Internet fraud casebook : the World Wide Web of deceit

407 Pages·2010·3.045 MB·English

by  Joseph T Wells

1.3325
Praise for WELLS
Internet Fraud Casebook:
The World Wide Web of Deceit
“A valuable resource for consumers, businesses, and fraud investigators alike. It is fi lled with
fascinating cases that range from fraud on auction sites, counterfeit goods, identity theft, and
—continued from front cover—
mail-order brides. I especially liked the guidance for fraud investigators.”
I
— James Bierstaker, Department of Accountancy, Villanova School of Business,
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from years of practical experience, provide
Villanova University
readers with invaluable perspectives, many of
which have never before been conveyed publicly. T
Forming a comprehensive picture of the many “The cases included in this book point out how the Internet has turned the world into a cookie jar
types of Internet fraud and how they are E
with no lid. When reading the various cases, you can’t help but come to the chilling understanding THE WORLD WIDE
analyzed across industries and throughout the
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world, Internet Fraud Casebook equips you that the one thing criminals have always needed — access — is now available to them in real time.”
WEB OF DECEIT
with authoritative, proven investigative and
— Allen Brown, CFE, CPA, Director of Internal Audit, Louisiana Community and
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preventive guidance.
T
Technical College System
Web scams targeting the unemployed. Computer
H
E fraud. Online auction fraud. Market manipulation
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“In his typically easy-to-read and hard-to-put-down style, Joseph Wells provides convincing schemes. While the Internet offers a global
WT marketplace for consumers and businesses, it
Dr. JOSEPH T. WELLS, CFE, CPA, is the founder evidence that Internet fraud has evolved into new methodologies that criminals use to gather, also presents endless potential for crooks and
and Chairman of the Board of the Association organize, and create a whole new category of victims. Highly recommended reading!” O scammers. The same scams found through the
of Certifi ed Fraud Examiners (ACFE), the world’s — Dick Riley, PhD, CFE, CPA, Louis F. Tanner Distinguished Professor of Public F mail and phone have crept their way onto the
largest anti-fraud organization. Mr. Wells R Internet and into e-mail, with new variations of
writes, researches, and lectures to business and Accounting, College of Business & Economics, West Virginia University LR cyber scams emerging all the time.
professional groups on fraud-related issues. He D
has authored seventeen books and scores of “Mr. Wells’s compendium of actual cases illustrates that traditional investigative techniques can A Internet Fraud Casebook: The World Wide Web of
articles. His writing has won numerous awards, W Deceit presents the collected insights of some of
including the top articles of the year for Internal help solve modern Internet crimes. As the Internet is used to commit fraud, so it can be used to the most experienced fraud examiners around the
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Auditor magazine and the Journal of Accountancy. investigate fraud. A valuable resource!” DU world. Handpicked and edited by Joseph Wells,
The American Accounting Association previously the founder and Chairman of the Association of
—Martha R. McVeigh, CFE, Rhode Island Department of the Attorney General E
named him Accounting Education Innovator Certifi ed Fraud Examiners (ACFE) — the world’s

of the Year for his pioneering work in fraud WD leading anti-fraud organization — this collection
examination education. “For anyone desiring to prevent, detect or prosecute Internet fraud, this tome is an engaging, of revealing case studies sheds new light into the
E dark corners of online fraud.
cutting-edge must-read. Well organized with plenty of practical guidance in each chapter.”
B

—Dennis M. Dunleavy, CFE, Alexandria, Virginia C Some of the forty-one cases in Internet Fraud
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Casebook include:

FA
“We were taught — follow the cash. Now, we need to learn — follow the IP address. Either • “From Russia with Love?,” Ernesto F. Rojas

