Phishing, Hawala, and Other Fraudulent Schemes

This FBI Fraud Alert notice is posted in banks around the nation. It lists several Red Flags which strongly indicate that someone is attempting to commit fraud using unsuspecting persons. Image Credit: C J Oakes, CriminalJusticeLaw.org

Fraud schemes are nothing new. Among the most common fraud schemes involve false invoices. In 2008, the bursting of the housing bubble brought into international focus fraud schemes involving major banks and similar financial institutions. In addition, the Internet has facilitated both old and new fraud schemes, giving rise to a new term, Phishing.

In one 2016 case, 56 persons were charged in a scheme which raked in more than $300 million USD. And those were just the start. International police continue seeking others who were involved in this multi-national fraud and phishing scheme.





Criminals today are taking fraud schemes to new levels. With the ability to pull various kinds of seemingly disconnected data into coherent groupings, criminals are able to take advantage of many. Some schemes are so sophisticated that even people on the alert often find themselves losing savings and more.

Following are four of the most common fraud and phishing schemes hitting businesses and consumers today.

  1. Utility Telephone Scam
  2. Fraudulent Toner Invoicing
  3. Microsoft” Tech Support Scam
  4. Hawala Transfer Scheme

1 Utility Telephone Scam

This is a scam that has been around since the advent of utilities, but with the ability to gather information like never before, criminals are able to get enough information relating to the utility, utility holder, account, and other bits of information that when they phone you, the “overdue” bill sounds legitimate enough. Most such scammers will identify themselves by name and will sound so realistic that many simply provide their credit/debit card info or check by phone without much thought. It is only later when the true overdue utility bill arrives that the victim realizes they have been scammed.

English: A generic (no language) graph of phis...
English: A generic (no language) graph of phishing attempts and phishing websites from January 2008 to December 2009 (Photo credit: Wikipedia)

The best way to avoid this scam is to first, be aware of due dates and second, note the phone number from which the person is calling. Hang up, then call your utility on the number provided on your bill (or look in the phone book). If it turns out to be true, pay your bill, but if not, provide the company with the phone number you were called from. Then notify the police and the Better Business Bureau (BBB).



2 Fraudulent Toner Invoicing

From time to time, criminals come up with ways to bill large companies for items they never contracted for. The latest, which has been happening for a few decades, is billing for toner cartridges. The reason is simple: The average business goes through a lot of toner, so regular invoices are seldom given a second thought. The only thing that makes this different is that the criminals doing this are today able to make their invoices appear far more legitimate because of phishing. Two of the most common “vendors” perpetrating this scheme today call themselves…

  • Central Supply Center, P.O. Box 4698, Orange, California, 92863
  • Unified Distribution, 1315 N. Tustin, Suite #332, Orange, California 92867

The best way to protect your company from toner scams is to always require a signed receipt from the service person when replacing toner in your copiers then match these perfectly to invoices received. If even a single digit is off, call the service company you deal with locally, not the one on the received receipt. These scammers are becoming much more sophisticated than in times past so you must be careful.

“Microsoft” Tech Support Scam

This scam is a phishing scheme. The object is to take over your computer(s) long enough for hackers to add specialized malware to the system. Then, over time the phishers collect data to be sold or used at a later date.

English: Chart I made for the Phishing article...
English: Chart I made for the Phishing article that uses data from Anti-Phishing Working Group that was taken from the website on August 5, 2005 (Photo credit: Wikipedia)

The way this works is that a phone call will be received by someone from “Microsoft tech support.” They will then explain that some kind of virus or other problem has been detected with your systems and offer to eliminate the problem. They then take you through steps to resolve the issue before it causes you disruptions in your business. One of these steps will involve giving them temporary control of your computer. During this time, malware will be installed. Now criminals will have access to anything you input.

The solution to this scheme is simple: MICROSOFT NEVER SOLICITS ANYONE BY PHONE. Unless you initiated the call to a support center of some kind, do not yield control of your computer. If you are asked for payment of any kind or identifying information, consider this a big red flag.

3 Be Aware of Red Flags

Perhaps one of the biggest red flags when dealing with scammers is the fact that a person will often have a feeling that something is not quite right with the scheme. But because global criminal organizations are becoming so much more sophisticated, such feelings are often not present. Many such schemes appear so legitimate that people simply provide what is needed.

In short, just be aware that unless you initiated the action, unless you can match up invoices perfectly to services you know were rendered, unless you know you are over due on a bill, question the activity. If it is legitimate, you can find out yourself through proper channels and the company with which you are doing business will understand. If you meet with resistance for wanting to check something or someone out, chances are, there is a problem. Beware, you may have a phishing or fraudulent invoicing scheme at play.

4 Hawala Transfer Scheme

The Hawala Transfer Scheme is a debit card purchase/wire transfer scheme. It is one of the most complex, yet easily identified fraud schemes going today. As with most fraud scams/schemes greed is the underlying factor which makes it work.

