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The definition of karma: PayPal president's credit card gets hacked
If you've ever lost access to your PayPal holdings through no fault of your own -- say, following a shady money transfer -- you may be tempted to enjoy a little schadenfreude today. PayPal president David Marcus reports that someone used a skimming device to clone his credit card while he was in the UK, letting the perpetrator make a "ton" of fraudulent purchases. It's virtually the embodiment of karmic payback, isn't it? In fairness, the executive is right when he notes that the incident wouldn't have happened if the merchant accepted PayPal; the company would have masked the card number and rendered the skimmer useless. And we sincerely hope that Marcus' finances are back in order. All the same, the affair shows just why business leaders should be sympathetic to their customers' problems -- one day, they may be stuck in the same boat.
Taiwan prosecutes HTC's ex-lead designer for fraud and leak
Earlier today, the Taipei District Prosecutor's Office concluded its investigation on the HTC saga that mainly involved ex-lead designer Thomas Chien (pictured above). The report indicts the ex-VP for leaking HTC's upcoming icon designs -- likely from the yet-to-be-released Sense 6.0 -- by way of a presentation, which was shown to his then-future business partners for a new company they were forming together. There's no mention on whether the other party was tied to the Chinese government, as previously rumored, but the meeting was known to have taken place in Beijing back in June. The investigation also confirmed that Chien's naughty crew managed to rake in NT$33,566,000 or about US$1.12 million, in the form of false expense claims plus kickbacks from a supplier. In case you forgot, about a quarter of that cash was found inside Chien's Audi, with another quarter confiscated from him separately earlier. The prosecutors said while most other perpetrators have admitted to their wrongdoings, Chien continued to defend himself and remained in denial of some of his crimes. The court is therefore advised by the report to offer a heavy sentence for the traitor's "malignant" behavior.
Blizzard wins victory in legal battle over security breach
Blizzard has emerged (mostly) victorious in the case of Bell v. Blizzard Entertainment, which was filed in response to the Battle.net security breach last sumer. Though no financial data was taken, the lawsuit claimed the data breach harmed customers and targeted authenticators, which it said were required for players to have "even minimal protection for their sensitive personal, private, and financial data." From the beginning, Blizzard has said that the suit was without merit, and the court has dismissed 6 of the lawsuit's 8 claims, saying that the plaintiffs failed to to prove that they were harmed by the data breach and that Blizzard did not misrepresent its security practices. The part of the lawsuit that moves forward relates to Blizzard failing to fully disclose the importance of an authenticator to users, though Blizzard is certain to continue the fight. As in most legal battles, the situation is more complicated than can be explained in a couple of paragraphs: if you're interested in digging further, you can read the full text of the complaint or legal analysis by Mayer-Brown.
PayPal trials mugshot verification in UK stores
PayPal employees at the company's UK headquarters are tired of having to use traditional payment methods when buying their rocket and crayfish sarnies. It's almost an affront, in fact, so they're pushing local retailers in Richmond Upon Thames to trial an updated, entirely PayPal-based system that uses photo authentication to make things faster. If you want to try it, go to the "Local" section of your PayPal app (on iOS, Android or WP), which should show nearby participating shops, and simply select the one you're visiting -- this will then cause your name and profile picture to come up on the seller's app so they can verify you're the account holder and process the transaction. Having given it a quick armchair run-through, the system looks similar to what PayPal already offers in some Australian stores, and it's apparently PIN-free at the point of purchase -- although you'll obviously have had to authenticate your app when you installed it, as well as have uploaded a reasonably realistic (and preferably static) profile picture.
FTC reveals $50,000 Robocall Challenge winners, alarms Rachel from card services (video)
The FTC has managed to find two non-violent solutions to its Robocall Challenge, aimed at blocking auto-dialing telemarketers, thanks to winners Serdar Danis and Aaron Foss. The pair, who will receive $25,000 each, came up with variations on a system that would pre-screen calls before ringing your phone while allowing the FTC to blacklist known scammers at the same time. Google took a non-cash prize in a separate category with a scheme that would foil caller-ID spoofing often used by boiler rooms like the notorious "Rachel from card services" outfit, which has over a hundred numeric aliases. The FTC receives a whopping 200,000 complaints per month about the nuisance and screened nearly 800 submissions (see the More Coverage link), many of which show a certain, shall we say, passion for the topic. Check winner Foss' video submission after the break.
