Internet Fraud Investigation "Operation
Cyber Loss"
The FBI and Department of Justice
are joined by the National White Collar Crime Center (NW3C) today
to announce that criminal charges have been brought against approximately
90 individuals and companies as part of a nationwide series of
investigations into Internet fraud, code named "Operation
Cyber Loss," initiated by the Internet Fraud Complaint Center
(IFCC). Subjects are facing a variety of Federal and state criminal
charges which include fraud by wire, mail fraud, bank fraud,
money laundering, and intellectual property right violations.
The fraud schemes exposed as part of this Operation represent
over 56,000 victims who suffered cumulative losses in excess
of $117 million.
Among the fraud schemes targeted
are those involving on-line auction fraud, systemic non-delivery
of merchandise purchased over the Internet, credit/debit card
fraud, bank fraud, investment fraud, multi-level marketing and
Ponzi/Pyramid schemes. Internet fraud can be defined as any fraudulent
scheme in which one or more components of the Internet, such
as Web sites, chat rooms, and e-mail, play a significant role
in offering nonexistent goods or services to consumers, communicating
false or fraudulent representations about the schemes to consumers,
or transmitting victims' funds, access devices, or other items
of value to the control of the scheme's perpetrators. Many of
these cases were initiated as a result of fraud complaints the
IFCC received from individuals and businesses.
"Just as neighborhood watch programs keep watch over their
neighborhoods and report suspicious activity to law enforcement,
Internet users now have a 'cyber community watch' program. When
individual citizens, businesses, and consumer agencies work with
law enforcement at all levels, we help ensure the safety and
security of the Internet," said Attorney General Ashcroft.
Director Louis J. Freeh stated,
"The criminal charges being announced today demonstrate
the critically important role that the IFCC plays in combating
crime in cyber space. It is essential that law enforcement, e-commerce,
and victims of crime have this electronic clearinghouse to expeditiously
disseminate Internet fraud cases to the appropriate agency for
investigation."
The IFCC became operational on May 8, 2000. The IFCC's mission
is to address fraud committed over the Internet. For victims
of Internet fraud, the IFCC provides a convenient and easy way
to alert authorities of a suspected criminal or civil violation.
Victims of Internet crime are able to go directly to the IFCC
web-site at www.ifccfbi.gov,
to submit their complaint information, relieving considerable
frustration for them in trying to determine which law enforcement
agency should receive their complaint. For law enforcement and
regulatory agencies, the IFCC offers a central repository for
complaints related to Internet fraud. All complaints are sent
through an internal quality assurance process and are referred
to the appropriate law enforcement and regulatory agencies. The
IFCC uses the information to quantify fraud patterns, and provide
timely statistical data of current fraud trends. The IFCC, located
in Fairmont, WV, is a joint operation between the FBI and the
National White Collar Crime Center (NW3C). It is the first project
of its kind, a partnership between a federal law enforcement
agency, and a non-profit private organization, serving Federal,
state and local law enforcement agencies .
The accomplishments of this Operation
are a direct result of the close working relationship law enforcement
has developed with the private sector and e-commerce companies.
As an example, Pay Pal, Inc. and Motley Fool have provided great
assistance in identifying individuals engaged in wrong doing
and reported that to the IFCC. The support and cooperation provided
the FBI by other private sector companies such as Microsoft has
also been instrumental in the success of Operation Cyber Loss.
"As the IFCC continues to
expand its capabilities to better accommodate the needs of businesses,
it has begun the work of creating the appropriate channels that
will enable regular communication with representatives from the
private-industry across the nation," said West Virginia
State Auditor Glen B. Gainer III, chairman of the board of directors
for the National White Collar Crime Center.
These cases have been coordinated
by 28 FBI Field Offices along with participation by the U.S.
Postal Inspectors Service; the Internal Revenue Service-Criminal
Investigative Division; the Securities and Exchange Commission;
U.S. Customs Service, the Competition Bureau in Canada; and numerous
state and local law enforcement entities including the New York
City Police Department; New Jersey State Police; Salt Lake City
Police Department; Springville Police Department; Oregon High-Tech
Team, the Oregon State Attorney's General Office; College Station,
Texas, Police Department; Seattle Police Department; and the
Monroe, Washington, Police Department; Boca Raton, Florida, Police
Department; Florida State Comptrollers Office; Connecticut State
Police; Chula Vista, California, Police Department; El Paso,
Texas, Police Department; and the San Diego Police Department.
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