Category: news_

WhoIs scamgroup.com – They’ve vowed to Destroy Ripoffreport.com

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scamguard2

The website scamgroup.com make the following claim that paying Ripoffoffreport.com to remove complains is a cardinal sin. They have vowed to expose those entities and individuals who pay Ripoffreport.com aka ED Magedson a fee.
The operators of this website is affiliated with a host of consumer complaint websites such as www.scamguard.com others populating the internet

scamguard

This is a brand page for the SCAMGUARD trademark by Marketing Space LLC in Walnut, CA, 91789. Write a review about a product or service associated with this SCAMGUARD trademark. Or, contact the owner Marketing Space LLC of the SCAMGUARD trademark by filing a request to communicate with the Legal Correspondent for licensing, use, and/or questions related to the SCAMGUARD trademark.

On Thursday, July 11, 2013, a U.S. federal trademark registration was filed for SCAMGUARD by Marketing Space LLC, Walnut, CA 91789. The USPTO has given the SCAMGUARD trademark serial number of 86008268. The current federal status of this trademark filing is REGISTERED.

The correspondent listed for SCAMGUARD is
BOYANA BOUNKOVA of
BOUNKOVA & BENNETT
1300 CLAY ST STE 600
OAKLAND, CA 94612-1427

The SCAMGUARD trademark is filed in the category of Computer & Software Services & Scientific Services .

The description provided to the USPTO for SCAMGUARD is Providing a website featuring technology that enables users to disclose, discuss and resolve consumer and business related complaints regarding dishonest or deceptive business practices.

Address lookup
lookup failed:www.scamgroup.com

Domain Whois record
Queried whois.internic.net with “dom scamgroup.com

Domain Name: SCAMGROUP.COM
Registrar: PDR LTD. D/B/A PUBLICDOMAINREGISTRY.COM
Whois Server: whois.PublicDomainRegistry.com
Referral URL: http://www.PublicDomainRegistry.com

Name Server: DNS1.NAUNET.RU
Name Server: DNS2.NAUNET.RU

Status: clientTransferProhibited
Updated Date: 31-oct-2013
Creation Date: 24-may-2013
Expiration Date: 24-may-2015

Last update of whois database: Wed, 21 May 2014 14:45:18 UTC
Queried whois.publicdomainregistry.com with “scamgroup.com

Domain Name: SCAMGROUP.COM
Registry Domain ID:
Registrar WHOIS Server: whois.publicdomainregistry.com
Registrar URL: http://www.publicdomainregistry.com

Updated Date: 31-Dec-2013
Creation Date: 24-May-2013

Registrar Registration Expiration Date: 24-May-2015
Registrar: PDR Ltd. d/b/a PublicDomainRegistry.com
Registrar IANA ID: 303
Registrar Abuse Contact Email: abuse-contact@publicdomainregistry.com
Registrar Abuse Contact Phone: +1-2013775952
Domain Status: clientTransferProhibited

Registry Registrant ID: DI_30536874
Registrant Name: Kirill U Viktorovich
Registrant Organization: Kirill U Viktorovich
Registrant Street: Kastanaevskaya 53-193
Registrant City: Moskva
Registrant State/Province: Moskva
Registrant Postal Code: 121108
Registrant Country: RU
Registrant Phone: +7.9269005864
Registrant Email: scamgroup@yandex.ru

Registry Admin ID: DI_30536874
Admin Name: Kirill U Viktorovich
Admin Organization: Kirill U Viktorovich
Admin Street: Kastanaevskaya 53-193
Admin City: Moskva
Admin State/Province: Moskva
Admin Postal Code: 121108
Admin Country: RU
Admin Phone: +7.9269005864
Admin Email: scamgroup@yandex.ru
Registry Tech ID: DI_30536874
Tech Name: Kirill U Viktorovich
Tech Organization: Kirill U Viktorovich
Tech Street: Kastanaevskaya 53-193
Tech City: Moskva
Tech State/Province: Moskva
Tech Postal Code: 121108
Tech Country: RU
Tech Phone: +7.9269005864
Tech Email: scamgroup@yandex.ru
Name Server: dns1.naunet.ru
Name Server: dns2.naunet.ru
DNSSEC:Unsigned
URL of the ICANN WHOIS Data Problem Reporting System:
http://wdprs.internic.net/
Last update of WHOIS database: 2014-05-21T14:45:29+0000Z

Registration Service Provided By: NAUNET SP

Network Whois record

Don’t have an IP address for which to get a record
DNS records

DNS query for http://www.scamgroup.com failed: TimedOut
DNS query for scamgroup.com failed: TimedOut
No records to display

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Arrest of Revenge Porn Operator in Oklahoma

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Attorney General Kamala D. Harris Announces Arrest of Revenge Porn Operator in Oklahoma

Friday, February 14, 2014
Contact: (415) 703-5837

LOS ANGELES — Attorney General Kamala D. Harris today announced the arrest of the alleged owner and operator of a revenge porn website who facilitated the posting of more than 400 sexually explicit photos of Californians and extorted victims for as much as $250 each to remove the illicit content.

Casey E. Meyering, 28, of Tulsa, Oklahoma was arrested yesterday in Tulsa by agents with the California Attorney General’s eCrime Unit, the Rohnert Park Department of Public Safety and the Tulsa Police Department. The Attorney General’s Office is seeking a Governor’s warrant for Meyering’s extradition to California, and he remains in custody pending the extradition hearing. According to documents filed in Napa County Superior Court, Meyering has been charged with 5 felony extortion counts.

“This behavior is the very definition of predatory and this website made a game out of humiliating victims for profit,” Attorney General Harris said. “These actions at their core are about one individual exploiting the privacy and trust of others for financial gain. We will continue to investigate and prosecute those who participate in these deplorable and illegal activities.”

Court documents allege that in 2013, Meyering owned and administered the website WinByState.com, which solicits the anonymous, public posting of private photographs containing nude and explicit images of individuals without their permission. Commonly known as revenge porn, the photos maybe obtained consensually by the poster during a prior relationship, or are stolen or hacked.

The investigation into WinByState.com began when a Northern California hacking victim discovered nude photos of herself on this site that had been stolen from her computer, according to court documents. Described as “a user supported website where you can trade your ex-girlfriend, your current girlfriend, or any other girl that you might know,” WinByState.com solicited uploaders to identify their “wins” according to city and state, sometimes using the victim’s complete or partial name. There were over 400 postings in the California forum, and at least one victim was under 18 at the time the photographs were taken, according to court documents.

Court documents also allege that WinbyState.com required victims to pay $250 via a Google Wallet account to remove posted photographs. The account was named TakeDownHammer, and was registered to Meyering at a non-existent Beverley Hills storefront. Law enforcement agents purchased a “takedown” for one the victims in Napa, and traced the funds to Meyering’s bank account in Tulsa, where surveillance footage from the bank identified him withdrawing money from the account.

