fraud
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SEC charges third 'mastermind' in ICO fraud case
The SEC is clearly determined to crack down on everyone involved in Centra Tech's allegedly fraudulent initial coin offering. Officials have filed fraud charges against a third "mastermind" in the case, Raymond Trapani, for reportedly helping to whip up false claims about the $32 million ICO and manipulate trading to keep the offering's price up. As evidence, the SEC trotted out a group text message where Trapani reportedly told Centra's Sohrab Sharma to "cook me up" a fake document while trying to get the company's tokens listed on an exchange using bogus credentials.
Theranos’ video game stars the reporter who exposed the company
Last week, Business Insider reported that employees of the troubled startup Theranos had created a Space Invaders-style video game featuring the Wall Street Journal's John Carreyrou as a target. Carreyrou began reporting on the company in 2015 and revealed that Theranos was misleading investors about its technology. Theranos and CEO Elizabeth Holmes said the company could test just a small drop of blood for a number of diseases -- claims the company was never able to back up and eventually led to massive financial troubles, employee layoffs and fraud charges from the SEC. Today, Business Insider shared a video of employees playing the video game at the company.
Former FCC broadband advisor arrested on $250 million fraud charges
A former broadband advisor picked by the Federal Communications Commission (FCC) to push high-speed internet access in rural areas has been arrested on multi-million dollar fraud charges. It is alleged that during her time with Alaska-based fiber optic cable provider Quintillion, former CEO Elizabeth Pierce raised more than $250 million from investment firms in New York using forged contracts from other companies. By using bogus documents, she convinced other investors that Quintillion had already secured backing from elsewhere, leading them to believe their investment was stronger than it actually was.
Hulu snags documentary series on the Fyre Festival fiasco
Last year's ill-fated Fyre Festival (almost) took place in the Bahamas; it also ended up with seven fraud and negligence class-action lawsuits. Co-founder Billy McFarland (above), who co-created the festival with rapper Ja Rule, was also arrested and charged with wire fraud. He ultimately pled guilty to misleading investors. Now Hulu has picked up a multi-part documentary series about the debacle, which is being jointly developed by Billboard, Mic and production company The Cinemart.
SEC charges two individuals with fraud in continuing ICO investigation
The SEC has charged two individuals for what it alleges was a fraudulent initial coin offering (ICO) that raised over $32 million last year. Sohrab Sharma and Robert Farkas co-founded Centra Tech Inc. and the SEC says the company sold unregistered investments through a token. Sharma and Farkas are said to have told potential investors that the company was working on a Visa and MasterCard-backed debit card that would convert cryptocurrencies into US dollars, but the SEC alleges Centra was not actually working with either of those companies. Additionally, the co-founders made up executives with impressive backgrounds and shared misleading information on the company's website.
Facebook and Cambridge Analytica hit with first state lawsuit
Facebook and Cambridge Analytica are already dealing with numerous private lawsuits over non-consensual data sharing, but they now have to grapple with a state-level lawsuit. Illinois' Cook County has filed a lawsuit against both companies accusing them of violating the state's Consumer Fraud and Deceptive Business Practices Act. Cambridge Analytica allegedly broke the law by misrepresenting its "thisisyourdigitallife" app as an academic research tool when it was really meant to harvest personal data against Facebook's agreements. Facebook, meanwhile, was accused of falsely promising to protect user data and doing nothing to stop Cambridge Analytica for years after learning of its behavior.
SEC charges Theranos and CEO Elizabeth Holmes with ‘massive fraud’
The SEC has charged Theranos, Elizabeth Holmes and Ramesh "Sunny" Balwani with fraud relating to the startup's fundraising activities. The company, as well as CEO Holmes and former president Balwani are said to have raised more than $700 million from investors through "an elaborate, years-long fraud." This involved making "false statements about the company's technology, business and financial performance."
US carriers testing replacement for two-factor authentication
Major US cell phone carriers are working on a mobile authentication system that could create a new open standard. Under the banner of the Mobile Authentication Taskforce, AT&T, Sprint, T-Mobile and Verizon say they have a solution which could roll out before the end of the year: next-generation, multi-factor mobile authentication (hopefully they'll come up with a snappier name for it before launch), which is intended to provide better security than the two-factor authentication we've become accustomed to (and which is not without its flaws).
US busts $530 million Infraud cybercrime ring
The US just took down one of the larger online crime organizations in recent memory -- certainly one of the largest prosecuted by the feds. Department of Justice officials have filed charges against 36 people allegedly involved with Infraud Organization (no really, that's the name), a global cybercrime ring with roots in the US as well as numerous other countries. Combined, the group is believed to have trafficked in stolen financial data (including up to 4 million cards), identities and contraband worth over $530 million in losses. And that's what they actually managed to accomplish. Reportedly, they hoped to inflict a total of $2.2 billion in damage.
New York AG will investigate firm selling fake followers to stars
Twitter bots are bad enough by themselves, but it's worse when they're built using real info -- and New York wants to clamp down. State Attorney General Eric Schneiderman has opened an investigation into Devumi, a company that sold over 3.5 million fake social network followers (primarily on Twitter) to celebrities and politicians. While bots by themselves aren't automatically illegal, the company also offered "at least" 55,000 accounts using the personal details of real people, some of whom live in New York. That's "impersonation and deception," Schneiderman said, and it's made all the worse when some of those people aren't legal adults.
