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The wife of Michael Gonzalez, the jailed Savings Unlimited executive, is seeking help to get her husband out of jail.
In an e-mail "Need help desperately," the woman, Svietlana Saviouk,
said "We need people to come forward, to witness to the truth, and we need
Her husband has been in San Sebastian prison in pretrail detention for six months. The term is up for renewal.
Ms. Saviouk said she especially wanted Savings Unlimited investors who have filed a complaint to come forward in support of her husband.
Gonzalez was the front office executive for Savings Unlimited and the man with whom most investors conducted their dealings. The plea was forwarded by John Manners, the leader of the United Concerned Citizens & Residents of Costa Rica. He worked briefly at Savings Unlimited.
Manners noted that José Milanes, brother of the fugitive Louis
Milanes, recently had been let of out
|Said Ms. Saviouk:
"Our situation is unbearable, not only because of the terrible financial situation, but also and more discouraging, the separation of the father and husband from our family.
"Michael has been held in prison for the last six months, when actually he always did his best to serve the people, who of then became close friends. He tried above and beyond his duty while he was working to help anyone he could, and for that he is being charged."
Gonzalez remained in San José when Louis Milanes and other key executives fled the weekend of Nov. 20. The investment firm had some $240 million on its books. The money has never been repaid, although the operation has assets including some casinos.
One fugitive, José Poo, remains in jail, having been tracked down by investors in Panamá.
Ms. Saviouk gave this contact information:
Svietlana Saviouk Azofeifa
A change in U.S. law that would tax U.S. citizens working in Costa Rica survived a U.S. Senate vote Thursday. The measure eliminated the so-called 911 exemption that let U.S. citizens shield up to $80,000 of their overseas earned income from U.S. taxes.
The amendment was to the jobs and growth tax cut plan favored by the Bush administration.
The U.S. Senate added its own wording to a similar U.S. House bill that did not elminate the exemption. Then the Senate named seven of its members to work with counterparts in the House to come up with a unified version that would meet approval in both chambers.
The key vote was on an amendment to eliminate the Senate wording that ashcanned the exemption. The amendment passed, 51-49, and the elimination of the exemption remained in the bill.
The entire Senate bill would provide some $350 million in tax cuts, but the foreign income was eyed by tax writers as a way to cut even moretaxes domestically.
|John B. Breaux, a Louisiana Democrat,
offered the amendment favoring expats that did not pass. He is on the committee
that will reconcile House and Senate versions.
The House version provides for an estimated $550 million in tax cuts. The wording on the measure that would tax expat earnings says that even if passed no taxes would be due from money earned this year.
Here is the wording of the Senate amendment to the jobs bill:
SEC. 350. REPEAL OF EARNED INCOME EXCLUSION OF CITIZENS OR RESIDENTS LIVING ABROAD.
(a) REPEAL- Section 911 (relating to citizens or residents living abroad) is amended by adding at the end the following new subsection:
(g) TERMINATION- This section shall not apply to any taxable year beginning after December 31, 2003.'.
(b) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2003.
A lawyer here has given a U.S. breast surgery patient 10 days to dump her Web site that contains graphic photos of her operation.
He also accused the woman of maintaining a Web site that is "defamatory, fraudulent, and unlawfully infringes on my client's trademark and copyright rights."
The lawyer, Gustavo Adolfo de Je Montero Urena, identified his client as Rosenstock-Lieberman Center For Cosmetic Plastic Surgery here in San José. The woman is Carla Strange of Lott, Texas, who said she suffered infections in both breasts after operations here.
Most of her Web site consisted of photos of herself. However, the lawyer also objected to the use of a Rosenstock-Lieberman logo at the foot of the page. Ms. Strange seemed to have removed the logo by Sunday.
The lawyer also told Ms. Strange in a letter delivered via the Internet that "as you knew full well that your registration and use of said name infringes my client's rights." He threatened legal action if the site were not removed and the domain deregistered.