The California Attorney General’s Office is currently working with GoDaddy.com to suspend the website pending the investigation and identification of additional victims.

In December of last year, Attorney General Harris announced the arrest of Kevin Christopher Bollaert, 27, of San Diego, who operated the revenge porn website ugotposted.com. He was charged with 31 felony counts of conspiracy, identity theft and extortion and is currently awaiting trial.

Attorney General Harris created the eCrime Unit in 2011 to identify and prosecute identity theft crimes, cybercrimes and other crimes involving the use of technology.

Individuals who feel they are victims of WinByState.com or other revenge porn websites should file a complaint with the California Attorney General’s office here: https://oag.ca.gov/contact/consumer-complaint-against-business-or-company.

Please note that a complaint contains only allegations against a person and, as with all defendants, Casey E. Meyering, must be presumed innocent unless and until proven guilty.

# # #

The Online Entrepreneur Inc. aka Dave’s Consulting Associates, Inc

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Defendants Behind ‘Online Entrepreneur’
Work-at-Home Scheme Settle FTC Charges

For Release

March 20, 2014

The operators of a business opportunity scheme have agreed to settle Federal PayDayLoanTrade Commission charges that they defrauded consumers through the sale of a work-at-home program that purportedly provided consumers with their own websites that would enable them to earn a significant income by affiliate marketing with websites of well-known companies such as Prada, Sony, Louis Vuitton, and Verizon.

The settlement is part of a federal-state crackdown on scams that falsely promise jobs and opportunities to “be your own boss” to people who are unemployed or underemployed. Under the settlement, the defendants behind the operation, The Online Entrepreneur, will be banned from selling business and work-at-home opportunities.

According to an FTC complaint filed in November 2012, the defendants sold the “Six Figure Program” to consumers as a purportedly no-risk, money-back guaranteed opportunity to make money via their own website, falsely claiming that, for a $27 fee, they would enable consumers to affiliate with well-known companies’ websites and earn commissions. After purchasing the program, consumers learned that they had to pay $100 or more in additional costs just to set up their websites. The court subsequently halted the allegedly deceptive practices, froze the defendants’ assets, and put the companies into receivership pending a court hearing.

The settlement order announced today permanently prohibits The Online Entrepreneur Inc., Ben and Dave’s Consulting Associates, Inc., and David Clabeaux from selling business and work-at-home opportunities, misrepresenting that consumers are likely to earn money and misrepresenting any material fact about a product or service. They also are barred from failing to clearly disclose the terms of any offer before consumers provide billing information, and making a representation unless it is true and the defendants have competent and reliable evidence to substantiate the claim. In addition, the order prohibits these defendants from selling or otherwise benefiting from consumers’ personal information, and failing to properly dispose of customer information.

The order imposes a judgment of more than $2.9 million, which will be suspended when Clabeaux has surrendered real estate, personal property, and bank and investment accounts. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition. Litigation continues against the remaining defendant, Benjamin Moskel.

The Commission vote authorizing the staff to file the proposed consent judgment was 4-0. The consent judgment was entered by the U.S. District Court for the Middle District of Florida on March 13, 2014.

NOTE:  Consent judgments have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Contact Information

MEDIA CONTACT:

Frank Dorman,
Office of Public Affairs
202-326-2674

STAFF CONTACT:

Barbara E. Bolton,
FTC’s Southeast Region
404-656-1362

Related Article:

Target Data Beach Highlight How Pervasive This Is Becoming

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English: Logo of Target, US-based retail chainThe recent case of Target Corporation data beach where  credit and debit cards data for some 70 million customer accounts were compromised is just another reminder of how pervasive cyber crimes are becoming. An escalating and alarming trend.

Since human existence, crime have always been a part of society. Crime no matter what kind have been local and dealt with by local law enforcement. Crime is like death and taxes or nudity and profanity. Society have accepted these irrational behaviors as lexicons and have dealt with crime through parenting and the community. Today, crime is now at a new level, it’s globalization. It’s international. It’s a global village.

Here’s why. Take the case of the Somalian pirates. These pirates hijacked cargo ships and demand ransom payments for which the multinational ship owners pay the ransom demanded.

In medieval times, pirates who hijacked ships would unload the cargo on board the captured vessels to land and resell the cargo (merchandise) to the public. Today pirates demand ransom payments which are made via bank transfers. Technology has invaded crime. Clearly the Somalian pirates have accomplices and co-conspirators.

Cyber-crimes as we have documented and monitored their activities online over the years  encompasses a network of individuals who are collaborating directly and indirectly by their activities and participation. These incidents are not carried out by some kid or rogue individuals – hackers. This is organized crime. Security experts and news media groups should STOP referring to these thugs as hackers.

These individuals include a web of people, i.e. politicians, investment bankers, venture capitalists, Sleazeball Attorneys, unscrupulous IT Professionals [Data Centers/Hosting Companies. Affiliates], reputable news media group, employers – masquerading as legitimate, criminal store fronts, employees and other  who have access to data management and accessibility and more importantly, our judicial system that allows frivolous complaints to be heard and Judges that seem to tolerate LIES.

To combat cyber crimes, our judicial system need to play a more vigorous and aggressive role. The Courts in it’s infinite wisdom are precluded from throwing out bogus lawsuits. However, Courts do have Judicial Discretion. Courts need to exercise judicial discretion and throw out bogus lawsuits that take up courts time and resources as these criminals see the judicial systems as safe havens.

Because law enforcement  are up against a network of bureaucratic professionals interrelated by their business practices and well financed, any threat of eradicating cyber crime rest with the Courts. Law enforcement are not adequately equip to deal with cyber-crimes. They just don’t have the resources that is required to put a dent in cyber crimes. That is why Judges and Attorneys who are officers of the Court need to take the lead. Courts need to have zero tolerance for lawsuits that are frivolous when it relates to cybercrime and clearly where the public are at risk.

Cyber crime for these individuals is INSTANT LOTTERY WEALTH; such perverse thinking is the root of cybercrime.

How pervasive has this become? Is this the new norms? In this new era of smart phones, ipads, Facebook, Google, Twitter and other technological advancements?

Tell Us What You Think
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Buyer Beware: Stay Alert on Cyber Monday

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The Monday after Thanksgiving has become known as the biggest online FBIshopping day of the year, with companies offering discounts galore to entice customers. But it’s also a day that scammers hope to use to their benefit by trying to lure in victims with offers that sound too good to be true.

