How Uber ghost rides are linked to online money laundering

By Ron Teicher

Online service marketplaces are relatively new, and there are few ways for their operators to regularly monitor the entirety of services and transactions. Unfortunately, this creates an open environment for electronic money laundering, known as ‘transaction laundering,’ to occur.

Last November, we all discovered that no one is immune to cyber crime, when The Daily Beast published an article showing that Airbnb had been exposed to online payment system exploitation. The scam is simple: fraudsters use stolen credit cards to launder dirty money through complicit Airbnb hosts they meet in underground, online Russian forums.

Once the Airbnb booking transaction is processed, no one actually stays at the swanky (or not so swanky), advertised accommodation. Instead, the two parties split the payment and create fake end-of-stay reviews to close the transaction loop.

Because Airbnb spans thousands of locations over numerous governing jurisdictions, cyber criminals can easily capitalize on it and hide behind the huge operational scope. The current tools and processes in place to detect illegal or illicit activity are not enough to monitor the sheer volume of transactions that occur.

Uber now faces exploitations similar to Airbnb, but the transaction laundering process becomes a bit more complicated, albeit conceptually parallel: users of a laundering service pay for “ghost rides” — rides that they never took.

How the Uber scam works

Here’s how it works: the client employs a money laundering service to seek out and hire complicit Uber drivers looking to make an extra buck, who then accept ride requests from money laundering clients at pre-established rates.

Laundering large amounts of money is also pretty simple: multiple drivers are involved in the scheme, easily increasing the volume.

Then, after Uber takes its standard cut from the “ghost rides,” the complicit drivers distribute their earnings to the operator of the laundering scheme. The operator takes a cut, and passes along the remaining, clean money to the client.

Transaction laundering through Uber simply wouldn’t work without drivers willing to be part of the scam to earn their piece of the pie.

These “ghost ride” driving positions are viewed as highly valuable — providing additional revenue streams at minimal risk and involving little to no work. In fact, the positions are increasingly being advertised on online forums and have links with step-by-step guides to effectively execute the scam.

Why specifically Airbnb and Uber?

Money laundering through online platforms is highly popular among criminals because there’s no overhead to the operation, and no need to create a false business or entity, or to deal with real or fake goods.

Not to mention, these popular platforms are global-reaching and immense, allowing scammers to seamlessly cross borders with no regulatory eye keeping watch.

With the revolution of online marketplaces, comes additional risk: Transaction laundering has become rampant among many of the marketplaces we regularly visit.  While the scam is a bit different than that which occurred with Airbnb and Uber, the idea is very similar.  An unknown business uses the payment credentials of a legitimate merchant to process credit card payments for products and services, typically of illicit or illegal nature.

The core of ecommerce is the buying and selling of products and services through the internet. The process has become easy, involving just a few clicks and some data entry, and the transaction is nearly instant. Today, setting up an illegal operation for transaction laundering is just as easy as the ecommerce process, seeing that it can be done in a matter of minutes by anybody with a bit of online savvy and the motivation to commit fraud.

The scary reality is that this cyber crime becomes nearly undetectable to the major players who process millions of payments a day. And along the payment processing pipeline, all players — marketplace, credit card companies, and issuing banks — are responsible for the credibility of the transaction, knowingly or unknowingly.

What’s even scarier is that it’s estimated that transaction laundering for online sales of products and services is more than $200 billion a year in the US alone. With the high volume of transactions through online marketplaces and now the online service marketplaces, like Uber and Airbnb, that number will surely increase.

https://thenextweb.com/contributors/2018/03/18/uber-ghost-rides-linked-online-money-laundering/

Eight people charged with online romance money laundering scam

COLUMBUS (WCMH) — Eight people from Central Ohio have been charged in federal court for an online romance scam.

According to the Department of Justice eight men charged on Valentine’s Day have been indicted by a grand jury for conspiring to launder and for laundering the proceeds of online romance scams.

According to the indictment, the eight men created several profiles on online dating sites and then contacted men and women throughout the United States developing a sense of affection, and often, fake romantic relationship with the victims.

Those charged include: Kwabena M. Bonsu, Kwasi A. Oppong, Kwame Ansah, John Y. Amoah, Samuel Antwi, King Faisal Hamidu, Nkosiyoxoxo Msuthu and Cynthia Appiagyei.