The 56 U.S. individuals arrested by the FBI in late-2016 were involved in a Hawala scheme. In fact, because of limited jurisdiction, the perpetrators of the Hawala Scheme escaped justice for now. Thirty-two of those involved in the scheme are located in India and U.S. authorities are working with the Indian government to arrest and prosecute them in America. However, the exact depth of the scheme is not known.

Hawala Transfer Schemes or variations are used by criminal organizations worldwide.

There are a variety of methods employed, but essentially each Hawala scheme involves a system of fund transfers.

This FBI Fraud Alert notice is posted in banks around the nation. It lists several Red Flags which strongly indicate that someone is attempting to commit fraud using unsuspecting persons. Image Credit: C J Oakes, CriminalJusticeLaw.org
This FBI Fraud Alert notice is posted in banks around the nation. It lists several Red Flags which strongly indicate that someone is attempting to commit fraud using unsuspecting persons. Image Credit: C J Oakes, CriminalJusticeLaw.org

For instance, the con artist/schemer/scammer may contact a person on Craigslist, offering to buy an item for sale. However, there is a problem. In order to complete the purchase, they need banking information in order to wire the payment to your account. However, the payment to be wired will be in excess of the agreed price and it will be necessary to transfer the balance back to them via another means, often PayPal.

Another such transfer scheme going around involves services. Phishers find someone offering a service, such as web development or something similar. The exact service does not matter. In the end, they will offer to pay your bank account directly, but alas, there will be an overpayment involved. Again, you will be asked to forward the balance.

What is going on in Wire Transfer Schemes?

What is happening with wire tranfer schemes/Hawala Tranfer Schemes is that another unsuspecting person is usually either being conned into providing funds (or banking information) or extorted into doing so. You will never know this person.

English: French email account phishing attempt.
English: French email account phishing attempt. (Photo credit: Wikipedia). Even if one cannot read French, notice the origin of the email…@live.co.uk. Generic email addresses are NEVER used by creditor businesses. These may be used by individuals operating a website or business from home (such as with CriminalJusticeLaw.org), but if a company solicits money for any reason, it should have a proper domain attached to the email account for legal verification purposes. The company may be legit, but better safe than sorry, yes?

Likely, the 56 arrested in the United States recently did not know those who were defrauded and never had any contact with them directly. Instead, a third party, often working in a call center in another country initiated the contact.

In essence, all parties to the crime are compartmentalized; that is, no one knows the full scope of the scheme–they are either just doing their job or have been duped into easy money.

As shown in the FBI Fraud Alert image found in a U.S. Bank, there are several things which scammers often do to get others involved in their scheme. Taken alone, most elements seem ok, but taken together, fraud is almost certainly at play. These are:

  • Internet sale made by check
  • Check made out for more than requested in the sale
  • Check was sent overnight
  • The only communication was via email
  • Check drawn on a different account than the person making the purchase
  • Is the result of winning a “Lottery” not entered
  • A return wire transfer is requested
  • Earning a “commission” for handling transfers
  • Received an email asking to confirm or otherwise provide account information with a legitimate institution.

On this last item, be on alert.

Your bank or credit card company will NEVER ask you to verbally verify account information. In fact, no legitimate company will do so. If they do not have your account number or identifying information already, they are not legit.

Modern patent scam
Modern patent scam (Photo credit: Wikipedia)

Phishing schemes often send spam emails that look very similar to legitimate emails. Look at the address line. If it is from anything other than the proper domain for the named institution, it is a fraud attempt. The best way to avoid being a victim of fraud schemes is to make others verify information. A legitimate company will not have a problem with this. If someone balks at the idea of you checking them out before working with them over the phone, hang up.

“I once had a supposed creditor call me requesting payment. I remembered paying off the account, but had lost the records. The company insisted I had paid nothing and had to come up with a few hundred dollars in order to avoid criminal prosecution.

That was the first sign of fraud–in the United States, a person cannot be charged criminally for being unable to pay a debt unless it is first proven in court that the debt was fraudulently entered into.

Then, they insisted I provide them with my current address and Social Security number ‘for verification of the account.’

Second red flag. I politely informed them that they should already have that information. So I asked for the proper name of the company and their address. After giving it, I looked them up online using the BBB website for the stated city. Nothing. No information about the supposed company.

I then informed them that I would get in touch with the DA for the city and answer to any possible criminal charges pending. Then I asked for a return phone number and operator ID, informing them they could call me in a few days after I had spoken with the authorities. They gave a number and hung up. I called the number back and received a generic mail box recording. I never heard from them again.” – C J Oakes

And always remember this: Con artists prey on greed.

Con artists use greed to entice people into their scheme. In fact, it has been said that an honest person cannot be conned. The modern schemers and scammers are no different. They often make it sound as if a person can get something for nothing; a big payout for little effort. Regardless of the pitch, the best way to avoid criminal involvement in Hawala Transfer Schemes and other common scams is to not be greedy.




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