From fraudulent auction sales to gift card, phishing, and social networking scams and more, cyber crime schemes are ever-evolving and, unfortunately, still successful. Here are some tips you can use to avoid becoming a victim of cyber fraud:

  • Purchase merchandise only from reputable sellers, and be suspiciousCredit Card of websites that do not provide contact information; also be wary if the seller only accepts wire transfers or cash.
  • Do not respond to or click on links contained within unsolicited (spam) e-mail.
  • Be cautious of e-mails claiming to contain pictures in attached files; the files may contain viruses. Only open attachments from known senders. Scan the attachments for viruses if possible.
  • DO A WHOIS to see who the OWNER IS
  • Log on directly to the official website for the business identified in the e-mail instead of linking to it from an unsolicited e-mail. If the e-mail appears to be from your bank, credit card issuer, or other company you deal with frequently, your statements or official correspondence from the business will provide the proper contact information.
  • Contact the actual business that supposedly sent the e-mail to verify that the e-mail is genuine.
  • If you are requested to act quickly or there is an emergency that requires your attention, it may be a scam. Fraudsters create a sense of urgency to get you to act quickly.
  • Remember—if it looks too good to be true, it probably is.

This Cyber Monday—and every day—the FBI reminds shoppers to exercise due diligence online. Stay alert and beware of cyber criminals and their aggressive and creative ways to steal money and personal information.

Resources

FTC Settlements Crack Down on Payment Processing Operation

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For Release: 11/18/2013

FTC Settlements Crack Down on Payment Processing Operation that Enabled ‘Google Money Tree’ Scammers to Charge Consumers $15 Million in Hidden Fees

The Federal Trade Commission is continuing its crackdown on payment processing operations that enable scam artists to charge consumer accounts despite signs ofSeal of the United States Federal Trade Commis...

ongoing fraud and unauthorized transactions.  Today, the Commission announced a proposed settlement resolving allegations that a payment processor, Process America Inc., and its owners, Kim Ricketts, Keith Phillips and Craig Rickard, used unfair tactics to open and maintain scores of merchant accounts for Infusion Media Inc., which perpetrated the “Google Money Tree” work-at-home scheme.  Using these merchant accounts, Infusion Media charged more than $15 million in unauthorized charges on consumers’ debit and credit card accounts.

Payment processors and Independent Sales Organizations (ISOs) enable merchants to charge consumers’ credit cards for products and services.  In exchange, payment processors and ISOs get paid for each payment transaction the merchant processes.

In June 2009, the FTC charged the Infusion Media defendants  with falsely claiming that consumers could earn $100,000 in six months, misrepresenting an affiliation with Google, and tricking consumers into signing up for automatic monthly charges that would continue until the consumer took affirmative steps to cancel.

The complaint against Process America alleges that the defendants knew or should have known that they were processing charges that consumers had not authorized.  Evidence that consumers were being charged without their permission included plainly deceptive statements on merchant websites, notices that the merchant should be placed in Visa and MasterCard chargeback monitoring programs, and chronically excessive chargeback rates – the percentage of charges that are challenged by consumers and result in the charges being reversed.   From 2008 through 2009, the defendants opened and maintained 131 merchant accounts through which the perpetrators processed more than $15 million in unauthorized charges on consumer debit and credit card accounts.

To keep Infusion Media’s merchant accounts open, the defendants allegedly engaged in tactics that were designed to evade fraud monitoring programs implemented by Visa and MasterCard.  These tactics included submitting merchant applications containing false information and “load balancing” – distributing transaction volume among numerous merchant accounts.  As a result, Infusion Media’s scam operated for nearly a year, and Process America continued to earn fees from its payment processing activity.

To resolve the allegations in the complaint, the individual defendants have agreed to separate permanent injunctions containing prohibitions and restrictions on their future payment processing activities:

  • Rickard is banned from payment processing and acting as an ISO.  He is prohibited from acting as a sales agent for any client engaged in (a) unfair or deceptive business practices; (b) certain categories of high-risk activities, including negative-option marketing (where the seller interprets consumers’ silence or inaction as permission to charge them), money-making opportunities, credit card or identity theft protection, timeshare resale services, buying clubs, medical discount plans; or (c) conduct that has qualified a client for a chargeback monitoring program.
  • Rickard is also prohibited from acting as a sales agent for any client without first screening them for unfair or deceptive business practices.  The order imposes a judgment of more than $184,000 that will be suspended based on his inability to pay.  The full judgment will become due immediately if Rickard is found to have misrepresented his financial condition.
  • Ricketts and Phillips are prohibited from acting as payment processors, ISOs, or sales agents for any client engaged in (a) unfair or deceptive business practices; or (b) certain categories of high-risk activities certain categories of high-risk clients.  They also are barred from acting as a sales agent for any client without screening and monitoring them for unfair or deceptive business practices.

In addition, Process America’s Chief Restructuring Officer has agreed to recommend and seek authority from the United States Bankruptcy Court for the Central District of California to enter into the proposed settlement with the FTC.  Under the proposed settlement:

  • Process America is prohibited from payment processing or acting as an ISO or sales agent for any client engaged in negative-option marketing or unfair or deceptive business practices, and from failing to screen, monitor, and promptly investigate clients for such practices.

The orders prohibit all of the defendants from selling or otherwise benefitting from consumers’ personal information, and failing to properly dispose of customer information.

The Commission vote authorizing the staff to file the complaint and approving the proposed consent judgment was 4-0.  The proposed settlement with Process America is subject to the United States Bankruptcy Court for the Central District of California’s approval of a Federal Rule of Bankruptcy Procedure 9019 Motion for Compromise.  The proposed consent judgments with Process America and the individual defendants are also subject to court approval.

NOTE:  The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest.  Consent judgments have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Frank Dorman,
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Karen S. Hobbs
Bureau of Consumer Protection
202-326-3587Benjamin R. Davidson
Bureau of Consumer Protection
202-326-3055

________________________

Federal Trade Commission v. Process America, Inc.; Craig S. Rickard; Kim Ricketts; and Keith Phillips, Defendants.

(United States District Court for the Central District of California)

FTC File No. 102 3184

November 18, 2013

FTC Charges Marketers with Making Unsubstantiated Claims

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For Release: 12/02/2010

FTC Charges Marketers with Making Unsubstantiated Claims that They Could Eliminate Consumers’ Debt

As part of its continuing crackdown on scams that target consumers in financial distress, the Federal Trade Commission has charged three debt relief operations

Seal of the United States Federal Trade Commis...

Seal of the United States Federal Trade Commission. (Photo credit: Wikipedia)

with making unsubstantiated claims to lure consumers nationwide into paying thousands of dollars in up-front fees, but failing to reduce credit card debts as promised.

According to the FTC’s two complaints, the defendants made deceptive claims that consumers who enrolled in their programs could eliminate 30 to 60 percent of their credit card debt and be out of debt in 18 to 36 months. The defendants marketed their services via websites and TV and radio ads that urged consumers to call toll-free numbers for a free consultation and to enroll in their debt relief programs. One operation claimed to use “secret programs most credit card companies won’t tell you about.” The other operation touted its “established relationships” with creditors and claimed that its program would “save you literally thousands of dollars.” The defendants charged consumers up-front administrative fees, monthly maintenance fees, negotiation fees, and in some instances, a cancellation fee.

