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Federal Trade Commission Explained

Federal Trade Commission Explained

What is the Federal Trade Commission?
The Federal Trade Commission is an independent government agency of the United States. Established in 1914 by the Federal Trade Commission Act, the Federal Trade Commission maintains its principal mission of promoting consumer protection and preventing harmfully anti-competitive business practices.
The Federal Trade Commission Act was instituted by President Woodrow Wilson, in large part, to dissuade the presence of trusts, which acted as major political concerns during the Progressive Era. During modern times, the Federal Trade Commission Act is responsible towards delegating the enforcement of additional business regulation statutes. Since the agency’s inception, the Federal Trade Commission has enforced numerous provisions of various legislations to monitor situations revolving around antitrust statutes and consumer protection law.
The Federal Trade Commission is led by five commissioners who are first nominated by the President of the United States and subsequently elected or confirmed by the United States Senate. Under the Federal Trade Commission Act, regulations were instituted to ban uniform party representation of the elected commissioners; no more than three Commissioners may be of the same political party. A commissioner’s term in the agency lasts seven years and the terms are staggered so that in a given year only one Commissioner’s term will expire.
The Bureau of Consumer Protection: The Bureau of Consumer Protection’s primary responsibility is to protect consumers against deceptive or fraudulent acts in commerce. With written consent of the Federal Trade Commission, the Bureau of Consumer protection, through their legal professionals, enforce federal laws related to consumer affairs in addition to the rules promulgated by the Federal Trade Commission.
The functions of the Bureau of Consumer Protection regulates commerce and promotes fair business practices by conducting investigations, enforcing various actions, and providing consumer and business education to the fundamental players of commerce.
The Bureau of Consumer Protection will supply the various methods and functions to the following areas or concerns: financial products and practices, advertising and marketing, privacy and identity protection, telemarketing fraud, etc. Under the Federal Trade Commission Act, the confirmed Commissioner possesses the authority to bring actions in federal court through its own legal professionals. In matters of consumer protection, the Federal Trade Commission supports the United States Department of Justice.
The Bureau of Competition: The Bureau of Competition is the primary division of the Federal Trade Commission responsible for preventing and eliminating “anticompetitive” business practices. The Bureau of Competition achieves this through the enforcement of various antitrust laws, the investigation practices into non-merger business practices that may impede competition, and through conducting a review of proposed mergers.
Practice or non-merger situations that may be impeding competition include any merger, which involves agreements between direct competitors (horizontal restraints) and vertical restraints where agreements among businesses at various levels in the same industry are accomplished (agreements made between suppliers and commercial buyers).
Bureau of Economics: The Bureau of Economics was created to support the Bureau of Competition and Consumer Protection by providing knowledge and resources related to the economic impacts of the Federal Trade Commission’s operation and legislation.

Activities of the Federal Trade Commission
The Federal Trade Commission accomplishes its mission statement by conducting investigations that are brought to light by reports from businesses and consumers, congressional inquiries, reports in the media, and pre-merger notification filings. The investigations conducted by the FTC may pertain to an entire industry or a single company.
The primary issues that the FTC targets include, false advertising, other forms of fraud and deceptive practices that seek to take advantage of the consumer. The court system of the United States has identified three primary factors that must be considered in consumer unfairness cases: the practice either injures the consumer, violates an established public policy, and the act or transaction is unscrupulous and unethical at its core.

Identity Theft Explained

Identity Theft Explained

What is IdentityTheft?
Identity Theft is definedcriminal act of fraudulentlyobtaining the personal information belonging to another individual, and subsequently assuming that person’sidentity without the expressed consent – this type of fraudulent representation can be facilitated in order to achieve a variety of outcomes. Typically, an individual committing identity theft will utilize deceptive means in order to gain access to the personal and private information belonging to another individual; this can be done through wire fraud or the illegal entry into an individual’s personal records – once this information is obtained, the individual committing identity theft will typically pose as that individual, unlawfully acting in that person’s place in order to achieve economic gain.