Ms. Strange said she mortgaged her home to come to Costa Rica for an implant operation and later had to spend money on hospitalization. "They don’t stand a chance," she said via the Internet Sunday regarding the lawyer’s threat. ". . . just trying to scare me. It can only be libel if untrue . . . .and none untrue."
The lawyer alleged that "the content of your page contains outright fraudulent representations about the work of the doctors and staff at the Rosenstock-Lieberman Center. These malicious falsehoods tarnish our trademark and leave you liable for compensatory and punitive damages."
The clinic maintains an extensive Web site but it is not in the name used by Ms. Strange. The clinic Web site is http://www.cosmetic-cr.com/
|"It is free domain until bought,"
Ms. Strange said of the purchase of the domain name bearing the name of
the clinic. "I told them that they should have bought that name themselves
if they wanted it."
In a news story last Tuesday, A.M. Costa Rica said that "this is not a story of medical malpractice, because such allegations are complex and best leveled by experts. And bad things happen in medicine even with the best of care."
However, Ms. Strange was so upset by her experience that she created what is know in the Internet world as a "suck’ site, as in "McDonalds sucks" or "Ford Motors Sucks." It is the Internet version of picking up a sign and picketing a place of business, and such an action may be justified or totally unfair.
A lawyer for the clinic contacted A.M. Costa Rica the day following the news story. He objected to the story and the link to Ms. Strange’s page. The newspaper agreed to remove the link because as an Internet operation it is very sensitive to poaching of Internet names. The Tico Times, for example, uses a dot-net suffix because someone else has captured the TicoTimes.com domain.
However, a study of Internet cases shows that the lawyer’s claim that the use of the name infringes on his client’s rights may not be clear cut in all cases. A certain amount of fair use is allowed, particularly when an Internet writer is exercising free expression or in the case of the U.S.-based Ms. Strange her First Amendment rights.
A U.S. federal cybersquatting law allows businesses to sue to regain Web sites registered by others in their name. But the key test is if the site was registered in "bad faith," mostly with the intent of selling it back to the legitimate owner.
But as Internet law expert Monica Kilian said in E Law - Murdoch University Electronic Journal of Law, "While fair use provisions would allow a site to publish a critical editorial about a company, it appears that many suck sites are de-mobilised by the courts, to the delight of the trademark owners."
|Services here today
for disaster official
By the A.M. Costa Rica staff
Paul Bell, regional director of the Office of Federal Disaster Aid, has died in Costa Rica where he had lived for 20 years, according to an announcement by the U.S. Embassy.
Death was due to a heart problem, and he leaves five children, said the embassy. Services will be at 10 a.m. today in the Funeraria del Recuerdo in Barfrio San Bosco, the embassy added.
From here, Mr. Bell supervised disaster assistance in virtually all of Latin American and the Carribean.
Prior to his last employment, Mr. Bell was with the Peace Corps and the U.S. Agency for International Development.
Another city sweep
By the A.M. Costa Rica staff
Police continued a sweep of the downtown Friday afternoon and evening. They arrested 72 persons of the 276 they investigated.
In all, the Ministerio de Gobernación, Policía y Seguirdad Pública said that 32 locations were checked and two were closed down. One was a pool hall where officials said the real business was selling dope. The other is a hotel where officials found some violations of health and safety rules, they said.
Some 20 youngsters between 6 and 15 years were detained. Most were investigated by the Patronato Nacional de la Infancia and given orders to have their parents present themselves this week.
More than 50 police officers participated as did immigration officials and municipal police.
Such sweeps are becoming weekly events in the capital as officials try to clamp down on illegal activities there.
By the A.M. Costa Rica wire services
NEW YORK, N.Y. — Pro and anti-Fidel Castro activists demonstrated across from the Cuban Mission to the United Nations here Saturday. At the same time, a coalition of Cuban-American artists and writers condemned Cuba's latest crackdown on dissidents.