The FTC’s complaints charge that few consumers received the promised results. Many consumers canceled or dropped out of the programs before their debt was reduced because they couldn’t afford to pay the defendants’‘ sizable advance fees and accumulate money to pay off their debts.

Consumers looking for help with credit card debt should be wary of anyone who tells them to stop paying their bills, to pay someone other than their creditors, or to stop talking to their creditors. Consumers should also be careful about paying for financial assistance before they receive it. The FTC recently announced changes to the Telemarketing Sales Rule that prohibit companies that sell debt relief services over the telephone from charging fees before they settle or reduce a customers’ credit card or other unsecured debt. This ban on advance fees protects all consumers who enroll in a debt relief service after October 27, 2010, and specifies that fees for debt relief services may not be collected until:

  • the debt relief service successfully settles or changes the terms of at least one of the consumer’s debts;
  • there is a settlement agreement, debt management plan, or other agreement between the consumer and the creditor that the consumers has agreed to; and
  • the consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt relief provider.

The new provisions of the Rule also prevent debt relief providers from front-loading their fees if a consumer has enrolled multiple debts in one debt relief program. Click here for more information about the advance-fee ban. In addition, the Rule requires debt relief providers to make truthful and substantiated claims about their services. The FTC will actively enforce the Rule and these new provisions, as will the states, which also have enforcement authority under the Telemarketing Sales Rule.

The defendants in one of the two cases announced today are Financial Freedom of America, Inc., now known as Financial Freedom Processing Inc., Corey Butcher, and Brent Butcher. The second case names Debt Consultants of America Inc., Debt Professionals of America Inc., Robert Creel, Corey Butcher, and Nikki Creel, also known as Nikki Vrla.

The Commission vote to file the complaints was 5-0. The complaints were filed in the U.S. District Court for the Northern District of Texas, Dallas Division.

Click here for facts about settling credit card debts.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.

MEDIA CONTACT:
Frank Dorman,
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Anne LeJeune, FTC’s Southwest Region
Financial Freedom Processing
214-979-9371Shereen El Domeiri, FTC’s Southwest Region
Debt Consultants of America
214-979-9395
 

(FTC File Nos. 0923056, 0923152)
(Financial Freedom, Debt Consultants)

____________________________

Federal Trade Commission, Plaintiff
v.
Financial Freedom Processing, Inc.,
formerly known as Financial
Freedom of America, Inc., a corporation;
Corey Butcher, individually and as an officer of the corporation; and Brent Butcher, individually and as an officer of the corporation,
Defendants.

(United District Court for the Northern District of Texas)

Case No. 3:10-cv-02446

FTC File No.  092 3056

December 2, 2010
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FTC Stops Online ‘Yellow Pages’ Scam

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For Release: 11/19/2013

FTC Stops Online ‘Yellow Pages’ Scam; Canada-Based Operation Targeted Small Businesses and Churches in United States

At the Federal Trade Commission’s request, a federal judge has temporarily halted, and frozen the assets of, a Montreal operation that bilked more than $14

Seal of the United States Federal Trade Commis...

Seal of the United States Federal Trade Commission. (Photo credit: Wikipedia)

million from small businesses and churches in the United States for unwanted listings in online business directories. The FTC seeks to permanently stop the illegal practices and make the defendants return victims’ money – the scheme has generated more than 13,000 complaints from consumers.

“Hiding behind borders to scam churches and small businesses is a tactic that we’ve seen before,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Scammers need to know that we have great relationships with our law enforcement partners in Canada and, as this case shows, we can and will work together to protect our consumers.”

According to court papers filed by the FTC, the defendants operated from Montreal, using corporate shells and mail drops in the U.S. to hide their actual location. Typically, they made phone calls pretending they were verifying contact information to update or confirm existing directory listings. In some cases, the defendants said they were calling in response to a cancellation request, and asked to verify the organization’s contact information to confirm the cancellation. In fact, the defendants had no prior relationship with the consumers.

The bills sent by the defendants averaged $499.99 or more and had a “walking fingers” image often associated with a local yellow pages directory. Some consumers paid, thinking someone in their organization had ordered these listings. Other consumers paid after the defendants used partially recorded phone conversations with consumers who had verified their contact information to convince them that they had a binding oral contract with the defendants, according to the FTC’s complaint.

Consumers who ignored the bills or refused to pay received collection calls and dunning notices, often with added interest charges, late fees, and legal fees, as well as threats of collection agency referral, credit rating damage, and legal action, the FTC alleged. To make consumers believe third-party debt collectors were involved, the defendants created two debt collection companies, CC Recovery and M&A Recovery, which also made threats. The defendants’ threats convinced many consumers to pay the bills, the FTC alleged.

The FTC’s complaint alleges that the defendants violated the FTC Act by misrepresenting that they had a preexisting business relationship with consumers, that consumers had agreed to buy directory listings, and that consumers owed them money.

The defendants are Mohamad Khaled Kaddoura, Derek Cessford, and Aaron Kirby, and 15 companies they ran: Modern Technology Inc., also doing business as Online Local Yellow Pages; Strategic Advertisement Ltd., also d/b/a Local Business Yellow Pages; Dynamic Ad Corp., also d/b/a Yellow National Directory and Yellowpages Local Directory; Wisetak Inc., also d/b/a Online Public Yellow Pages and US Public Yellow Pages; Wisetak, Inc., also d/b/a Online Public Yellow Pages and US Public Yellow Pages; Internet Solutions LLC, also d/b/a Public Yellow Pages; Yellow Pages Express Inc., also d/b/a Yellow Pages Express; Yellow Pages Online Inc., also d/b/a Yellow Pages Online; CessTech Inc., also d/b/a Yellow US Pages; SEO Online Inc., also d/b/a Yellow Local Directory; SEO Online LLC; SEOOnline, also d/b/a Public Yellow Pages; SEM Pundits Inc., also d/b/a Yellow Pages Online; CC Recovery Corporation, also d/b/a CC Recovery; and M&A Recovery Inc., also d/b/a MA Recovery.

The FTC would like to thank the Canadian Anti-Fraud Centre; the Attorneys General of Illinois, Florida, New York, Nevada and Vermont; the Wisconsin Department of Agriculture, Trade and Consumer Protection; the Better Business Bureaus of Arkansas and of Chicago and Northern Illinois; and the Kahnawake Mohawk Peacekeepers for their valuable assistance with this matter.