Types of Identity Theft
Although the criminal means of Identity Theft can vary in nature and setting, a vast array of negative outcome – in the form of damage, theft, and loss – exist; due to the expansiveness of Identity Theft, the severity of the crime is oftentimes corollary to the severity of the latent consequence(s) – loss sustained as a result of Identity Theft can range from the misappropriation of monies to the unlawful attainment of documentation.
Identity Theft and Cyber Law
Many consider the most common form of Identity Theft to be facilitated through the useof virtual networks. In many cases, virtual networks – akin to a large majority of electronic communicative devices – reside within the jurisdiction of Cyber Law; additional means of electronic identity theft can include information technology networks, telecommunications, and the Internet:
•    Online Identity theft can result in the illegal attainment of stolen property and goods acquired through an online commercial marketplace; this is also known as E-Commerce (electronic commerce)
•    Purchase orders can be placed by individuals in possession of unlawful personal and financial information, while the victim will discover charges incurred for products and goods delivered elsewhere; in order to reduce the risk of capture, individuals well-versed in Identity Theft will request that the goods be shipped to anonymous, remote locations
•    The attainment of passwords
Identity Theft and Immigration Law
The facilitation of Identity Theft as a means to unlawfully attain illegal – albeit official – documentation is not uncommon. In lieu of engaging in the legal procedure of the adjustment of individual immigration status, criminal operations have taken to the illegal attainment of personal information under the ownership of a victim in order to submit fraudulent documentation. As a result, official – and oftentimes governmental – documentation can be acquired in such deceptive means; in a majority of cases, the victims will be unaware as to document and form requests unlawfully conducted in their name:
•    Through the use of stolen – or immigration documentation attained by illicit means – individuals can fraudulently assume the identity of others in order to claim immigration status, adjust employment status, and gain access to unlawful financial accounts
•    Stolen – or fraudulently attained immigration documentation – can pose a security threat, as well; without reputable identification, tabs and records cannot be adequately kept with regard to individuals leaving and entering the United States

Two Power Armenian Men Sentenced for Fraud Scheme

Two Power Armenian Men Sentenced for Fraud Scheme

On November 28, 2012, the US Attorney’s Office for the Central District of California stated that Angus Brown, aka “Homicide,” and Arman Sharopetrosian, aka “Horse,” received additional prison sentences for operating a identity theft scheme out of the Avenal State Prison.  

The two men and other Armenian Power gang members worked with African-American street gang members and bribed co-conspirators at banks in order to gain control of bank accounts.  The scheme caused at least $8 million in losses.  

United States District Judge David O. Carter said it was one of the most sophisticated fraud schemes he’s seen in his time as a judge.  

Angus Brown was serving a prison term for identity theft at the time of his arrest, and Arman Sharopetrosian was serving a 10-year sentence for shooting at a car and carrying a concealed weapon.  

During the scheme, Brown and Sharopetrosian were able to steal bank information from mostly elderly victims and forged signatures of the victims.  Checks worth large amounts of money were then deposited in bank accounts set up the conspirators.  Recruited bank employees identified accounts and victims that were less likely to notice their identities were stolen.  

During the case, prosecutors stated: “[The defendants’] express purpose was to target bank customers with large-value accounts who were not proficient in checking up on their accounts via the Internet [and] sought to use that information to plunder the victims’ life savings.”  

Sharopetrosian was found guilty of bank fraud conspiracy, four counts of bank fraud, and seven counts of aggravated identity fraud.  Brown pleaded guilty to bank fraud conspiracy, bank fraud, and 17 counts of aggravated identity theft.  

20 defendants were named in the indictment, and most of the defendants will be sentenced in the next couple of months.  Some of the defendants have already received 51 months in prison.  

Source: Federal Bureau of Investigation

Mexican National Participated in Identity Trafficking Scheme

Mexican National Participated in Identity Trafficking Scheme

On November 26, 2012, the Department of Justice announced that Jose Sergio Garcia-Ramirez from Rockford, Illinois, received 58 months in prison for trafficking stolen identities and other identifying documents.  He was ordered to forfeit $35,900, and he will be removed from the United States after he serves time in prison.  

According to court documents, individuals in the Savarona area of Caguas, Puerto Rico were able to obtain Puerto Rican identities and other identifying documents.  Conspirators also operated in the United States and sold social security cards and Puerto Rican birth certificates for $700 to $2,500.  

The brokers asked for the identities from the Savarona suppliers by using coded telephone calls and text messages.  The calls initiated money transfers after which documents were sent by U.S. mail.  

Court documents further indicate that some of the brokers used Puerto Rican identities to use in part with their trafficking operation as well.  Most of the customers, however, used the Puerto Rican identities to obtain state driver’s licenses.  Some of the customers went as far as committing financial fraud with the identities.  

The Justice Department states that brokers in the scheme were operating in at least the following areas:

•    Rockford, IL
•    DeKalb, IL
•    Aurora, IL
•    Seymour, IN
•    Columbus, IN
•    Indianapolis, IN
•    Hartford, CT
•    Clewistown, FL
•    Lilburn, GA
•    Norcross, GA
•    Salisbury, MD
•    Columbus, OH
•    Fairfield, OH
•    Dorchester, MA
•    Lawrence, MA
•    Salem, MA
•    Worcester, MA
•    Grand Rapids, MI
•    Nebraska City, NE
•    Elizabeth, NJ
•    Burlington, NC
•    Hickory, NC
•    Hazleton, PA
•    Philadelphia, PA
•    Houston, TX
•    Abingdon, VA
•    Albertville, AL
•    Providence, RI

53 people have been charged for participating in the identity trafficking scheme, and 18 of the defendants have pleaded guilty so far.