The artists' coalition says the recent wave of repression against independent journalists, human rights activists in Cuba should convince even Fidel Castro's staunchest supporters of the oppressive nature of his government. In March, the Castro government sentenced 75 dissidents to lengthy prison terms and executed three men who allegedly attempted to hijack a ferry to sail to the United States.
The artists' coalition issued a statement asking governments to demand freedom for the imprisoned dissidents and to take steps to end the Castro government. Around the corner from the news briefing, pro-Castro groups rallied in support of the Cuban government.
Dollar scarcity keeps
By the A.M. Costa Rica wire services
CARACAS, Venezuela — Miss Venezuela says she has lost her chance to compete in the Miss Universe contest next month because of the country's tight controls on the foreign exchange market.
The Miss Venezuela Organization issued a statement Friday saying the group cannot obtain the U.S. dollars needed to send Mariangel Ruiz to the contest being held in Panama City June 3.
The group said it is the first time in four decades Venezuela will not send a representative to the Miss Universe contest. Four Venezuelan women have won the title since it was first awarded in 1952.
In February, President Hugo Chavez imposed strict controls on the foreign exchange market in an effort to counter economic damage from a massive two-month work stoppage. The restrictions have made dollars scarce on local markets.
taken to U.S. trial
By the A.M. Costa Rica wire services
BOGOTA, Colombia — The government has extradited to the United States a Colombian man accused of taking part in the kidnapping of Americans.
Colombian officials say Gerardo Herrera was handed over to U.S. federal agents Saturday for a flight to Washington. Herrera allegedly was part of a group that targeted Americans and other foreigners in Colombia and Ecuador for kidnap ransoms between 1997 and 2001.
One captive, Ronald Sander, was abducted in October 2000 in Ecuador along with five other U.S. construction and oil workers. He later was murdered after his employer failed to pay an $80 million ransom.
Herrera is at least the third gang member to be extradited to the United
Former resident admits gigantic prime note scam
Alyn Richard Waage, 56, a fugitive extradited from Costa Rica has pleaded guilty to mail and wire fraud charges as well as conspiracy to commit money laundering.
The U.S. Justice Department said Friday that the plea was accepted May 5 in federal court in California.
Waage, a Canadian, was one of the principals in the Tri-West Investment Club that investigators said was one of the largest Internet investment fraud cases in the country. Waage had a finca in La Garita and houses in Excazú and Rorhmoser.
The Tri-West Investment Club was an Internet-based investment fraud scheme that allegedly netted more than $60 million from 15,000 investors worldwide, investigators said.
Tri-West solicited investments in what the Web site termed a "bank debenture trading program" or "prime bank" note program. The Web site allegedly guaranteed investors a 120 percent annual rate of return with "no risk of losing the investor’s principal investment," as well as substantial referral fees for directing others to the Web site.
The case alleged that these investment instruments were nonexistent. According to the indictment, Tri-West never actually invested any of the investors’ money in any "prime bank note" program, but instead used new investor funds to
|make "dividend" payments to earlier
investors to give the false impression of profitability.
The balance of the funds were used by the two defendants and others to purchase millions of dollars of real properties in Mexico and Costa Rica, as well as a yacht and helicopter, and to funnel money to dozens of shell companies created in Costa Rica to conceal the defendants’ ill-gotten gains, said U.S. officials.
The U.S. government gained control of some millions of dollars worth of real properties in Costa Rica and Mexico, a yacht, a helicopter, over a dozen cars, and at least $15 million in bank accounts in Latvia, Mexico and Costa Rica at the time of the arrest in September 2001.
Waage and James Michael Webb, 40, of California, were returned to the United States in December 2002. Webb, believed to be the designer of the company’s Web site, faces a 24-count indictment alleging fraud and money laundering. He has not entered a plea and remains in custody.
A third defendant, Cary Waage, the principal defendant’s son, had pleaded guilty in 2002 to separate charges relating to Tri-West. He is about 24 years old.