The FTC also would like to acknowledge the Royal Canadian Mounted Police (RCMP news release in English and French) and the Centre of Operations Linked to Telemarketing Fraud (Project COLT) for their valuable assistance. Launched in 1998, Project COLT combats telemarketing-related crime, and includes members of the Royal Canadian Mounted Police, Sureté du Québec, Service de Police de la Ville de Montréal, Canada Border Services Agency, Competition Bureau of Canada, Canada Post, U.S. Department of Homeland Security (U.S. Immigration and Customs Enforcement and the U.S. Secret Service), the U.S. Postal Inspection Service, the Federal Trade Commission, and the Federal Bureau of Investigation. Since its inception, Project COLT has recovered $22 million for victims of telemarketing fraud.

To learn more about directory scams, read the FTC’s When Yellow Pages Invoices are Bogus and Throwing the Book at Business Directory Scams.

The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Frank Dorman
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Guy G. Ward
Bureau of Consumer Protection
312-960-5612

___________________________

Federal Trade Commission, Plaintiff, v. Modern Technology Inc., also doing business as Online Local Yellow Pages; Strategic Advertisement LTD., also doing business as Local Business Yellow Pages; Dynamic Ad Corp., also doing business as Yellow National Directory and Yellowpages Local Directory; Wisetak Inc., also doing business as Online Public Yellow Pages and US Public Yellow Pages; Wisetak, Inc, also doing business as Online Public Yellow Pages and US Public Yellow Pages; Internet Solutions, LLC, also doing business as Public Yellow Pages; Yellow Pages Express Inc., also doing business as Yellow Pages Express; Yellow Pages Online Inc., also doing business as Yellow Pages Online; Cesstech Inc., also doing business as Yellow US Pages; SEO Online Inc., also doing business as Yellow Local Directory; CC Recovery Corporation, also doing business as CC Recovery; M&A Recovery Inc., also doing business as MA Recovery; SEO Online, LLC; Seoonline, also doing business as Public Yellow Pages, Sem Pundits Inc., also doing business as Yellow Pages Online; Mohamad Khaled Kaddoura, also known as KAL; Derek Cessford; and Aaron Kirby, Defendants
( United States District Court for the Northern District of Illinois)

Case No. 13cv8257
FTC File No. 132 3144

November 19, 2013

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LinkedIn.com Job Scams

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Scammers Promise Easy Money in Trolling for LinkedIn Users

By Antone Gonsalves, CSO
November 25, 2013 09:51 AM ET

Antone Gonsalves of NETWORKWORLD.COM and other IT Security experts are LinkedIn4reporting on a growing problem with job posted on LinkedIn.com.

Accordingly, scammers have moved operation onto LinkedIn.com platform big time. Below is an excerpt which suggest that these scams are increasing at an accelerating rate.

CSO – Scammers exploiting the weak job market are looking for hapless victims on LinkedIn, which has become a major meeting site for job seekers and recruiters.

[Security experts warn against using LinkedIn Intro app for Apple iPhone]

Over the last year, swindlers promising employment have been spreading from Facebook and Twitter to LinkedIn, where their fake profiles have been popping up as fast as the site is able to take them down, Bianca Stanescu, security specialist for anti-virus vendor Bitdfender, said Friday.

While job scams are regularly found on Facebook, LinkedIn was considered less susceptible because of its professional clientele, Stanescu said. However, it seems that a LinkedIn profile with a picture of a pretty woman posing as a job recruiter and promising easy money is too hard for people, particularly men, to resist.

“It’s especially enticing for men to click on these ads to work with such beautiful human resource managers likes Christina and Annabelle,” Stanescu said. “We also found someone named Jessica.”

In a recent scam reported by Bitdefender, “Annabelle Erica,” a good-looking blonde, promised to put job applicants in touch with hundreds of companies looking for English translators.

Fake profiles that gather personal details and lead users to dangerous websites are spreading at a faster pace on LinkedIn. Amid research into the growing scams on the professional social network, antivirus software provider Bitdefender has detected a new virulent campaign that lures victims with exciting job offers from an attractive female recruiter.

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Crime Ring Recruited Short-Term Visa Holders

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International Fraud
Crime Ring Recruited Short-Term Visa Holders

 

10/25/13

 

The recruitment pitch to students on short-term visas must have seemed irresistible: give us your good name and some help in our fraud scheme, and we’ll put money—potentially thousands of dollars—in your wallet before your return trip home.

 

In charges unsealed late last month in San Diego, FBI agents and their law enforcement partners named dozens of young visa holders from former Soviet-bloc countries who took the bait and became willing co-conspirators in a range of elaborate fraud schemes. In four separate indictments, a federal grand jury laid bare how a Los Angeles-based Armenian crime ring ran scams in L.A. and San Diego that relied on a steady tide of accomplices whose time was short in the U.S. While the crimes themselves were not especially novel—identity theft, bank fraud, tax fraud—the explicit recruitment of co-conspirators with expiring visas was a twist.

 

“The J-1 visa holders are a commodity in these cases,” said Special Agent Davene Butler, who works in our San Diego Division. She described how a few masterminds enlisted young accomplices to do much of the legwork in their fraud schemes—opening bank accounts and securing apartments and post office boxes to route proceeds from bogus tax returns, for example. By the time a scam came to light, the “foot soldiers” holding J-1 and F-1 visas—which allow foreigners to study and travel in the U.S. for brief periods—would be long gone. “They were essential in the schemes,” Butler said.

 

The charges announced on September 26 named 55 individuals and followed a two-year investigation led by the San Diego FBI, local authorities, and the IRS, which paid out more than $7 million in bogus tax refunds. About half of those charged were arrested last month in a nationwide sweep, but more than 25 remain at large, including 24 who are believed to have left the country. The FBI is asking for the public’s help locating some of the suspects, including one of the crime ring’s main architects, Hovhannes Harutyunyan, 34, an Armenian whose last known address was in Burbank, California.

 

The charges show four primary schemes. Here’s how they worked:

 

  • Using stolen identities, the crime ring filed about 2,000 fraudulent tax returns claiming more than $20 million in refunds. J-1 students obtained addresses and bank accounts for the fraudulent refunds to be sent.
  • Conspirators set up bank accounts and began writing checks back and forth to create a good transaction history, which banks rewarded by shortening or eliminating holds on deposited checks. Then the so-called “seed” accounts wrote bad checks to 60 “bust-out” accounts, which paid out more than $680,000.
  • Conspirators obtained personal information about the identities and accounts of wealthy bank customers and disguised themselves as the account holders. They practiced forging documents and impersonating the account holders, and succeeded in obtaining $551,842. They laundered the money by purchasing gold with the stolen funds.
  • Conspirators obtained pre-paid debit cards in the names of identity theft victims and opened bank accounts in the names of visa holders who sold their account information before leaving the U.S. They then filed more than 400 fraudulent tax returns seeking more than $3 million.

 

“This investigation involved multiple complex fraudulent schemes resulting in significant losses to financial institutions and American taxpayers,” said San Diego FBI Special Agent in Charge Daphne Hearn.

