New Anti-Fraud Program Launched in Georgia

Aim is to Protect Consumers and Financial Institutions from Fake Check Scams
Today, the Georgia Governor’s Office of Consumer Affairs, Consumer Federation of America (CFA), the Georgia Bankers Association, and Georgia Credit Union Affiliates are announcing the start of a new and innovative program to protect consumers and financial institutions from fake check scams. Under the program, participating banks and credit unions will hand a brochure created by CFA, “Don’t Become a Target,” to every consumer who comes in to deposit checks or money orders of $1,000 or more or to withdraw $1,000 or more. Nearly 60 banks and credit unions in Georgia have signed up to participate. “The key is to prevent consumers from being victimized by educating them about these scams at the very point where they may be at risk,” said Susan Grant, CFA’s Director of Consumer Protection, who is coordinating the program. “We’re pleased to have such a great response from financial institutions in Georgia.”

In fake check scams, the consumer receives a genuine-looking check or money order for something and is asked to wire money somewhere in return. For instance, the check may be described as an “advance” on millions that the consumer has won in a sweepstakes or lottery. The consumer is instructed to send money to pay the taxes and claim the rest of the prize. In another popular scenario, the consumer is recruited to work at home as a “mystery shopper” or processing payments for a company and is instructed to send money somewhere as part of the job. No matter the story, the check or money order is phony, and when it bounces, the victim owes the money back to the financial institution where it was deposited or cashed. The average loss is $3,000 to $4,000. “It’s impossible to detect these counterfeits just by looking at them,” said Joseph B. Doyle, Administrator of the Governor’s Office of Consumer Affairs. “The message that we want to give consumers is that there is no legitimate reason why anyone who wants to give them money would ask them to send money anywhere in return. If that’s the deal, it’s a scam.”

Federal law gives consumers the right to access their funds quickly, usually within a day or two. But it is often difficult or impossible for the consumer’s financial institution to tell if there is a problem with a check or money order until it goes through the system to the person or company that supposedly issued it. That can take several days or weeks. “These crooks take advantage of the trust that the financial system is built on,” said Joe Brannen, president and CEO of the Georgia Bankers Association. “This campaign is a service to help consumers understand they are responsible for the checks and money orders they deposit or cash because they are in the best position to know if the people who gave them to them are trustworthy.”

“Fake check scams are a serious problem for consumers. Credit unions want to do all they can to educate their members. That’s why we’re excited to be a partner in this consumer education program,” said Cindy Connelly, senior vice president of association services for Georgia Credit Union Affiliates “Consumers and credit union personnel need to be able to recognize the warning signs of fraud in order to prevent it.”

CFA is providing the brochure to participating banks and credit unions at no cost (CFA is asking them to cover the shipping expense if they are able to do so). To help the financial institutions prepare for the project, CFA gave them training materials about fake check scams and advice about handing out the brochures. In addition to the hard-copy brochure, which is English on one half and Spanish on the other, there are two electronic versions, one in English and the other in Spanish, on CFA’s Web site at www.consumerfed.org/fakecheckscams. There visitors will also find a new PowerPoint presentation that CFA has created for consumers and other educational materials about fake check scams.

Quantities of the brochure will also be available to government agencies in Georgia such as the Governor’s Office of Consumer Affairs and nonprofit organizations that conduct consumer education in the state. CFA is not offering hard-copies of the brochure directly to consumers.

Georgia is one of several states in which CFA will be conducting this project to fight fake check scams over the next several months. Participating financial institutions in Georgia are listed below. Banks and credit unions in Georgia that have not yet signed up to participate are welcome to do so and should contact Susan Grant at CFA, 202-939-1003.

Atlanta Man Pleads Guilty in Investment Fraud Scheme

ROBERT L. DUNCAN, 49, of Atlanta, Georgia, pleaded guilty this afternoon (September 23) to a criminal information which charges that DUNCAN convinced several local investors to allow him to invest $3.5 million, falsely telling them that their funds were in individual capital accounts and invested through licensed securities brokers.

