Fraud in the News

Cybercrime is the new Wild West

Charges filed in U.S. District Court in Manhattan in two seemingly unrelated cases gives a small peek into the dark world of online crime, according to The New York Times article, The World Wide Web, the New Frontier in Fraud, by Peter J. Henning on July 27.

According to the article, in these cases, client information is swapped and the proceeds are sent over networks using new digital technology. What might tie them together is a suspected link to the hacking of JPMorgan Chase's network in 2014. The charges filed in the two cases make no mention of hacking into JPMorgan's network, and according to the article, it's unclear whether any of the bank's client contact information was used or sold. But there are hints at how defendants in one case might have used the information from the breach.

The article states that the security breach appears to have some connection to hackers operating in Russia. The Justice Department charged three men with securities fraud, identity theft and money-laundering conspiracy related to manipulation of penny stocks in 2011 and 2012, in pump-and-dump schemes.

According to the article, it might seem far-fetched that the JPMorgan breach figures into a penny-stock fraud. But the indictment accuses the three defendants of sending out spam that promoted the shares of various companies to generate buying interest, and this type of fraud needs a fresh supply of potential customers. Therefore, gaining access to the JPMorgan customer contact information could be valuable.

According to the article, while this might be just a coincidence, it shows the web of connections in the world of online crime and the challenges investigators face when they try to build cases.

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