 

Agent Butler said the charges and arrests send a message that these schemes are not without consequences. Those who have already fled won’t find it easy to get back to the U.S. “And they won’t be able to tell their friends that they can come to the U.S., commit fraud, get some quick cash, and that nothing will happen to them,” she said.

 

If you have any information about these cases, please contact the FBI at (858) 320-1800 or online at tips.fbi.gov.

Resource:

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Bestbuy, Target, Walmart Text Spammer Rentbro, Inc. Settle FTC Charges

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For Release: 09/17/2013
Text Spammers Settle FTC Charges They Illegally Sent Consumers Bogus Offers for “Free” Gift Cards

An affiliate marketing company and its two principals have agreed to settle Federal Trade Commission charges for allegedly sending out more than 42.5 million

Seal of the United States Federal Trade Commis...

Seal of the United States Federal Trade Commission. (Photo credit: Wikipedia)

unwanted and deceptive text messages to consumers. The case is part of the FTC’s continuing crackdown on spam text messages and the settlement prohibits the defendants from sending unwanted texts to consumers, and from misleading consumers about whether they have won gifts or prizes and whether a product is “free” or without cost or obligation.

“FTC action in cases like this one have dramatically reduced the amount of illegal text message spam, especially as it relates to bogus gift card offers” said FTC Midwest Region Director C. Steven Baker. “Not only are spam texts annoying and illegal, but they can also cost consumers money.”

According to the FTC’s complaint, Rentbro, Inc., and its principals, Daniel Pessin and Jacob Engel, residents of Ft. Lauderdale, sent deceptive text messages to millions of consumers telling them they had been selected to receive $1,000 gift cards to major retailers such as Best Buy, Target, and Walmart.

A typical message stated, “Your entry in our drawing WON you a FREE $1,000 Target Giftcard!  Enter “312” at http://www.target.com.tgrz.biz to claim it and we can ship it to you immediately!”

The hyperlink included in the text message brought consumers to a website the defendants created to reinforce the deceptive gift card message and then to a variety of third-party websites where consumers were asked to submit personal information under the guise of claiming their gift cards.  After collecting consumers’ personal information, consumers were told they had to sign up for more than a dozen risky trial offers, none of which was free, to qualify for the promised “free” gift card.

In addition to prohibiting the unlawful conduct, the stipulated order against the defendants requires them to turn over all of their remaining assets and imposes a partially suspended monetary judgment of $377,321, which is all of the money received in connection with the scam.

This case is the second settlement stemming from an FTC enforcement sweep initiated earlier this year against 29 defendants responsible for sending more than 180 million spam text messages.

The Commission’s vote authorizing staff to file the stipulated final order was 4-0. The FTC filed the stipulated final order for permanent injunction in the U.S. District Court for the Northern District of Illinois, Eastern Division. The District Court judge signed and approved the order on Sept. 13, 2013.

NOTE: Stipulated orders have the force of law when signed and approved by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Jay Mayfield
Office of Public Affairs
202-326-2181
STAFF CONTACT:
Joannie Wei
FTC Midwest Region
312-960-5607

NY A.G. Schneiderman Cracked Down On Fake Reviews

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Attorney General Schneiderman Announces Agreement With 19 Companies To Stop Writing Fake Online Reviews And Pay More Than $350,000 In Fines

“Operation Clean Turf” Concludes Year-Long Undercover Investigation Into Reputation Management Industry, Astroturfing And False Endorsements

Schneiderman: Astroturfing Is 21st Century’s False Advertising

NEW YORK — Attorney General Eric T. Schneiderman today announced that 19 companies had agreed to cease their practice of writing fake online reviews for businesses and to pay more than $350,000 in penalties. “Operation Clean Turf,” a year-long undercover investigation into the reputation management industry, the manipulation of consumer-review websites, and the practice of astroturfing, found that companies had flooded the Internet with fake consumer reviews on websites such as Yelp, Google Local, and CitySearch. In the course of the investigation, the Attorney General’s office found that many of these companies used techniques to hide their identities, such as creating fake online profiles on consumer review websites and paying freelance writers from as far away as the Philippines, Bangladesh and Eastern Europe for $1 to $10 per review. By producing fake reviews, these companies violated multiple state laws against false advertising and engaged in illegal and deceptive business practices.

“Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing,” Attorney General Schneiderman said. “This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution. And companies that continue to engage in these practices should take note: “Astroturfing” is the 21st century’s version of false advertising, and prosecutors have many tools at their disposal to put an end to it.”

Undercover Investigation of “Search Engine Optimization” Companies

In recent years, the reputation management industry has exploded as businesses have become increasingly concerned about their online reputations.  So-called search engine optimization (“SEO”) companies routinely offer online reputation management as part of their services.

Posing as the owner of a yogurt shop in Brooklyn, representatives from Attorney General Schneiderman’s office called the leading SEO companies in New York to request assistance in combating negative reviews on consumer-review websites.  During these calls, representatives from some of these companies offered to write fake reviews of the yogurt shop and post them on consumer-review websites such as Yelp.com, Google Local and Citysearch.com, as part of their reputation management services.

The investigation revealed that SEO companies were using advanced IP spoofing techniques to hide their identities, as well as setting up hundreds of bogus online profiles on consumer review websites to post the reviews.  The investigation found that many consumer-review websites have implemented filters to detect and filter or delete fake reviews, with Yelp’s being the most aggressive.

“More than 100 million visitors come to Yelp each month, making it critical that Yelp protect the integrity of its content,” said Aaron Schur, Yelp’s Senior Litigation Counsel. “We take many steps to do this, including the use of automated filtering software, leveraging our vast user community for tips about suspicious content, undercover sting operations, legal action, and cooperation with law enforcement. We applaud NY Attorney General Schneiderman for his willingness to tackle the issue of illegal fake reviews head on, and for his success in shutting down these operators. We look forward to continuing to cooperate with the New York Attorney General’s office and any other interested law enforcement office or regulator to protect consumers and business owners from efforts to mislead.”

Besides using their own employees to write and post the reviews, the companies hired freelance writers from as far away as the Philippines, Bangladesh and Eastern Europe for $1 to $10 per review.  One SEO company required that freelancers have an established Yelp account, more than 3 months old, with more than 15 reviews (at least half unfiltered), and 10 Yelp “friends,” as an attempt to avoid Yelp’s advanced review filter.

Attorney General Schneiderman’s office also discovered solicitations on sites such as Craigslist.com, Freelancer.com and oDesk.com to hire people to write fake reviews.  For example, one SEO company posted the following:

We need a person that can post multiple positive reviews on major REVIEW sites.  Example:  Google Maps, Yelp, CitySearch.  Must be from different IP addresses… So you must be able to have multiple IPs.  The reviews will be only few sentences long.  Need to have some understanding on how Yelp filters works.  Previous experience is a plus…just apply –)we are a marketing company.