Former GameStop VP sentenced 51 months for embezzling over $1.7M
The Northern District Court of Texas sentenced Frank Christopher Olivera, the former VP of corporate communications and public affairs at GameStop, to 51 months in federal prison. Olivera, who pleaded guilty to embezzling over $1.7 million via mail fraud, was also fined $57,375 for funds unpaid on GameStop's loss, and a further $77,275 in restitution.According to federal documents, Olivera set up a fictitious Nevada-based company called Cloud Communications to send payments from GameStop to, across a period of July 2009 to April 2011. Olivera placed the payments in an account held by Cloud Communications, and then transferred the money to his personal bank account.
Curt Schilling asks judge to dismiss 38 Studios fraud lawsuit
Let's assume for a moment that you're Curt Schilling, formerly of the Red Sox and formerly of the now-defunct 38 Studios. You're facing a massive lawsuit for fraud regarding a $75 million loan from the state of Rhode Island. What do you do? It appears that Mr. Schilling's first approach is to ask the judge on the case to throw out the case entirely, claiming that the basis of the case is itself fraudulent. The crux of the lawsuit is the state's claim that Schilling and the 38 Studios board of directors willfully obfuscated the company's status from state lawmakers. Schilling has put forth that 38 Studios fully disclosed its status to the state investors on numerous occasion, providing them with an accurate picture of the company's financial situation. Due to this disclosure the allegations of fraud and obfuscation are simply not possible, hence the request for dismissal. Schilling goes on to claim that the entire suit is politically motivated and that the company's failure is chiefly due to Governor Lincoln Chafee not doing enough to save 38 Studios from bankruptcy.
Another former Olympus executive arrested in accounting scandal
As a dreaded accounting scandal continues to drag Olympus' name through the mud, federal agents in the United States arrested yet another gentleman in connection with the firm's alleged fraud. Chan Ming Fon, a citizen of Taiwan, was reportedly arrested in Los Angeles today. As the story goes, he was a former bank executive in the company, and he received some $10 million for his assistance in keeping nearly $2 billion in losses from surfacing. Preet Bharara, the United States attorney in Manhattan, said the following: "As alleged, Chan Ming Fon was handsomely paid to play an international shell game with hundreds of millions of dollars of assets in order to allow Olympus to keep a massive accounting fraud going for years." But hey, troubles aside, at least we've got an E-5 sequel coming next year! Distractions! Huzzah!
The War Z yanked from Steam, Valve apologizes
The brief and baffling run of The War Z on Steam is over... for now. Valve called the release of the title on its digital distribution platform a "mistake" and "premature" and has since removed it. "We apologize for this," the company said, "and have temporary removed the sale offering of the title until we have time to work with the developer and have confidence in a new build." The furor over The War Z's launch on Steam centered around its status as an early beta build and a list of misleading features on the Steam page that were either partially implemented or absent from the game altogether. Hammerpoint also issued a short statement saying, "We're making sure that our Store page is 100% correct. Bottom line: Our end goal is to have satisfied and not angry customers, so this is more important for us than everything else." Steam said that players who purchased it may choose to continue to play it or can get a refund.
The War Z launches to a flurry of fraud accusations
The release of The War Z on Steam earlier this week is causing quite a stir today in the MMO-verse. Some purchasers are accusing the game's developers of outright fraud, noting that the store page and the official site are claiming features that simply do not exist in the released version, such as the promise of large persistent worlds (the only map currently available is 75 square km compared to claims of 100-500 square km) and population viability (while the game's servers can supposedly host 100 people, players claim that they cannot host more than 50). Some of the complaints are subjective -- whether or not the true challenge in the game comes from zombies or other players -- but even the game's defenders admit that the title is still arguably in beta. It's currently the top seller on Steam, which is good news for Hammerpoint, but it also means that whatever the developers do next will be subject to some rather harsh scrutiny.