A criminal complaint filed in October 2001 also charges Michelle Higgins, Alyn Waage’s wife; Lynn Waage Johnston, Alyn Waage’s sister; and Evan Theodore Pryor Smith with involvement in the scam. Those three individuals remain fugitives.
WASHINGTON, D.C. - Investigators arrested more than 130 individuals and confiscated more than $17 million in a coordinated initiative focused on reducing internet fraud and abuse.
The initiative, called Operation E-Con, is being coordinated by 43 U. S. Attorney’s Offices nationwide, the Federal Bureau of Investigation, the Federal Trade Commission, the Postal Inspection Service, Secret Service, and the Bureau of Immigration and Customs Enforcement alongside a number of other state and local law enforcement agencies both in the United States and a number of countries around the globe.
Online crimes can include multimillion-dollar swindles, online auction scams, identity theft, business-opportunity frauds, and piracy of software and other copyrighted material.
"Cyber swindles and dot cons present new challenges to law enforcement," said Attorney General John Ashcroft. "The Internet enables criminals to cloak themselves in anonymity, making it imperative that law enforcement act more quickly to stop newly emerging schemes before the perpetrators can disappear in the World Wide Web."
"For law enforcement, protecting the virtual world, one with few tamper-proof locks and an endless landscape in which to dust for digital fingerprints, has emerged as one of our most serious and complex challenges," said FBI Director Robert Mueller. "In recent months, the FBI has reshaped its entire cyber program to strengthen our ability to investigate online crime. Operation E-Con is a sign of our growing capabilities and commitment."
"High-tech scam artists who think they can hijack
|the Internet should think again,"
said Assistant Attorney General Michael Chertoff of the Criminal Division.
"The Department of Justice will track them down and prosecute them the
same way we’ve gone after traditional hucksters."
"FTC statistics bear out the fact that internet fraud poses an ever-increasing threat to consumers," said Timothy J. Muris, Federal Trade Commission chairman. "Just three years ago, 31 percent of fraud complaints filed with the FTC involved the Internet. In 2002, 47 percent of complaints were Internet-related. We anticipate that by the end of this year, Internet-related complaints will represent the majority of fraud complaints. . . "
Chief Postal Inspector Lee Heath said, "You can be certain the Postal Inspection Service will investigate any criminal activity that misuses the United States mail or uses it as a vehicle for victimizing the American Public."
Since its recent inception, Operation E-Con has conducted more than 90 investigations involving 89,000 victims and estimated losses of more the $176 million, officials said. Additionally, Operation E-Con has executed more than 70 search and seizure warrants that has led to the formal charging or conviction of more than 130 individual subjects, they added.
Last week alone, federal agents arrested 50 people and executed 55 search and seizure warrants that have resulted in 12 guilty pleas and allowed U.S. attorneys to charge 48 individuals by indictment, information or criminal complaint, officials said.
The Internet Fraud Complaint Center (IFCC) — a joint project of the FBI and the National White-Collar Crime Center — reported in 2002 that it referred more than 48,000 Internet-related fraud complaints to law enforcement.
The Internet is a jungle of fraud and trickery, according to cases filed by the U.S. Department of Justice.
From crooked users of Internet auctions to plain old theft, the Internet is providing a home for con men and plain old crooks. There are hackers busting into legitimate companies, persons selling decrypting information for paid-for-view television programs and even a phony dating service, according to U.S. officials.
There is even a guy who set up a phony bank Web page so he could steal personal information and use to for his own benefit, they said.
The U.S. Department of Justice gave this summary of current Internet fraud this Friday:
The Internet Fraud Complaint Center — a joint project of the Federal Bureau of Investigation (FBI) and the National White-Collar Crime Center — reported in 2002 that it referred more than 48,000 Internet-related fraud complaints to law enforcement.
Some 263,000 Internet-related fraud complaints went to the Federal Trade Commission’s Consumer Sentinel Database. In 2002, Internet-related fraud complaints made up nearly half the fraud complaints received by the Federal Trade Commission.