Source: Department of Justice

Maryland Man Stole Identities of Mental Health Patients

Maryland Man Stole Identities of Mental Health Patients

On November 8, 2012, Immigration and Customs Enforcement (ICE) reported the Christopher Andre Devine from Philadelphia pleaded guilty to bank fraud and aggravated identity theft.  The stolen identities were used to open fake bank accounts.  

During the plea agreement, Devine and co-defendants admitted that they opened bank accounts in order to get check cards.  The co-conspirators would then deposit fraudulent checks into the accounts and withdraw cash from ATM machines.  The co-defendants are Quanishia Williamson-Ross and Lenee E. Williamson.  

Devine admitted that he stole identities from 21 people in an adult residential program for mental needs after he purchased the information from an employee with the program.  Devine used this information to open checking accounts over the telephone and internet.  

Devine and the co-defendants bought items from restaurants, drug stores, grocery stores, convenience stores, gas stations, and numerous other businesses with the check cards.  They also used the check card to pay for utilities like cable and cell phones.  

Devine was caught in December of 2011 when authorities searched a van and two different residences occupied by the defendants.  They found hundreds of credit cards, debit cards, social security cards, driver’s licenses, and personal information like names, addresses, credit information, and social security numbers.  

About 300 people had their identities stolen in all, and 21 were from the mental health program.  There were a total of 73 fraudulent bank accounts opened.  

Each of the defendants faces a maximum sentence of 30 years in prison for the bank fraud and two years in prison for the aggravated identity theft.  

The investigation was led by ICE Homeland Security Investigations (HSI) in Baltimore, the Wicomico County Sheriff’s Office, the IRS’s Criminal Investigations, and the Social Security Administration in Philadelphia.  The enforcement was part of President Obama’s Financial Fraud Enforcement Task Force.

Source: U.S. Immigration and Customs Enforcement

40 Defendants, 20 Cases: Florida Identity Theft Widespread

40 Defendants, 20 Cases: Florida Identity Theft Widespread


On October 10, 2012, the US Attorney’s Office for the Southern District of Florida announced that 40 defendants were charged in 20 different cases for identity theft that resulted in millions of dollars of fraudulent tax filings.  
The Federal Trade Commission declares that Florida had the highest identity theft rate in 2011.  The FTC reports that Miami is where most of the identity thefts occur in Florida.  For every 100,000 residents in the United States, about 178 complaints are filed for identity theft.  Miami makes this figure look small.  For every 100,000 residents in Miami, there are about 324.1 complaints.  
The U.S. Treasury Inspector General for Tax Administration (TIGTA) also announces that Florida has the highest rate of tax refund fraud in the United States.  TIGTA estimates that about 74,496 fraudulent returns were filed in Miami alone and caused about $280 million in fake refunds.  The per capita of false returns in Miami is 46 times higher than the national average, and the epidemic is growing.  According to TIGTA, the IRS is projected to issue about $21 billion in fraudulent tax refunds in the next five years.  
The U.S. Attorney’s Office for the Southern District of Florida recently created the Identity Theft Tax Fraud Strike Force to combat the epidemic.  The Strike Force is made up of multiple agencies and police departments around the Miami area.  
U.S. Attorney Wifredo A. Ferrer stated, “So far this year, we have charged a total of 79 individuals responsible for almost $40 million in fraudulent tax refunds obtained through identity theft.  The cases being investigated and prosecuted include victims from all walks of life, including police officers, potential U.S. Marine recruits, members of the Armed Forces, holocaust survivors, school children, hospital patients, the elderly and infirm, incarcerated prisoners, and even the dead.”  
Source: Federal Bureau of Investigation

Police Get Lucky Catching Repeat Identity Theft Offender

Police Get Lucky Catching Repeat Identity Theft Offender

On October 16, 2012, the US Attorney’s Office for the District of Oregon announced that Tigran Khachatrian of Glendale, California, was sentenced to 70 months in federal prison for a huge identity theft scheme as well as for the possession of counterfeit devices.  The sentencing stems from a routine traffic stop that occurred in December of 2010.  

During the traffic stop, an Oregon State Trooper stopped Khachatrian and the co-defendant, Arsen Dabaghyan, on Interstate 5 around the Medford area.  They state trooper asked to search the car, and the two defendants consented to the search.  The state trooper found a total of 139 credit cards, 123 gift cards, and false forms of identification.  Additionally, the state trooper found three laptop computers, four cell phones, an MSP digital card reader, a GPS device, a digital camera, and instructions for keypad configurations at gas stations in California and Washington.  

After an investigation by the Southern Oregon High-Tech Crimes Task Force, it was determined that one of the laptops had software to create credit cards and debits cards.  Another program had the ability to pull information from skimmed bank cards.  