Trader charged with wire fraud after trying to buy $1 billion worth of AAPL
A fraudulent US$1 billion purchase of Apple stock has resulted in the arrest of a Wall Street trader and the loss of US$5 million for his brokerage firm. According to the District Attorney's office in Connecticut, trader David Miller of Rochdale Securities hatched a plan to use the brokerage's money to buy 1.625 million shares of Apple stock on October 25. Miller was hoping to cash in big on a rise in Apple's stock after the company reported its Q4 2012 financials later that afternoon. Miller's plan went awry when the stock fell and the brokerage started losing money. Miller allegedly tried to cover his tracks by falsely claiming he wanted to buy 1,652 shares for a customer, and accidentally entered the wrong amount. The brokerage was left holding the bag on 1.6 million shares of Apple stock and lost $5 million when it traded out of this position. Leading up to this billion dollar trade, Miller allegedly defrauded another broker-dealer by claiming to represent a company that he had no affiliation with and one for which he was not authorized to trade. Miller surrendered to the FBI this week and faces up to 20 years in prison. [Via MarketWatch]
FTC offers $50,000 prize for stopping illegal robocalls, we could have used this a few months ago
Robocalling is considered a plague in the modern phone world, especially during an election year -- and while you likely won't get rid of all the pitches from political candidates anytime soon, most of the commercial calls are outright illegal. The Federal Trade Commission has devised a unique contest to help cut back on those law-breakers without having to chase down every shady debt relief offer. It's offering a $50,000 reward for the cleverest solution to blocking the banned variety of robocalls. The only requirement is that you be an adult US resident: if you can invent a surefire remedy in your basement, the FTC wants to hear from you. Entries will be open between October 25th and January 17th, with word of a winner around April 1st. We're hoping that the champion has a truly effective cure in use before long, because we'll undoubtedly have reached our breaking point on robocalls by... oh, around November 6th. [Image credit: SarahNW, Flickr]
McAfee shows how major Android scamware ticks, prevents us from learning first-hand
Most Android malware lives in the margins, away from Google Play and the more reliable app shops. It's nonetheless a good idea to be on the lookout for rogue code, and McAfee has stepped in with thorough explanations of how one of the most common scamware strains, Android.FakeInstaller, works its sinister ways. The bait is typically a search-optimized fake app market or website; the apps themselves not only present a legitimate-looking front but include dynamic code to stymie any reverse engineering. Woe be to anyone who's tricked long enough to finish the installation, as the malware often sends text messages to expensive premium phone numbers or links target devices to botnets. The safeguard? McAfee would like you to sign up for its antivirus suite, but you can also keep a good head on your shoulders -- stick to trustworthy shops and look for dodgy behavior before anything reaches your device.
Former Olympus executives plead guilty in accounting fraud trial
Three executives from troubled imaging giant Olympus have pleaded guilty to artificially boosting the company's true value in 2007 and 2008 by concealing losses in financial statements. Former chairman Tsuyoshi Kikukawa, ex-auditor Hideo Yamada and former VP Hisashi Mori were charged with fraud in the scandal, which was brought to light last year by ex-CEO Michael Woodford. He was fired by the Olympus board for blowing the whistle, but reportedly received a large settlement for his troubles. The company has since confessed to cooking the books as far back as the '90s to hide investment losses, and revealed in 2011 that it had a billion dollars less in value than previously stated. That, along with the poor performance of its camera division, has forced Olympus to seek a partner or raise capital to survive.
Officers' Quarters: Five ways to spot scam guilds
Every Monday, Scott Andrews contributes Officers' Quarters, a column about the ins and outs of guild leadership. He is the author of The Guild Leader's Handbook. Internet scams are nothing new. They're as old as the Web itself. MMOs have opened up new channels for scammers to operate, and WoW is no exception. As we approach the launch of Mists, unscrupulous players may try to take advantage of the influx of players by setting up fake guilds. This week, one reader wants to share a scam story from her server in the hope that it won't happen to others. Let's take a look, and then examine how you can spot one of these scam guilds before it's too late. Greetings, The following was posted to our server forums. I was hoping that maybe, with names redacted, you might address this in a future officer's quarters: Edited by [name] on 9/6/12 4:22 PM (PDT) [Player 1], [Player 2] and how to scam Guildies and Maximize Profit. We all know by now the sad story of what happened to . According to legend, [Player 2], booted everyone from the guild, took everything out of the guild bank, leaving a lot of members confused and wondering about what happened to their guild and their friends. Blizzard did nothing. Fast forward to the present day, we have [Player 2] bragging about his exploits and his mount in general chat / trade, flaunting the results of his ill gotten wealth and guess what? Blizzard still does nothing. was a guild created by [Player 1], promising members fast progression and offering PVP, raiding and a stable community. Recruiting was fast and furious, with [Player 1] and his alts spamming general/trade all hours of the day, and baiting players of all levels to join what would be a huge guild with progression in every aspect of the game. Under that promise, the guild expanded fast, never quite achieving the kind of raiding success that would make it noteworthy in that category (3/8 HDS), but still sucessful enough to garner a sizable amount of members. All seemed well for a while.