After establishing relationships, perpetrators of the romance scams allegedly requested money, typically for investment or need-based reasons, and provided account information and directions for where money should be sent. In part, these accounts were controlled by the defendants. Typical wire amounts ranged from $10,000 to more than $100,000 per wire

The funds were not used for the purposes claimed by the perpetrators of the romance scams. Instead, the defendants conducted transactions designed to conceal, such as withdrawing cash, transferring funds to other accounts and purchasing assets and sending the assets overseas.

“According to the indictment, the defendants laundered the funds from a scheme to seduce victims throughout the United States using dating websites like Match.com and then defrauding them of millions of dollars,” U.S. Attorney Benjamin C. Glassman said

It is alleged that the individuals commonly used some the fraud proceeds to purchase salvaged vehicles sold online. The cars were commonly exported to Ghana.

Fictitious reasons for investment requests included gold, diamond, oil and gas pipeline opportunities in Africa. Websites used involve Match.com, ChristianMingle.com, BabyBoomerPeopleMeet.com, PlentyofFish.com, OurTime.com, EHarmony.com and Facebook. At least 26 victims have been identified thus far.

In one example, a victim believed she was in a serious relationship with a person named “Frank Wilberg” whom she met on Match.com. She believed they planned to marry and paid $3,000 to reserve a wedding site, and had purchased a wedding gown and shoes.

Wilberg” told the victim he owned a consulting firm that tested gold for purity and needed money to buy gold and gold contracts. He said he expected to profit $6 million and would repay her with the profits. The victim wired money to accounts controlled by Amoah, Bonsu, Msuthu, and Appiagyei, and did not receive any money back.

In furtherance of the scheme, the co-conspirators allegedly created several companies, some of which were shell companies, to help attempt to hide the true nature of their proceeds

 

UK Art Dealer Matthew Green Charged In $9 Million Picasso Money Laundering Scheme

US government officials have charged British art dealer Matthew Green with using a pricey Picasso painting to help launder more than $9.2 million (£6.7 million), a representative for the Department of Justice confirmed to artnet News. Green was arrested in the US last week and is currently being detained.

Investigators allege that the proposed Picasso sale was connected to a $50 million stock scam. Green, who is the son of prominent London dealer Richard Green and was a co-director of the Richard Green Gallery and, more recently, Mayfair Fine Art, is one of ten people and corporations named in the 29-page indictment. The indictment, which was unsealed by the US Attorney’s office on February 28, focuses on the stock manipulation scheme and violations of US law requiring citizens and taxpayers to report offshore and international holdings to the IRS.

 The indictments are the result of work by several undercover FBI agents who recorded their conversations with defendants regarding alleged stock manipulation, money laundering, and falsifying the ID’s of the various offshore account holders.

“As alleged in the indictment, the defendants engaged in an elaborate multi-year scheme to defraud the investing public of millions of dollars through deceit and manipulative stock trading, and then worked to launder the fraudulent proceeds through off-shore bank accounts and the art world, including the proposed purchase of a Picasso painting,” US Attorney Richard P. Donoghue said in a statement.

Two of the other defendants, Beaufort Securities investment manager Peter Kyriacou and his uncle Aristos Aristodemou, suggested to an undercover FBI agent the possibility that he launder the proceeds of his illegal stock manipulation with an art transaction, according to the indictment. Kyriacou and Aristodemou then offered to introduce the agent to Green, and Aristodemou explained that the art trade is “the only market that is unregulated” and advised that art was a profitable investment because of “money laundering,” according to court papers.

The indictment alleges that between March 2014 and February 2018, Kyriacou, Aristodemou, and Beaufort were involved in defrauding investors in various publicly traded companies in the US “by concealing the true ownership” of the companies and “manipulating the price and trading volume in the stocks of those companies.”

Kyriacou, Aristodemou, and Green allegedly proposed that the undercover agent purchase, from Green, Pablo Picasso‘s Personnages (1965). Green “provided paperwork for the painting’s purchase. The money laundering scheme was halted prior to the transfer of ownership of the painting,” according to a statement from the Justice Department.