The FBI led a further investigation and found that the defendants placed skimming devices at multiple gas stations in the state of Washington in order to steal account information from the victims.  The defendants were able to obtain the credit card numbers and card holder information and then create duplicate credit cards with their computer.  

Khachatrian had multiple theft convictions in 1986.  He also had charges for identity theft, forgery and more in 2003.  After he serves his 70 months in federal prison, Khachatrian will receive three years of supervised release.  He is also ordered to pay restitution and forfeit all of the equipment that was used during the crimes.  

Source: Federal Bureau of Investigation

Barbados National Claimed $120M in False Tax Refunds

Barbados National Claimed $120M in False Tax Refunds

On November 7, 2012, the Department of Justice reported that Andrew J Watts was sentenced to 114 months in prison by US District Judge Joan Gottschall in Chicago.  He was also ordered to pay $1.7 million in restitution for stealing identities and engaging in a federal income tax refund fraud scheme.  Watts is a Barbados national.  

Court documents show that Watts filed the fraudulent federal income tax returns from 2007 to 2011.  He used the names of deceased taxpayers and forged their signatures to obtain the fraudulent refunds, and he even claimed himself as the deceased person’s representative in some cases.  

In total, Watts filed more than 470 fraudulent federal income tax returns.  He is believed to have claimed about $120 million, and the Internal Revenue Service issued over $10 million in refunds.  In order to conceal the fraud, Watts instructed the IRS to send the refund checks to an electronic deposit or an address he controlled.  

Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, stated: “While all taxpayers are victims when criminals file false tax returns using stolen identities, those who falsely use the names of deceased individuals add to the grief and burdens of their families.”

Watts pleaded guilty on July 10, 2012, and he pleaded to one count of aggravated identity theft and one count of mail fraud.

IRS-Criminal Investigation Chief Richard Weber noted: “IRS-Criminal Investigation has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.  Individuals who commit refund fraud and identity theft of this magnitude deserve to be punished to the fullest extent of the law.”

Assistant U.S. Attorney Patrick J. King, Jr. with the Northern District of Illinois and Trial Attorney Michelle Petersen with the Department of Justice’s Tax Division were in charge of prosecution.

Source: U.S. Department of Justice

What You Need To Know About Hacking

What You Need To Know About Hacking

What is Hacking?
Hacking crime is committed through the usage of computers, the Internet, or virtual networks, which is defined as the unlawful access of – or entry into – the computer terminal, database, or digital record system belonging to another individual; typically, hacking is conducted with the intent to commit a computer-based, electronic criminal act. Unlawfully, illegally, and harmfully collecting or amassing an individual’s private information with regards to the internet, a computer, or alternative electronic network may result the in the illicit possession and misuse of personal data without the consent of the victim.
Hacking into a computer – which can also be defined as virtual trespassing by means of collecting personal data in an intrusive manner – is one of the foremost means facilitated by individuals attempting to commit identity theft.

How is Hacking used for Identity Theft?
‘Hackers’ – the colloquial classification of individuals undertaking exploitative, manipulative, unethical, and illegal behavior or actions with the expressed intention to intrude on computer systems belonging to other individuals – may vary in experience, classification, and tactical maneuvering. While certain individuals undertaking hacking measures in order to commit identity theft may do so in obtrusive and purposeful means, other hackers may act in clandestine, illicit, and secretive manners.
However, the victim of identity theft may be impressionable, impressionable, and oftentimes vulnerable individuals unfamiliar with computational systems.  Upon this unlawful access of a computer terminal belonging to the victim, the perpetrator may facilitate methodology that includes the commandeering or illicit removal of personal, private, or financial information.

What is an Online Predator?
Financial Online Predators typically target unsuspecting or impressionable victims commonly unfamiliar with the Internet or computational systems; Financial Online Predators may attempt to extract personal and private information from their victims in order to commit fraud, cause destruction, or facilitate means of extortion.
Upon unlawfully accessing data stored in its electronic form, a victim may be unaware that any or all information has been repossessed – and subsequently misused within an identity fraud operation. Hackers acting as online predators may target a wide range of electronic networks, including commercial and residential computer systems.

How to Prevent Electronic Identity Theft
Due to technological innovation, electronic identity theft is considered by many to be one of the most recently-developed crimes, credited – in part – to the ongoing advent of computer-based technology.
This type of technology relies heavily on the Internet and online activity, and as a result, regulations and oversight of this type of activity has been expressed in the spectrum of preventative measures involving the cessation of electronic identity theft.
Companies providing methods of Identity theft prevention – including Lifelock, which is one of the most widely-acclaimed and recognized – have employed protective measures ranging from securing online perimeters to communicative transmission inquiring about the validity of unsubstantiated activity; these types of companies have found their respective niche within the prevention of identity fraud upon providing protection in lieu of infringing on personal privacy.