Due to the seriousness of Internet-related fraud, the Justice Department has been conducting a nationwide sweep to prosecute these cases
Operation E-Con is a coordinated operation. This initiative involves the collective participation of 43 U. S. Attorneys’ Offices, the FBI, the Federal Trade Commission, the Postal Inspection Service, the Secret Service, and the Bureau of Immigration and Customs Enforcement to root out and take action against some of the leading forms of online economic crime.
Since its inception, Operation E-Con has conducted over 90 investigations involving 89,000 victims and estimated losses of more than $176 million.
To date Operation E-Con has executed over 70 search and seizure warrants that have led to 130 arrests and convictions and over $17 million in seizures and recoveries.
Last week alone, federal agents have arrested 50 persons and executed 55 search and seizure warrants, and U. S. Attorney’s Offices have charged 48 persons by indictment, information, or criminal complaint, and have obtained 12 guilty pleas.
The Cases in Operation E-Con illustrate the different types of online fraud that law enforcement agencies are fighting, both domestically and internationally. Here are some examples:
United States v. Costa, No. 03-0810M (C.D. Cal., criminal complaint filed April 24). This defendant allegedly established various false identities and also used identities, including Social Security numbers, supplied by unknown accomplices to commit credit card fraud and Social Security Program fraud in an amount over $240,000. The defendant also is charged with identity theft for his alleged conduct in collecting Social Security benefits in other people’s names.
United States v. Dean, No. CR 03-1005M (C.D. Cal., criminal complaint filed May 9). Two defendants have been charged relating to an alleged ongoing online credit card fraud scheme with losses in excess of $38,000. One defendant allegedly received Six Flags California customer information from the other defendant, a billing department employee connected with Six Flags California. The defendant who received this information allegedly used it to make online purchases of expensive tickets for concerts and Los Angeles Lakers basketball games which are advertised on the Internet and resold below market value.
United States v. Johnny Ray Gasca, No. CR 03-419 (C.D. Cal., indictment filed May 6). This defendant was indicted on four counts of criminal infringement of a copyright, interstate communication of a threat, possession of a false identification document of the United States, and witness retaliation, for allegedly using a camcorder to covertly film theatrical movies that were being shown at preview screenings, then making them available for sale on the Internet.
United States v. Serebryany, No. CR 03-42-LGB (C.D. Cal., indictment filed Jan. 16; guilty plea Apr. 28). This defendant, a 19-year-old college student, pleaded guilty to charges involving theft of trade secrets for stealing sensitive information belonging to satellite provider DirecTV.
United States v. Tinney, No. 03-141-MMM (C.D. Cal., indictment filed Feb. 13). This defendant is charged with six counts of wire fraud, relating to an alleged scheme to steal nearly $600,000 of computer equipment from businesses in Wenham, Mass., and Santa Barbara, Calif. According to the indictment, the defendant set up a fictitious corporation named Data Systems International, ostensibly located in Las Vegas, Nev., complete with a fully featured Web site. In addition, he allegedly set up a sham escrow company identified as American Escrow Corp., also equipped with an elaborate Web site which he claimed was located in San Francisco, Calif.
The fraudulent escrow company representative allegedly would report to the intended victims that the required funds had been deposited into escrow for payment of the computer equipment the defendant had negotiated to buy from victim companies. These victim companies allegedly would ship computer equipment to Data Systems at an address in Las Vegas with the expectation that once the computer equipment was received by Data Systems, the funds held in escrow for payment would be released.
The defendant, using an alias and false identification, planned to receive the computer equipment at Data Systems' Las Vegas address (nothing more than a mail drop) and planned to sell the equipment on the black market without ever paying the victims for their property, according to the indictment.