In another example, a spa in New York City was looking for help writing fake reviews:

I need someone who is a YELP expert to post positive reviews for a spa that will not be filtered using legitimate existing yelp accounts must have at least 10 friends on Yelp.  Please be a yelp expert!!  I will pay $10 per-review after 3 days they must meet the criteria above.

In this example, a nightclub in New York City was looking for people to post the reviews “without getting flagged”:

Need Review Posters for Yelp, Citysearch, Google

Hello…We need someone to post 1-2 reviews daily on sites like: Yelp, Google reviews, Citysearch and any other similar sites.  We will supply the text/review.  You must be able to post these without getting flagged.  This will be a long term assignment that will last at least 3 months.  You are bidding per week.  We are offering $1.00 dollar for every post.  Thank you

Online Reputation Can Make Or Break a Business

Multiple studies conclude that online reviews can make or break companies.  According to one survey, 90% of consumers say that online reviews influence their buying decisions.  A highly-cited Harvard Business School study from 2011 estimated that a one-star rating increase on Yelp translated to an increase of 5% to 9% in revenues for a restaurant. Cornell researchers have found that a one-star swing in a hotel’s online ratings at sites like Travelocity and TripAdvisor is tied to an 11% sway in room rates, on average.  Gartner projects that by 2014, between 10% and 15% of social media reviews will be fake.

Nineteen SEO Companies and Small Businesses Entered into Assurances of Discontinuances

The OAG has entered into Assurances of Discontinuance with 19 companies, with penalties ranging from $2500 to just under $100,000.  The practice of preparing or disseminating a false or deceptive review that a reasonable consumer would believe to be a neutral, third-party review is a form of false advertising known as “astroturfing.”  Astroturfing is false and deceptive, and it violates, inter alia, New York Executive Law § 63(12), and New York General Business Law §§ 349 and 350.

The companies that agreed to discontinue their astroturfing practices and pay a penalty include:

  • Zamdel, Inc., d/b/a eBoxed, a search engine optimization company based in New York City, which posted more than 1,500 fake reviews of clients on consumer-review websites such as Yelp.com, Google Places, Yahoo! Local, Citysearch, Judy’s Book and InsiderPages.com.  eBoxed attempted to defeat consumer-review website filters by changing the IP address of the computer from which it posted the reviews every week, making the reviews look like they came from different users.
  • XVIO, Inc., another search engine optimization company based in New York city, which posted hundreds of fake reviews of clients on consumer-review websites.  XVIO also conducted a “secret shopper” campaign where its agents received free or discounted goods and services from XVIO’s clients in exchange for a review.  However, the reviewers were encouraged to post on consumer-review websites only if they were positive, the “secret shopper” did not disclose that he or she had received a free or discounted product or service of the reviewed-business in the review, and the client knew the identity of the “secret shopper” prior to providing the product or service to be reviewed.
  • Laser Cosmetica, the now-former owner of this well-known laser hair-removal business with multiple locations in the tri-state area orchestrated an astroturfing campaign, hiring an SEO company that posted fake reviews on consumer-review websites, and instructed employees and friends to write fake reviews on consumer-review websites.  They also offered discounts on services in exchange for online reviews, without requiring the customer to disclose the gift in the review.
  • US Coachways, Inc. The management of this leading national bus charter company based in Staten Island, NY orchestrated an astroturfing campaign, writing bogus reviews themselves, soliciting freelance writers from oDesk.com and Fiverr.com to write bogus reviews, and urging employees to pose as customers and write positive reviews.  They also offered $50 gift certificates to customers to write positive reviews without requiring that the customers disclose the gift in the review.
  • Swam Media Group, Inc. and Scores Media Group, LLC. The manager of this licensee of the Scores gentlemen’s club franchise orchestrated an astroturfing campaign with the help of a freelance writer that resulted in 175 fake reviews of entertainers at the Scores adult club in New York City and an affiliated website, scoreslive.com, most of which were posted online.

The entire list of companies that entered into Assurances of Discontinuance is:

  • A&E Wig Fashions, Inc. d/b/a A&E and NYS Surgery Center
  • A.H. Dental P.C. d/b/a Platinum Dental
  • Body Laser Spa Inc.
  • The Block Group, LLC, d/b/a Laser Cosmetica and LC MedSpa, LLC
  • Bread and Butter NY, LLC d/b/a La Pomme Nightclub and Events Space
  • Envision MT Corp.
  • iSEOiSEO
  • Medical Message Clinic and HerballYours.com
  • Metamorphosis Day Spa, Inc.
  • Outer Beauty, P.C., Lite Touch Plastic Surgery, P.C., Staten Island Special Surgery, P.C., Sans Pareil Surgical, PLLC
  • Stillwater Media Group
  • Swan Media Group, Inc. and Scores Media Group, LLC
  • US Coachways Limousine, Inc. and US Coachways, Inc.
  • Utilities International, Inc. d/b/a Main Street Host
  • The Web Empire, LLC
  • Webtools, LLC and Webtools Internet Solutions Ltd.
  • West Village Teeth Whitening Service, LLC; Magic Smile, Inc., aka Magic Smile
  • XVIO, Inc.
  • Zamdel, Inc. d/b/a eBoxed

The investigation was conducted by Assistant Attorneys General Clark Russell and Jordan Adler, and Investigator Vanessa Ip, in the Internet Bureau, with special assistance from Deputy Bureau Chief Susan Scharbach of the Real Estate Finance Bureau, under the supervision of Executive Deputy Attorney General of Economic Justice Karla G. Sanchez.

Source: Press Release

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Gallant Pharma International Inc. Indicated

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FOR IMMEDIATE RELEASE

August 7, 2013

ALEXANDRIA, Va. – Seven arrests have been made in a coordinated operation spanning several states, related to the unsealing of a 17-count indictment and criminal complaint involving Gallant Pharma International Inc., an allegedly unlicensed company that is accused of distributing misbranded prescription drugs from its headquarters in Crystal City, Virginia, and an office in Springfield, Virginia.  The individuals arrested were:

  • Syed “Farhan” Huda, 38, of Arlington, Virginia;
  • Deeba Mallick, 36, of Arlington, Virginia;
  • Anoushirvan R. Sarraf, 47, of Rockville, Maryland;
  • Talib Khan, 42, of Montreal, Canada, and Barbados;
  • Harvey Whitehead, 67, of Troy, Michigan;
  • Lisa Coroniti, 46, of Devon, Pennsylvania; and
  • Robert J. Sparks, 30, of Springfield, Virginia.