Olympus reportedly in final talks for Sony investment
If the recent chapter in Olympus' history was a photo, it'd be a blurry thumb covering the subject's head. But, if reports from Nikkei are correct, it looks like the next one might be a happy family portrait. As suggested earlier this year, Sony is reportedly close to agreeing on a 50 billion yen (about $620 million) investment in the scandalized firm. This would likely give the Japanese electronics giant a 10 percent stake in Olympus, making it the largest single shareholder. This isn't the first time we've seen the troubled camera and optics brand associated with other electronics firms, and with Olympus telling Reuters that "This is not something that we have announced" we'll just have to wait and see exactly how this next frame develops.
Diablo III forces digital consumers to wait up to 72 hours to access full game
Chalk this up to another great moment in customer service history. With Diablo III's 1.0.3 patch came an interesting change that's hurting those who purchased the title as a digital download. Blizzard's made it so that only a small part of the game is accessible for up to 72 hours following its purchase, after which the rest of the game will unlock. Digital download customers are now restricted to the starter edition section of the game: part of Act 1, a level cap of 13, no auction house access, and limited interaction with other players. These restrictions do not apply to those who purchased the retail box of the game. A Blizzard employee explained the unlock delay in a forum post: "Outside of the issue that we fixed, digital purchases do require a review period before they kick over from Starter to Full editions. We apologize for the inconvenience, but it is a necessary step to combat fraud and other malicious activities that can weaken everyone's play experience. The delay is no longer than three days, and is often much quicker than that. Hang tight." This follows this morning's news that the South Korean government is twisting Blizzard's arm to make the studio issue refunds for dissatisfied customers. [Thanks to Marc for the tip!]
Konami and Autumn Games sued for fraud over $15 million Def Jam Rapstar loan
City National Bank has sued Konami and Autumn Games for millions over allegations of fraud. Courthouse News reports the bank hasn't received any return on a $15 million line of credit it approved to the defendants, and in court documents claims the financial conditions of Autumn and Konami "were false at the time they were made and that defendants never had any intention of repaying the loan as promised.""Rather than paying game-related proceeds directly to CNB as agreed, defendant have kept all game-related proceeds for themselves and have refused to remit any such proceeds to CNB."City National Bank is seeking over $8.9 million in damages for "fraud, negligent misrepresentation, breach of contract, breach of covenant of good faith and fair dealing, money had and received, unjust enrichment, recovery of personal property, and punitive damages."This isn't the first lawsuit the game has spawned. In March, EMI Music Group filed suit against Def Jam Rapstar creators 4mm Games and Terminal Reality, claiming the game contains unlicensed tracks by several artists.
Examining an iTunes Store account hack
ZDNet has a long report on a recently hacked iTunes account that involved a linked PayPal account. We've seen an increase in the number of hacked iTunes accounts in which people's gift card balance or linked accounts have been mysteriously drained. This report, like many others, leaves us wondering how the hack occurred. Is it a flaw in iTunes that's giving hackers access to accounts, does the user have an insecure password or did the user fall for a phishing scheme that somehow exposed their password? The good news in the ZDNet report is that PayPal already reversed the charges for five of the seven fraudulent transactions. This incident should be a warning for iTunes users -- you still need to guard your iTunes account password closely and you should choose a payment method that lets you easily reverse an unauthorized charge.
FCC thinks ISPs should do a better job preventing fraud, theft
Internet fraud and theft are major problems, there seems to be little doubt about that -- according to FCC chairman Julius Genachowski, some 8.4 million credit card numbers are stolen every year. The question, then, is who should be addressing the issue. Genachowski this week called for "smart, practical, voluntary solutions," asking internet service providers to put more effort into helping prevent data theft, hacks and other issues, or risk having "consumers lose trust in the internet," thereby "suppress[ing] broadband adoption and online commerce and communication." The chairman asked ISPs to help avoid hijacking through more efficient traffic routes and to instate DNSSEC to help weed out fraudulent sites.
