cash belonging to the departed is located off-shore.  Of course, to begin the process of accessing these generous funds, a $2700 fee needs to be wired to England.  While grieving families have long been seen as succulent pigeons by fraudsters, the "high-tech" twists of perpetrating this old con via emails, along with the probable use of on-line seach engines and funeral home guest books earn these fraudsters a BOTSA nomination.

3)  Even More Disgusting Than Jersey Shore:  From the state that gave us Snooki and "The Situation" comes Steven Nelson.  Ok, while Nelson is from the Bronx, he was indicted in federal court in Newark with charges relating to a tax fraud scam he was allegedly running.  According to prosecutors, Nelson filed phony income tax returns from which he received over $200,000 in bogus refunds.  Prosecutors also allege that on these returns Nelson included the names and Social Security numbers of actual children who were listed as dependents.  But where would Nelson get such identifying information?  According to authorities, Nelson used the names and Social Security numbers of pediatric cancer patients whose identities were stolen from their medical files.  Since Nelson is innocent until proven guilty, he will not be nominated for a BOTSA at this time.  But if the allegations are proven, then Steven Nelson, for stealing the identities of children with cancer, will have earned a BOTSA nomination.

It is incredible just how low fraudsters will go.  If you know of a fraud or fraudster deserving of a BOTSA nomination, feel free to comment or contact me at ProfessorFraud@gmail.com.

SCAM ALERT: Phony iPad Tester Scam Hits Facebook

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

You're checking your Facebook page, seeing what your friends have posted, when you notice this piece of good news from one of your most trusted buddies:

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Avoid this Facebook scam!

 

Wow your friend got a free iPad!  Cool!  And being no fool, you want in on it, too! 

But just as you're about to click on the link, you hear a small voice inside your head: "I wonder if this is a fraud."

Listen to that voice. 

According to the Internet security site Sophos, this is a scam.  Your friend's Facebook account was hacked, and a virus posted this fraudulent notice on their wall.

So be a good actual friend to your virtual friend.  Contact your Facebook friend and advise him/her to delete the bogus entry and change their Facebook account password.

And learn to listen to those small anti-fraud voices in your head.

Continue reading...

Fraud at nonprofits rampant; Archdiocesan website can help

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Recently the Chicago Tribune and other media outlets reported on the case of Theresa Carlquist, a suburban woman charged with embezzling over $100,000 from a youth football league.  While such headlines may appear infrequently, the incidents of fraud being perpetrated by insiders against nonprofits is not rare at all.  The troubling fact is that nonprofit agencies are easy victims to fraud committed by persons working within such organizations.

 

By contrast, large corporations have the manpower and resources to put an appropriate level of internal control in place to help detect and/or prevent occupational frauds such as skimming and embezzlement.  And if that wasn't enough, the federal Sarbanes-Oxley Act mandates that companies whose securities are publicly traded certify that they have adequate internal controls up and working.

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The Archdiocese of Chicago website can help nonprofits avoid fraud. (Tribune photo by Alex Garcia.)

 

Alas, many nonprofit organizations, including churches, charities - and even youth sports leagues - operate much differently.  With skeleton, sometimes volunteer, staffs, and few excess resources, these nonprofits often appoint just one person to be in charge of all financial matters.  To make matters worse, at many of these organizations the bulk of transactions are in cash.  Added to this fraud "perfect storm" is the "we're all in this together" delusion under which many nonprofits operate.  This attitude can lead to the naïve belief that no one at the organization would steal from it, and that any move to implement internal control indicates a lack of trust.

 

Continue reading...

Should our local and state governments be subjected to forensic audits?

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

 

In his Chicago Tribune column today, John Kass reports that Democratic Chicago Alderman - and possible mayoral candidate - Scott Waguespack is calling for a "forensic audit" of the financial records of the City of Chicago.

 

Alderman Waguespack joins a growing chorus of folks throughout the state calling for forensic audits of our state and local governments.  The most notable example is Republican grass roots activist Adam Andrzejewski, who made the demand of a forensic audit of the State of Illinois' books the centerpiece of his gubernatorial campaign. 

 

But before we go any further, a bit of clarification in terminology is needed. 

 

I realize that with television programs like the CSI franchise, combined with the demands of editors and speechwriters for brevity, the term "forensic audit" is a nice, popular, short hand expression for the type of professional engagements being demanded.  However, what is being called a "forensic audit" is not really a forensic audit, at least not to many of us who teach this stuff.   

 

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Photo by Flickr user GenBug

Continue reading...

Feds charge far north suburban man in $3.7 million investment fraud scheme

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

With all of the Blago verdict hub-bub, this story almost got past Professor Fraud.

But on Tuesday, federal authorities charged Joseph A. Dawson of Fox Lake with orchestrating a Ponzi-style scheme that defrauded more than two dozens victims of about $2.8 million. 

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Photo by Flickr user swanksalot.

In the criminal information, the feds allege that the 48-year-old far north suburban commodity futures and securities trader with misappropriating over $1 million from an investment fund that he managed.  The government's information allege that Dawson used these absconded funds for personal use, such as for his residence, the construction of a swimming pool, landscaping and three automobiles.

 

Continue reading...

Give 'em the old Blago-Dazzle: Life imitates art at Federal court

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

Give 'em the old razzle dazzle.
Razzle dazzle them.
.... How can they hear the truth above the roar?

 

Well, U.S. v. Blagojevich ended with one conviction. 

Coming soon: the sequel.

If you ask me, it's a pretty good analogy. 

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Photo by Flickr user OnMyWayTo.

For it was art imitating life, imitating art at the Everett McKinley Dirksen United States Courthouse.  The Chicago trial of the year seemed to become more like Chicago: The Musical with each passing day.

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ALERT: Beware the Facebook "Dislike" button scam

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Professor Fraud

Associate Professor at the Saint Xavier University Graham School of Management; Director, Center for the Study of Fraud and Corruption. CPA, Attorney, Certified Fraud Examiner.

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Chicago Tribune photo by Michael Tercha.

Guess what?!?!

A friend of yours on Facebook just sent you a message telling you about the new Facebook "Dislike" button application that you just gotta get so you can passive-aggresively trash others!  What a great development!  Such fun!

But wait!

According to Internet security firm Sophos, the "Dislike" button is a scam that is spreading virally.

Turns out your friend didn't send you that message after all; the "Dislike" button virus did.

And if you, like your duped friend, fill out the survey in order to get the "Dislike" button, you will be opening up your profile for the virus to access.  And suddenly your friends will be receiving spam all because of you. 

The good news: at least at this point, the "Dislike" button does not appear to be otherwise dangerous.

But if you want to stay friends with your friends, and keep your profile secure, do not "Like" the "Dislike" button. 

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