US charges cryptocurrency creators over $6 million scam
US regulators are making good on their promise to get tough on crypto fraud. The Commodity Futures Trading Commission has filed complaints charging My Big Coin Pay and two of its operators, Randall Crater and Mark Gillespie, with using the company's My Big Coin cryptocurrency as part of an ongoing, not-so-subtle Ponzi scheme. Crater and Gillespie allegedly drew investments in the virtual money by making numerous bogus claims (that it was traded on multiple exchanges, backed by gold and had a MasterCard partnership) and promptly "misappropriated" the $6 million in funds for buying a home, jewelry, vacations and other indulgences.
US government will investigate fake net neutrality comments
In December, a number of US Representatives sent a letter to the Government Accountability Office (GAO) asking it to investigate fraudulent comments submitted to the FCC's proposal to repeal net neutrality. Multiple groups found evidence that millions of the comments submitted during the FCC's public comment period were linked to fake email addresses, were fraudulently posted under others' names and addresses and were even attributed to people known to be dead. Congressional leaders, attorneys general and even FCC commissioners called for the FCC to delay its vote on the proposal while the extent of the fake comments could be properly investigated, though as we well know, the FCC went ahead with the vote anyway. Now, Ars Technica reports, the GAO has agreed to investigate the issue.
OnePlus halts credit card payments on its site after fraud reports
This weekend, reports began to surface that some people who had made purchases on OnePlus' website were seeing unauthorized transactions pop up on their credit cards. OnePlus released a statement on its website saying that it was looking into the issue and today in an update, the company said it's shutting down credit card payments on its site. "This is a serious issue and we are investigating around the clock. As a precaution, we are temporarily disabling credit card payments at oneplus.net," it said. "PayPal is still available, and we are exploring alternative secure payment options with our service providers."
Attorneys general request last-minute delay for net neutrality vote
The FCC's controversial vote on net neutrality protections is scheduled to take place tomorrow, and as we get down to the wire, opposition to the proposal hasn't slowed. Today, 18 state attorneys general sent a letter to the FCC asking for the commission to delay the vote, The Verge reports. Their plea centers on evidence that fake comments that used real individuals' names were submitted during the FCC's public comment period. "A careful review of the publicly available information revealed a pattern of fake submissions using the names of real people. In fact, there may be over one million fake submissions from across the country," they wrote. "This is akin to identity theft on a massive scale – and theft of someone's voice in a democracy is particularly concerning."
Representatives ask GAO to investigate FCC net neutrality comments
It's not just senators calling for a review of the FCC's millions of fake anti-net neutrality comments. Representatives Elijah Cummings, Greg Meeks and Frank Pallone have sent a letter to the Government Accountability Office asking it to investigate the comments. They want to know the extent of the fakery, which would violate laws barring fraudulent representation in any subject under the executive branch's oversight. And crucially, they also want a look at the FCC's response -- they're "concerned" that it stonewalled New York's investigation by withholding information (at least, until very recently).
Senators ask the FCC to delay its net neutrality vote (updated)
A group of senators has sent a letter to the FCC asking the commission to delay its December 14th vote on proposed net neutrality protection rollbacks, The Hill reports. Led by Senator Maggie Hassan, 28 senators signed the letter, which pointed to evidence that the proposal's public comments were rife with fraudulent posts. "A free and open internet is vital to ensuring a level playing field online, and we believe that your proposed action may be based on an incomplete understanding of the public record in this proceeding," they wrote. "In fact, there is good reason to believe that the record may be replete with fake or fraudulent comments, suggesting that your proposal is fundamentally flawed."
SEC Cyber Unit's first charges target cryptocurrency fraud
The Securities and Exchange Commission's new Cyber Unit has filed its first charges since being formed in September. The unit's case is being brought against a company called PlexCorps, its founder Dominic Lacroix and his partner Sabrina Paradis-Royer and the SEC claims that Lacroix and Paradis-Royer were actively defrauding investors. PlexCorps was engaged in an initial coin offering (ICO) -- which was selling securities called PlexCoin -- that had already raised around $15 million since August and it was fraudulently promising that investors would see a 13-fold profit in just under one month. The SEC obtained an emergency asset freeze to halt the ICO.
Airbnb is reportedly being used to launder money
Criminals have long been exploiting online marketplaces for money laundering purposes, and the latest service to reportedly fall prey to fraudsters is Airbnb. According to a Daily Beast report, Russian scammers are leveraging the service to launder dirty cash from stolen credit cards with the help of corrupt hosts. The fraudsters are recruiting for their Airbnb abuses on Russian-language crime forums, with posts seeking everything from collaborators to hacked accounts.
AI’s latest application: wasting email scammers’ time
Schadenfreude is one of life's simplest pleasures -- especially when the victim in question is an email scammer. That's the service Netsafe's Re:scam provides. Simply forward your Nigerian prince emails to the service and it'll use machine learning to generate conversations to waste the nefarious Nancy's time. The idea is that any time jerks spend engaging with the bots is time that can't be used to target hapless victims. People have passed some 6,000 emails Re:scam's way this week alone, and apparently there were 1,000 concurrent conversations at one point. So far the longest email chain has involved 20 exchanges, according to The Guardian.
Steam's curator update tackles shady review key requests
Steam's curator program will be getting a makeover this fall as Valve takes steps to make the system more effective for both gamers and developers. Under the banner "Curator Connect," players will now see their favorite curators' recommendations show up in other parts of the Steam Store, as well as their home page. Curators will also be able to embed videos in their reviews, create lists from reviews they've already written, have more control over their home page and get their hands on more data showing the impact their reviews have on their followers' buying habits.