D • “Dangerous Diet,” Nancy E. Jones
way, it leads to the cash and the bad guys. Just when you think you’ve seen it all, you realize the
ES • “A Business within a Business,” Alan Greggo
tremendous creativity of the criminal mind.”
C • “The eBay-Fraud Brothers,” Jerry Buchleitner
—Philip C. Levi, CFE, CMC, FCA, CPA/CFF, CA·IFA, Levi & Sinclair, LLP EE • “The G.I. Hacker,” Bruce L. Owdley
IB • “The Business of Making Money,” Bill Maloney
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• “ Wire Transfers from Nowhere,”
“The book was frightening, enlightening, and helpful. The devious minds of fraudsters never
O Kenneth C. Citarella and Laura A. Forbes
cease to amaze me. Thankfully, we have some very diligent and talented fraud examiners out
there who are equal to the task. My hat’s off to them.” Each case in this indispensable casebook explores
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various kinds of Internet fraud as well as their
—Ron Durkin, CFE, CPA, Durkin Forensic Incorporated
assorted sub-schemes: phishing, online auction
fraud, security breaches, counterfeiting, and
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others. In addition, each case offers an informative
and entertaining look into the complex social
factors behind fraudulent behavior on the Web.
The observations of each fraud examiner, drawn
—continued on back cover—
index 05/18/2010 12:30:8 Page390
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Internet Fraud Casebook
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Internet Fraud Casebook
THE WORLD WIDE WEB OF DECEIT
Edited by
Joseph T. Wells

John Wiley & Sons, Inc.
FFIRS 05/18/2010 12:32:6 Page4
Copyright#2010byAssociationofCertifiedFraudExaminers.Allrightsreserved.
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LibraryofCongressCataloging-in-PublicationData
Internetfraudcasebook:theWorldWideWebofdeceit/editedbyJosephT.Wells.
p.cm.
Includesindex.
ISBN978-0-470-64363-1
1. Internetfraud–Casestudies. 2. Computercrimes–Casestudies. 3. Computer
security–Casestudies. I. Wells,JosephT.
HV6773.I5732010
0
364.163–dc22 2010013506
PrintedintheUnitedStatesofAmerica
10 9 8 7 6 5 4 3 2 1
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ToJamesD.Ratley,myfriendandcolleague
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FTOC 05/18/2010 12:30:39 Page7
Contents
Preface xiii
InternetFraudTree xvii
Chapter 1 PHANTOMFIGURINES 1
JohnOuellet
Chapter 2 FROMRUSSIAWITHLOVE? 13
ErnestoF.Rojas
Chapter 3 BEHINDASMOKESCREEN 21
JayDawdy
Chapter 4 CARS,CARDS,CHEMICALSANDCRAYONS 31
AlSternberg
Chapter 5 SMALL-TOWNBOYS 43

AndreaLeeValentin
Chapter 6 DANGEROUSDIET 51
NancyE.Jones
Chapter 7 THESUBURBANSPOOFER 59
JamesB.Keith
Chapter 8 DON’TMESSWITHTEXAS 69
KasondraN.D.Fehr
vii
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viii Contents
Chapter 9 HOTWIRE 81
RyanW.Mueller
Chapter 10 ABUSINESSWITHINABUSINESS 89
AlanF.Greggo
Chapter 11 DOUBLEPLAY 97
DelenaD.Spann
Chapter 12 THEeBAY-FRAUDBROTHERS 105
Gerard(Jerry)Buchleitner
Chapter 13 NOT-SO-PRECIOUSMETALS 113
MichaelJ.Molder
Chapter 14 THECOOL-CASHSYNDICATE 125
AustineS.M.Adache
Chapter 15 DASTARDLYDESIGN 133
PrabhatKumar
Chapter 16 THERECKLESSCLERK 141
OlegLykov

Chapter 17 CLOSEQUARTERS 151
JohnP.Grancarich
Chapter 18 PLAYINGWITHFIRE 161
HankJ.Brightman
Chapter 19 HACK,PUMPANDDUMP 171
NadiaBrannon
Chapter 20 DANGEROUSLEARNINGCURVE 179
AhmedR.Kunnumpurath