Operation Decrypt. In this FBI undercover investigation that targeted the software writers and manufacturers behind equipment that allows the theft of satellite television signals, a total of 17 people have been charged in Los Angeles with allegedly causing millions of dollars of losses to companies that have spent tens of millions of dollars creating some of the world’s most sophisticated conditional access technology. Six of the charged defendants are accused of violating the criminal anti-decryption provisions of the Digital Millennium Copyright Act.
Operation Fast and Furious. In this U.S. Secret Service investigation, a total of 13 individuals are charged with conspiracy and fraud-related charges for their roles in a San Fernando Valley-based credit card skimming ring that stole credit card numbers from restaurant patrons and used the fraudulently obtained numbers to purchase computers and other expensive electronics. To date, at least 12 defendants have pleaded guilty to charges relating to this operation.
United States v. Barth, No. CR 02 0385 CRB (N.D. Cal., pleaded guilty April 23). This defendant pleaded guilty to five counts of mail fraud, relating to a fraud scheme in which he purported to "auction" off iMac computers and Sony Playstations on an online auction Web site, but never sent anything to winning bidders.
United States v. Fontanini, No. 03cr0208-IEG (S.D. Cal., indicted Jan. 23). Nine defendants (three of them fugitives) are charged in an indictment containing one count of conspiracy to traffic in counterfeit goods, five counts of trafficking in counterfeit goods and copyright infringement, eight counts of money laundering, and 24 counts of tax evasion.
This case involves the alleged sale of counterfeit Microsoft software. The lead defendant, John Fontanini, allegedly originally placed advertisements in magazines and newspapers around the country offering Microsoft Corporation computer software for sale at approximately 13 percent to 18 percent off the retail cost. The case alleges that software was then sent cash-on-delivery (COD) to the purchaser, or the buyers would send payment to various post office boxes or mail drops throughout San Diego County.
The buyers would then allegedly receive a compact disk (CD) with the Microsoft logo on it, in a jewel case, usually by Federal Express or by U.S. Mail. According to the charges, Fontanini eventually became a wholesaler providing the counterfeit software in bulk to others for re-sale. During the course of the conspiracy, the defendants allegedly sold software valued at more than $6 million for more than $1.5 million.
United States v. McCoy, No. 03cr1316R (S.D. Cal., indictment filed May 7). On May 7, 2003, two defendants were indicted for one count of conspiracy to commit wire fraud and 41 counts of wire fraud. Robert L. McCoy and his Russian-speaking wife, Anna V. Grountovaia, allegedly operated a fraudulent Russian dating scheme preying on lonely men worldwide. By either contacting male victims through various on-line personal ads, or posting their own on-line personal ads posing as Russian or Ukrainian women desiring a romantic relationship, McCoy and Grountovaia allegedly bilked upwards of 400 victims of at least $600,000 over a period of approximately three years.
United States v. Weare, Crim. No. 03-CR-121-N (D. Colo., indictment filed Mar. 25). The defendant is charged with 15 fraud-related counts pertaining to his alleged operation of an Internet-based Ponzi scheme that took in more than $8 million from 23,000 investors.
The defendant allegedly used a Web site to offer investors an opportunity to become "members" of an offshore investment program run by a company called J&K Global Marketing Corporation. He allegedly promised that if an investor paid a yearly "membership fee" of $375 and waited six months, he or she would receive payments of $375 per month. He also allegedly told investors that he was investing in "high-yield programs," which would return between 200 percent and 1,200 percent per month. As a result, investors allegedly transmitted membership fees to bank accounts in the United States, Canada, Luxembourg, and the West Indies.
United States v. Barrero, Crim. No. 03-30102-01 (S.D. Ill., information filed May 12; guilty plea May 12). The defendant pleaded guilty to a two-count information charging him with mail fraud and wire fraud in connection with a business-opportunity scheme that raised approximately $2 million.