A Picasso painting matching that title and date was last offered publicly at an Impressionist and Modern evening sale at Christie’s London in 2010, according to the artnet Price Database. At the time it carried an estimate of £3 million to £5 million ($4 million to $7 million) and failed to sell.

Past owners of the painting, as listed in the provenance, or history of ownership, include a Paris gallery, a private collection in Switzerland, a private collection in Sweden, a Berlin gallery, and an unknown buyer who acquired it in 2000. It is not clear when Green acquired the painting or if he was the actual owner or was offering to sell it on behalf of a consignor. A source familiar with the work told artnet News that the painting is currently on loan to a museum in Denmark.

According to the indictment, on or about February 5, the agent met with Kyriacou, Aristodemou, and Green in London. During the meeting the undercover agent “once again explained his involvement in stock manipulation deals.” The defendants proposed that, after buying and maintaining ownership of the painting for an unspecified period of time, Green would arrange for the resale of the Picasso and then transfer proceeds back to the undercover agent through a bank in the US.

During the meeting, Green said that, in part, “it was important for him to make more than a five percent profit on the transaction so that he would not be asked why he was ‘in the money laundering business’,” according to the indictment. He further stated that he would address an invoice for the painting to a company that the undercover agent specified.

Money Laundering Via Author Impersonation on Amazon?

By: krebsonsecurity.com

https://krebsonsecurity.com/2018/02/money-laundering-via-author-impersonation-on-amazon/

Patrick Reames had no idea why Amazon.com sent him a 1099 form saying he’d made almost $24,000 selling books via Createspace, the company’s on-demand publishing arm. That is, until he searched the site for his name and discovered someone has been using it to peddle a $555 book that’s full of nothing but gibberish.

Reames is a credited author on Amazon by way of several commodity industry books, although none of them made anywhere near the amount Amazon is reporting to the Internal Revenue Service. Nor does he have a personal account with Createspace.

But that didn’t stop someone from publishing a “novel” under his name. That word is in quotations because the publication appears to be little more than computer-generated text, almost like the gibberish one might find in a spam email.

“Based on what I could see from the ‘sneak peak’ function, the book was nothing more than a computer generated ‘story’ with no structure, chapters or paragraphs — only lines of text with a carriage return after each sentence,” Reames said in an interview with KrebsOnSecurity.

The impersonator priced the book at $555 and it was posted to multiple Amazon sites in different countries. The book — which as been removed from most Amazon country pages as of a few days ago — is titled “Lower Days Ahead,” and was published on Oct 7, 2017.

Reames said he suspects someone has been buying the book using stolen credit and/or debit cards, and pocketing the 60 percent that Amazon gives to authors. At $555 a pop, it would only take approximately 70 sales over three months to rack up the earnings that Amazon said he made.

“This book is very unlikely to ever sell on its own, much less sell enough copies in 12 weeks to generate that level of revenue,” Reames said. “As such, I assume it was used for money laundering, in addition to tax fraud/evasion by using my Social Security number. Amazon refuses to issue a corrected 1099 or provide me with any information I can use to determine where or how they were remitting the royalties.”

Reames said the books he has sold on Amazon under his name were done through his publisher, not directly via a personal account (the royalties for those books accrue to his former employer) so he’d never given Amazon his Social Security number. But the fraudster evidently had, and that was apparently enough to convince Amazon that the imposter was him.

Reames said after learning of the impersonation, he got curious enough to start looking for other examples of author oddities on Amazon’s Createspace platform.

“I have reviewed numerous Createspace titles and its clear to me that there may be hundreds if not thousands of similar fraudulent books on their site,” Reames said. “These books contain no real content, only dozens of pages of gibberish or computer generated text.”

For example, searching Amazon for the name Vyacheslav Grzhibovskiy turns up dozens of Kindle “books” that appear to be similar gibberish works — most of which have the words “quadrillion,” “trillion” or a similar word in their titles. Some retail for just one or two dollars, while others are inexplicably priced between $220 and $320.

“Its not hard to imagine how these books could be used to launder money using stolen credit cards or facilitating transactions for illicit materials or funding of illegal activities,” Reames said. “I can not believe Amazon is unaware of this and is unwilling to intercede to stop it. I also believe they are not properly vetting their new accounts to limit tax fraud via stolen identities.”