United States Attorney Sally Quillian Yates said: “This is another case of a financial predator who has defrauded individuals of millions in savings. As part of the president’s Financial Fraud Task Force, it will remain a focus of our mission to root out and address these crimes and to help instill a measure of confidence in our financial system.”

According to United States Attorney Yates, the charges and other information presented in court: The investors transferred their funds to DUNCAN’s investment program, known as “Seaside Partners Fund,” after he falsely represented that their principal would be held for their benefit in individual capital accounts and invested by licensed securities brokers. DUNCAN periodically furnished his investors with fraudulently altered account statements, which falsely showed that their investments were doing well, when in fact, DUNCAN was using their investment principal for his own business and personal expenses. The criminal information charges DUNCAN with wire fraud for causing the investors’ funds to be electronically transferred in interstate commerce to execute his scheme to defraud.

The charges carry a maximum sentence of 20 years in prison and a fine of up to $250,000. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

This case is being investigated by the Atlanta Field Office of the Federal Bureau of Investigation. The Atlanta District Office of the United States Securities and Exchange Commission has conducted a separate civil investigation and referred this case for prosecution.

Assistant United States Attorney David E. McClernan is prosecuting the case.

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Augusta Financial Advisor Pleads Guilty to Stealing More Than $400,000 from Client

ALVIN CHARLES RAMSEY, 44, a financial advisor from Martinez, Georgia pleaded guilty before United States District Court Judge J. Randal Hall to defrauding a client out of more than $400,000.

United States Attorney Edward J. Tarver said, “The United States Attorney's Office will continue to aggressively prosecute those within the financial services industry who abuse the trust placed in them by stealing their clients’ money.”

Evidence presented during the guilty plea hearing revealed that Ramsey obtained a power of attorney over his client’s investments and then, without that client’s knowledge or permission, stole more than $400,000 out of her investments for his personal use.

Ramsey faces a maximum penalty of 20 years' imprisonment, a $250,000 fine, and three years of supervised release. He remains on bond pending his sentencing hearing, which has not yet been scheduled.

U.S. Attorney Tarver applauded the efforts of the FBI, and particularly FBI Special Agent Paul Kubala, in investigating this case.

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Major International Hacker Pleads Guilty For Massive Attack on U.S. Retail and Banking Networks

/PRNewswire/ -- Albert Gonzalez, 28, of Miami, pleaded guilty today (December 29) to conspiring to hack into computer networks supporting major American retail and financial organizations, and to steal data relating to tens of millions of credit and debit cards, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the District of New Jersey Paul J. Fishman, U.S. Attorney for the District of Massachusetts Carmen Milagros Ortiz and Director of the U.S. Secret Service Mark Sullivan.

Gonzalez, aka "segvec," "soupnazi" and "j4guar17," pleaded guilty to two counts of conspiracy to gain unauthorized access to the payment card networks operated by, among others, Heartland Payment Systems, a New Jersey-based card processor; 7-Eleven, a Texas-based nationwide convenience store chain; and Hannaford Brothers Co. Inc., a Maine-based supermarket chain. The plea was entered in federal court in Boston before U.S. District Court Judge Douglas P. Woodlock. The case is one of the largest data breaches ever investigated and prosecuted in the United States.

According to information contained in the plea agreement, Gonzalez leased or otherwise controlled several servers, or "hacking platforms," and gave access to these servers to other hackers, knowing that they would use them to store malicious software, or "malware," and launch attacks against corporate victims. Malware used against several of the corporate victims was also found on a server controlled by Gonzalez. Gonzalez tested malware by running multiple anti-virus programs in an attempt to ascertain if the programs detected the malware. According to information in the plea agreement, it was foreseeable to Gonzalez that his co-conspirators would use malware to steal tens of millions of credit and debit card numbers, affecting more than 250 financial institutions. Gonzalez was indicted in New Jersey in August 2009 for this criminal conduct.