The defendant, who operated in the Miami, Fla., area under the names "Stuffing for Cash" and "Cash for Stuffing," engaged in mass-marketing fraud over the Internet and through direct mail. The defendant persuaded approximately 50,000 victims throughout the United States to pay a registration fee of $30 or $45 for a supposed business opportunity involving stuffing envelopes at home for $2 per envelope. In fact, no such legitimate opportunity existed and the business was a total sham.
United States v. Iakoubtchik, No. L-03-0229 (D. Md., indictment filed May 8). Two defendants are charged with devising and executing a scheme to lure unsuspecting bank customers to "spoofed" bank web sites where they would enter confidential account data that would be transmitted to the defendants, who would use the data to produce and fraudulently use ATM and credit cards.
United States v. Parris, Crim. No. 03-40 (ADM/AJB) (D. Minn., indictment filed Feb. 4; superseding indictment filed Mar. 4; guilty plea May 9). From Aug. 17, 2000 through December 31, 2001, the defendant engaged in a scheme to obtain over $120,000 in money from approximately 1,000 consumers in the United States, Canada, and Great Britain.
He solicited consumers via email and online auctions to purchase brand-name North Face parkas and jackets and rare or "retired" Beanie Babies. He represented that he was selling authentic items, but upon receiving payment from consumers, he failed to send any product at all, or he sent counterfeit products that he had imported from China. The defendant pleaded guilty to one count of mail fraud and one count of trafficking in counterfeit goods.
United States v. Susel, No. CR 03-179 (ADM/AJB) (D. Minn., indictment filed May 13). Two defendants are charged with 30 counts of mail fraud-related allegations that from Oct. 10, 2001 through Dec. 30, 2002, they aided and abetted each other in devising a scheme to defraud businesses and approximately 1,395 consumers in the United States, Canada, Great Britain, Australia, Germany, and elsewhere of more than $265,000.
Defendants allegedly obtained more than $700,000 in stolen goods from a software manufacturer. They then allegedly solicited consumers to buy popular software or computer games, claiming they were "new" and "retail" and failing to disclose the items were stolen.
United States v. Lawler, Crim. No.03-54M-01 (D.N.H., criminal complaint filed Apr. 29). The defendant is charged relating to his alleged involvement in using two Web sites to sell approximately $1 million worth of counterfeit Rolex, Omega, Movado, Cartier, and Tag Heuer watches.
United States v. Mullaney, Crim. No. 03-15-01-M (D.N.H., information
filed Jan. 15; guilty plea March 24). The defendant pleaded guilty to charges
relating to her and her former husband’s allegedly selling numerous items,
via the eBay auction Web site, that had been stolen during home burglaries
in New Hampshire and elsewhere.
United States v. Short, No. 1:03M66 (W.D.N.C., criminal complaint filed May 13). The defendants, one individual and three companies, are charged with mail and wire fraud, relating to allegedly fraudulent offerings of electronic products (primarily laptop computers) through the use of Internet auction sites such as eBay and through Yahoo! store sites. Federal authorities reportedly received complaints from more than 190 victims in states outside of North Carolina and in foreign countries who did not receive the products offered or did not receive a refund from the defendant's companies.
United States v. Blair, Crim. No. 03-93 (W.D. Pa., indictment filed March 12,). Five defendants are indicted on a charge of conspiracy, relating to their allegedly obtaining identification information of residents of Mount Lebanon from the Mount Lebanon Municipal Tax Office, where they were employed as cleaning service personnel. The defendants then allegedly used that information to apply for credit cards over the Internet, which they then used to make purchases, all without the knowledge or consent of the victims.
United States v. Condon, (indictment filed May 14). The defendant is charged with wire fraud and mail fraud, relating to his allegedly placing items for sale at various Internet auction sites knowing that he did not have those items for sale and had no intention of delivering said items. The defendant allegedly accepted payments for the items that he purportedly had for sale, but failed to deliver those items to the individuals that had won the on-line auctions.