Reames said Amazon refuses to send him a corrected 1099, or to discuss anything about the identity thief.

“They say all they can do at this point is send me a letter acknowledging than I’m disputing ever having received the funds, because they said they couldn’t prove I didn’t receive the funds. So I told them, ‘If you’re saying you can’t say whether I did receive the funds, tell me where they went?’ And they said, “Oh, no, we can’t do that.’ So I can’t clear myself and they won’t clear me.”

Amazon said in a statement that the security of customer accounts is one of its highest priorities.

“We have policies and security measures in place to help protect them. Whenever we become aware of actions like the ones you describe, we take steps to stop them. If you’re concerned about your account, please contact Amazon customer service immediately using the help section on our website.”

Beware, however, if you plan to contact Amazon customer support via phone. Performing a simple online search for Amazon customer support phone numbers can turn up some dubious and outright fraudulent results.

Earlier this month, KrebsOnSecurity heard from a fraud investigator for a mid-sized bank who’d recently had several customers who got suckered into scams after searching for the customer support line for Amazon. She said most of these customers were seeking to cancel an Amazon Prime membership after the trial period ended and they were charged a $99 fee.

The fraud investigator said her customers ended up calling fake Amazon support numbers, which were answered by people with a foreign accent who proceeded to request all manner of personal data, including bank account and credit card information. In short order, the customers’ accounts were used to set up new Amazon accounts as well as accounts at Coinbase.com, a service that facilitates the purchase of virtual currencies like Bitcoin.

This Web site does a good job documenting the dozens of phony Amazon customer support numbers that are hoodwinking unsuspecting customers. Amazingly, many of these numbers seem to be heavily promoted using Amazon’s own online customer support discussion forums, in addition to third-party sites like Facebook.com.

Interestingly, clicking on the Customer Help Forum link link from the Amazon Support Options and Contact Us page currently sends visitors to the page pictured below, which displays a “Sorry, We Couldn’t Find That Page” error. Perhaps the company is simply cleaning things up after being notified last week by KrebsOnSecurity about the bogus phone numbers being promoted on the forum.

 

Brazilian man is jailed for three years for stashing $20MILLION laundered through a billion-dollar pyramid scheme in a BOX SPRING

A Brazilian money launderer who stashed nearly $20 million in cash in a box spring has been sentenced to almost three years in a federal prison.

Cleber Rene Rizerio Rocha, 28, was sentenced Thursday in a Boston federal court after pleading guilty in October to money laundering and conspiracy charges.

The money was found in Westborough in January 2017 during an investigation into TelexFree Inc., a defunct internet telecom company claiming to sell voice-over-internet telephone service that prosecutors say was actually a billion-dollar pyramid scheme.

TelexFree made little to no money selling its service while taking in millions of dollars from thousands of people who paid to sign up to be ‘promoters’ and post ads online for it, prosecutors said.

The company, which was founded by U.S. citizen James Merrill and Brazilian national Carlos Wanzeler, collapsed in 2014.

It inflicted more than $3billion in losses on nearly 1.89million people worldwide,

Merrill was arrested in 2014. He was sentenced in March to six years in prison after pleading guilty to conspiracy and fraud charges.

Wanzeler fled to Brazil in 2014, where he cannot be extradited from, leaving behind tens of millions of dollars he laundered from TelexFree accounts, prosecutors said.

Rocha was a courier for a fugitive TelexFree executive who came to retrieve the money to move it out of the U.S., authorities said.

In 2015, Leonardo Casula Francisco, Wanzeler’s nephew, asked someone who became a cooperating witness to help transfer cash generated from the scheme that Wanzeler had hidden in the greater Boston area out of the United States, prosecutors said.

The pair agreed someone would be sent to the United States to deliver the money in increments to the witness, who would send it to accounts in Hong Kong where it would be transferred to Brazil, prosecutors said.

In December, Casula sent Rocha to the United States to deliver money to the witness, an indictment said.

This witness was in fact cooperating with authorities working on the case, Telegram.com notes.

After a January 4 meeting in a parking lot where Rocha gave the cooperating witness $2.2million in a suitcase, federal agents followed Rocha to a Westborough, Massachusetts, apartment complex, prosecutors said.

They said that after Rocha was arrested, he helped agents locate the apartment, where they found roughly $20million hidden under a mattress.