Based on the terms of the plea agreement, Gonzalez will not seek a prison term under 17 years and the government will not seek a prison term of more than 25 years. Gonzalez pleaded guilty in September 2009 in Boston to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft relating to hacks into numerous major U.S. retailers including TJX Companies, BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble and Sports Authority. Gonzalez was indicted for those offenses in August 2008 in the District of Massachusetts. Gonzalez also pleaded guilty in September 2009 in Boston to one count of conspiracy to commit wire fraud relating to hacks into the Dave & Buster's restaurant chain, which were the subject of a May 2008 indictment in the Eastern District of New York.

As part of the plea agreement with the government, the New Jersey case was transferred to the District of Massachusetts for plea and sentencing. According to the terms of the New Jersey plea agreement, the parties agree that Gonzalez' sentence in the New Jersey case should run concurrently with the sentence imposed in the Boston and New York cases. Gonzalez remains in federal custody. Sentencing in the Boston and New York cases is currently scheduled for March 18, 2010, in Boston. Sentencing in the New Jersey case is scheduled for March 19, 2010.

"The Department of Justice will not allow computer hackers to rob consumers of their privacy and erode the public's confidence in the security of the marketplace," said Assistant Attorney General Breuer. "Criminals like Albert Gonzalez who operate in the shadows will be caught, exposed and held to account. Indeed, with timely reporting of data breaches and high-tech investigations, even the most sophisticated hacking rings can be uncovered and dismantled, as our prosecutors and agents demonstrated in this case."

"Commercial hackers like Gonzalez believe they are immune from detection and prosecution as they lurk in the shadows of the Internet," said U.S. Attorney Fishman of the District of New Jersey. "But time and again they are caught, prosecuted and sentenced to lengthy federal prison terms. Other hackers should sit up and take notice."

"The conviction of Mr. Gonzalez, and the unraveling of one of the most complex and large scale identity theft cases in history, should serve as a reminder to hacker organizations, that the Department of Justice will vigorously investigate and prosecute cybercrimes, regardless of their sophistication and global reach. Mr. Gonzalez's conviction is the result of unprecedented coordination across agency and geographical lines, and I want to commend the investigators and prosecutors who have worked tirelessly to bring this case to fruition," said U.S. Attorney Ortiz of the District of Massachusetts.

"Today's plea proves that although cyber criminals can threaten our nation's financial sector, the Secret Service and its many partners around the world will pursue and prosecute them," said U.S. Secret Service Director Sullivan. "Time and again, cooperation and advanced methodologies have allowed us to focus our resources in order to detect and prevent these types of crimes, wherever they originate."

The New Jersey case is being prosecuted by Assistant U.S. Attorneys Erez Liebermann and Seth Kosto of the District of New Jersey, Assistant U.S. Attorneys Stephen Heymann and Donald Cabell of the District of Massachusetts, and Senior Counsel Kimberly Kiefer Peretti of the Criminal Division's Computer Crime and Intellectual Property Section. All of these cases are being investigated by the U.S. Secret Service.

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GeorgiaBankRobbery.com Website Announced to Aid in Apprehending Suspects

Special Agent in Charge (SAC) Gregory Jones, FBI Atlanta, in conjunction with the Georgia Association of Bank Security (GABS), is pleased to announce the following new aid to crime fighting in Georgia:

A new publicly accessed web site, GeorgiaBankRobbery.com, is designed to assist law enforcement in the identification and apprehension of suspects throughout Georgia. This web site features images of persons who may be involved in criminal activity and wanted for questioning. Through this web site, the public is urged to click on the image to send comments or contact law enforcement (a direct link with contact information for Atlanta Crime Stoppers is provided) should they recognize any of these individuals or know their whereabouts.

GeorgiaBankRobbery.com is sponsored by the member banks of the Georgia Association of Bank Security (GABS).

The Georgia Association of Bank Security (GABS) was formed in 1980 by Bank Security Directors from the Major Atlanta Financial Institutions, after discussions with each other found that they each had similar criminal activity that was affecting each others companies. They decided that one of the best ways they could help solve their own crimes was to help each other as a united group. They started sharing information about Bank Robbery Suspects and other financial crimes with not only each other but also the FBI, and Local & State Law Enforcement. They found out that not only was this group successful in solving crimes together, they could also be a unified force in making changes in security training, and driving new development for security equipment.