United States v. Honse, Crim. No. 02-262 (W.D. Pa., guilty plea March 21,) and United States v. Cain, Crim. No. 02-260 (W.D. Pa., guilty plea March 28). Two defendants in related cases have pleaded to conspiracy charges relating to a scheme to defraud computer and software wholesaler, Ingram Micro.
The scheme consisted of co-conspirators making fraudulent orders for computer hardware over the Internet using the ordering accounts of legitimate Ingram Micro customers. The merchandise was shipped to various "drop" locations provided by participants in the scheme. The defendants and others would then pick up the hardware and take it to Indiana, Pa., where it was shipped overseas. The defendants were involved in fraudulently obtaining approximately $96,000 worth of computer equipment from Ingram Micro.
United States v. Kruhlou, Crim. No. 02-266 (W.D. Pa., guilty plea Apr. 10). The defendant pleaded guilty in federal court to a charge of conspiracy to commit mail fraud and wire fraud. The defendant, who was originally from Belarus, participated in a mail and wire fraud scheme that had two interconnecting parts. The first part of the scheme was that members of the conspiracy hacked into eBay's computer system and logged onto the system as if they were someone who had previously sold items and received favorable ratings from purchasers of those items. Once a seller received a favorable rating, it was much easier to sell items because there was a proven track record of delivering what was promised.
Members of the scheme then put items up for auction pretending that they were sellers with the proven track records. The successful bidder in the auction was directed to send certified checks or money orders to an address in Pennsylvania, but no items were delivered.
The second part of the scheme involved the unauthorized use of credit card numbers to purchase items online that were then shipped to addresses in Pennsylvania. These items were then repackaged and sent to addresses in California. The addresses in Pennsylvania were set up by two co-conspirators, also originally from Belarus, who used false identifications. These two individuals, who worked under the direction of Kruhlou, would stay in apartments for approximately two weeks at a time and receive products and checks at those locations. They would then move to a different apartment and, again, receive checks and products. They moved to a total of four different apartments during the course of the conspiracy until they were arrested by the Pennsylvania State Police.
United States v. Patterson, Crim. No. 03-86 (W.D. Pa., indictment filed Feb. 26). The defendant is charged with password trafficking and computer damage. According to the indictment presented to the court, the defendant, a former employee of American Eagle Outfitters, was charged with trafficking in passwords and similar information that would have permitted others to gain unauthorized access to the American Eagle Outfitters computer network.
The defendant allegedly posted and maintained at a Yahoo hacker group posting board the username and password combinations of certain legitimate American Eagle Outfitters users, together with detailed instructions on how to hack into the wide area network of American Eagle Outfitters using those passwords.
The defendant was also charged with a series of computer intrusions into the American Eagle Outfitters computer network from Nov. 27, 2002 through Dec. 1, 2002. These intrusions allegedly were attempts to deny computer services to American Eagle Outfitters stores and customers in the United States and Canada during the beginning of the Christmas shopping season. These denial of service attempts were quickly identified by American Eagle personnel and corrective actions were implemented that limited their intended economic impact.
United States v. Thornhill, Crim. No. 02-84 (W.D. Pa., indictment filed April 23). Two defendants were indicted by a federal grand jury in Pittsburgh on charges of conspiracy, bank fraud, and access device fraud. According to the indictment, the defendants fraudulently used the names, Social Security numbers, and other identifying information from two individuals to apply over the Internet to obtain bank loans and credit cards in the other people's names. They also allegedly made fraudulent online purchases.
United States v. Noia, No. 03-205M (W.D. Wash., criminal complaint filed April 22). The defendant is charged with five counts of wire fraud relating to her allegedly posting of video and digital cameras for auction on eBay, accepting payment for goods, and failing to deliver the promised goods. The alleged loss amount is more than $30,000.
United States v. Fibiger, No. 03-Cr-66 (E.D. Wisc., indictment filed April 1). The defendant is charged with wire fraud relating to his alleged solicitation of purchasers over the Internet and failure to deliver any of the merchandise promised. Reported losses in this case total approximately $40,000.
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