His charges each carried up to 20 years in prison, but prosecutors previously agreed to recommend a 40-month term based on his cooperation in the case.

His sentence ended up being 33 months in prison followed by a year of supervised release.

 

Nigerian men sentenced for laundering money through Austin banks

Three men who admitted to using Austin banks to launder money will spend at least 8 years in prison.  They were each ordered to pay more than a million in restitution.

Nathaniel Itimi, a 46-year-old native of Nigeria and current U.S. citizen residing in Houston, will spend 97 months in federal prison.  U.S. District Judge Sam Sparks ordered Itimi to pay $1,672,805.51 restitution.

Lewis Akpomofune, a 41-year-old citizen of Nigeria residing in Houston, will spend 108 months in prison.  He will pay $1,672,805.51 restitution.

Michael Omoh Okiki, a 37-year-old citizen of Nigeria residing in Houston, will spend 57 months in prison and pay $1,213,354.94 restitution.

Prosecutors said they, along with four others sentenced last year, would call victims pretending to operate a sweepstakes.

They also ran an inheritance scam and a “get out of jail” scam, according to the federal indictment.

Homeland Security Investigators proved the seven opened up several bank accounts in Austin using fake passports.

The money from the scam was then sent to Canada, according to the indictment.

Last year, four others were sentenced in connection with this investigation.  Three of them lived in Austin.

Ayibatonye Bienzigha, a 23-year-old citizen of Nigeria residing in New Jersey, received 37 months in federal prison and was ordered to pay $51,307 restitution.

Eghosa Obaretin, a 30-year-old citizen of Nigeria living in Austin, received 40 months in federal prison and was ordered to pay $677,303.83 restitution and forfeit $222,000.

Roland Imoe, a 37-year-old native of Nigeria and current U.S. citizen residing in Austin, ten months in federal prison and ordered to pay $25,632 restitution.

Augustine Ikolo, a 41-year-old citizen of Nigeria residing in Austin, received 97 months in federal prison and ordered to pay $842,970 restitution.

“Today’s actions will not only bring a sense of justice to the victims in this case, but this significant investigation will also help increase awareness of this type of fraud,” said Shane Folden, Special Agent in Charge, HSI San Antonio in a press release to KVUE. “To potential victims, we encourage you to be vigilant and if you feel like you are being scammed, please contact law enforcement to report the suspected scam before you make a payment. There are criminals who are always seeking to exploit the vulnerable in our communities for their own personal gain.”

“The defendants who perpetrated this scheme systematically defrauded innocent American citizens,” stated Andy Tsui, IRS Criminal Investigation, Acting Special Agent in Charge, San Antonio Field Office in the press release. “Protecting taxpayer money is a matter we take very seriously. IRS-Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by creating elaborate money laundering schemes such as this one.”

Agents with HSI, IRS-CI, and U.S. Postal Inspection Service investigated this case.

A Louisiana man was arrested for allegedly swindling people out of thousands of dollars through a “Nigerian prince” email scam.

Authorities charged Michael Neu, 67, with 269 counts of wire fraud and money laundering after conducting an 18-month investigation, the Slidell Police Department said in a statement.

Police say Neu allegedly operated as the scam’s “middle man,” who wired money from his victims to his accomplices in Nigeria.

The investigation is still pending due to its international reach, but authorities said the money Neu allegedly stole had been wired to a third-party in Nigeria.

Authorities are well-aware of these types of scams.

According to the Federal Trade Commission’s description of the Nigerian email scam, the phishing scam begins with the suspect posing as a Nigerian prince or other high-ranking official seeking money or personal information to access an alleged inheritance.

Although such scams are the butt of jokes on late-night television, people continue to be duped by these types of scams.

“Most people laugh at the thought of falling for such a fraud, but law enforcement officials report annual losses of millions of dollars to these schemes,” the Slidell police said in a statement.

Slidell Police Chief Randy Fandal said that he hopes Neu’s arrest reminds the public not to fall prey to these schemes.

“If it sounds too good to be true, it probably is,” Fandal said in a statement. “Never give out personal information over the phone, through e-mail, cash checks for other individuals, or wire large amounts of money to someone you don’t know. 99.9 percent of the time, it’s a scam.”