Munajj Rochelle, 36, a dual U.S.-Canadian citizen, is currently incarcerated in Montreal, Canada, on unrelated charges.  Arrest warrants have been issued for the remaining three defendants, Robert Wachna of Ottawa, Canada, Mirwaiss Aminzada, 43, of Montreal, Canada.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Antoinette V. Henry, Special Agent in Charge, FDA’s Office of Criminal Investigations, Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Service, and Special Agent in Charge John P. Torres, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) Washington, made the announcement after the four defendants arrested in the Eastern District of Virginia – Huda, Mallick, Sarraf, and Sparks – made their initial appearances before Judge John F. Anderson.

According to the 17-count indictment unsealed today, Khan and Huda were principals of Gallant Pharma, which allegedly began illegally importing prescription drugs, including intravenous chemotherapy drugs and injectable cosmetics, into the United States in or around August 2009.  Gallant Pharma represented itself as a “Canadian company” and told potential customers that it sold drugs from Canada.  The indictment alleges, however, that Khan, with the assistance of Huda, Mallick, Aminzada, and others, acquired drugs from other parts of the world, including India, Switzerland, and Turkey. These drugs were allegedly not manufactured and packaged in accordance with FDA requirements and, in some cases, were not approved by the FDA for use in the United States.  The indictment states that Gallant Pharma imported the drugs with the assistance of co-conspirators in Canada and the United Kingdom, including Aminzada, who broke large shipments into many small packages, mislabeled the contents of packages, and addressed deliveries to Dr. Sarraf at his medical practice in McLean, Virginia, in order to lessen scrutiny by Customs and Border Protection.  Initially, Gallant Pharma allegedly operated out of the apartment of Huda and his wife, Mallick, in Crystal City, where Huda is alleged to have served as the day-to-day head of Gallant Pharma in the United States and Mallick had primary responsibility for processing sales invoices and customer payments.  Until June 2013, Gallant Pharma allegedly stored the misbranded drugs at an office in Springfield, Virginia.

According to the indictment, Gallant Pharma was not licensed to distribute prescription drugs in the United States.  Nonetheless, Gallant Pharma is alleged to have sold drugs to doctors, hospitals, and medical practices across the United States, generating more than $8.6 million in revenue since August 2009.

Gallant Pharma allegedly employed a cadre of sales representatives with dedicated sales territories across the United States.

The defendants are charged with the following offenses: conspiracy to commit importation fraud, introduction of misbranded drugs into interstate commerce, unlicensed medical wholesaling, wire fraud, and to defraud the FDA, each of which is punishable by a maximum term of imprisonment of five years; importation contrary to law, which is punishable by a maximum term of imprisonment of twenty years; introduction of misbranded drugs into interstate commerce, which is punishable by a maximum term of imprisonment of three years; unlicensed medical wholesaling, which is punishable by a maximum term of imprisonment of three years; wire fraud, which is punishable by a maximum term of imprisonment of twenty years; and monetary transactions with criminally derived proceeds, which is punishable by a maximum term of imprisonment of ten years.

The investigation was conducted by FDA Office of Criminal Investigations, Drug Enforcement Agency Group 33 Diversion Task Force, Department of Homeland Security Office of Immigration and Customs Enforcement, the United States Postal Inspection Service, with assistance from the Arlington County Police Department.  Assistant United States Attorneys Lindsay A. Kelly, Alexander T.H. Nguyen, and Ryan K. Dickey are prosecuting the case on behalf of the United States.

Criminal indictments are only charges and not evidence of guilt.  A defendant is presumed to be innocent until and unless proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at
http://www.justice.gov/usao/vae.
Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at
http://www.vaed.uscourts.gov or on
https://pcl.uscourts.gov

Protecting Escrow Trust Accounts From Cyber-Hacking

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COMMISSIONER’S BULLETIN

DEPARTMENT OF CORPORATIONS
Supporting a Fair and Secure Financial Services Marketplace for all Californians
http://www.corp.ca.gov

Edmund G. Brown Jr., Governor
Jan Lynn Owen, California Corporations Commissioner

DATE: May 21, 2013

Commissioner’s Bulletin No. 002-13

Protecting Escrow Trust Accounts From Cyber-Hacking

You are being sent this urgent bulletin to alert you of the growing threat of cyber-hacking of escrow trust accounts.

The Department of Corporations has been informed of two escrow companies who were the victims of cyber-hacking this year, together losing an estimated $2,000,000 in trust funds. Both cases involved unauthorized wires to foreign bank accounts.
One company took extraordinary efforts to replace the funds and is still in business. The other company was not able to replace the funds and is currently in conservatorship. This is an important reminder that each escrow agent must be vigilant in protecting trust accounts.

Though the alleged cyber-hacking cases are still under investigation, a common issue appears to be malware and computer viruses infecting the computers. These viruses can copy keystrokes and obtain passwords, which are sent to cyber-hackers all over the world. In at least one case, it appears that the hacker took control of the escrow agent’s computer after the agent typed in a secure token number to access the trust account.

What You Can Do

Escrow companies’ paramount duty is to protect consumer funds by managing the trust accounts in a safe and sound manner. An important step in meeting that obligation is being proactive about understanding the protections offered by your bank. Escrow agents should thoroughly review security measures with the bank
and ask questions of their banker to ensure that they are using the most secure protections available.

Another protection suggested by bankers is to dedicate a single computer to be exclusively linked to trust accounts so that no other business occurs on that computer or through its Internet connection.

This practice makes it less likely that viruses will be caught by visiting questionable websites. Companies should also ensure that their computers are properly protected with up-to-date antivirus software.

Another important protection is ensuring you reconcile trust accounts promptly. All adjustments should be researched and corrected on at least a monthly basis. In the two incidents noted above, this was the ultimate factor in determining whether the company remained in business or not. Interest-bearing accounts must also be monitored.

Escrow agents should also consider insurance coverage for trust account losses due to cyber-hacking or other unauthorized access.

It is important to note that losses of this nature are not covered by Escrow Agent’s Fidelity Corporation (EAFC). Refer to Financial Code Section 17304 for the definition of losses covered by EAFC.

If a trust account shortage occurs, no matter the cause, you should immediately report it to the Department of Corporations and EAFC. Shortages must be immediately replaced.

An escrow agent will lose licensure if a trust account is not restored to its proper balance. Should you have any questions, please contact

Kathleen Partin,
Special Administrator for the Department’s Escrow Unit at (213) 576-7595.

Click to access 0002-13.pdf

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DDoS Attacked on Citizens Bank of Pennsylvania

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Citizens Bank of Pennsylvania is the latest bank to have experienced a Distributed Denial-of-Service (DDoS) citizen bank-PAattacks on yesterday August 8, 2013. The bank website was temporarily inaccessible to the public as they mitigated these attacks.

Unfortunately, these attacks against US Banks and other banks around the globe have been going on for a substantial amount of time as documented by Bank Information Security Group. The hacktivists group behind these attacks as reported is Izz ad-Din al-Qassam Cyber Fighters whose stated motives can be attributed to a movie trailer on YouTube that it deems offensive to Muslims.