Larceny and Fraud

• The legal definition of larceny contains five essential elements: – taking and – carrying away – personal property – of another – with the intent to deprive permanently

• Types of Credit Card Fraud– Stolen cards. Credit cards can be stolen in a variety of ways, such

as muggings, purse snatchings, and office and health club thefts.– Counterfeit credit cards. Counterfeit cards vary in quality from

those made on embossing machines stolen for companies that produce cards to those of obviously poor quality.

– Shave-and-paste schemes. Account number are shaved off one or more legitimate credit cards and replaced by new numbers.

– Fraudulent application. Individuals apply to several credit card companies, hoping that one or more will issue them credit cards.

• The major groups. The principal ethnic groups involved in illegal check fraud schemes include Nigerians, Asians (particular Vietnamese), Russians, Armenians, and Mexicans.

• The players. Despite the lack of a rigid hierarchy, members typically fall into one or several roles.– Leaders. Leaders of an organization generally have

an extensive criminal history and possess above-average intelligence.

– Check procurers. Check procurers obtain authentic checks, usually by stealing them while employed within a financial information on legitimate individuals.

– Check passers. Check passers actually negotiate stolen and counterfeit checks through the banking system and collect the proceeds to distribute to the group.

Check Fraud• Large-scale counterfeiting. The most notorious

groups engaged in large-scale counterfeiting operations are the Vietnamese triads operating out of Orange County, California.

• Identity assumption. Seen in various metropolitan areas, identity assumption schemes often involve Nigerian and Vietnamese criminal organizations.

• Payroll-check fraud. A variation of the identity assumption scheme involves placing group members within payroll-check processing companies.

Cloning Box

• Cloning is the unauthorized and illegal programming of cellular phones with access codes of legitimate customers– It allows criminals to obtain

cheap, mobile communications

– The are not traceable through traditional law enforcement methods

Proffessional Shop Lifting

• the groups usually operate in teams of two to six people. Some patterns include:– Use of a booster bag designed to defeat electronic

sensory security devices– Use the U.S. mail and UPS to ship stolen clothing to

specific locations for resale• Sell stolen clothing “on the street” or to countries in

South America• Use false identification when arrested• Use local motels as base of operations prior to re-sale

Shoplifters

• Shoplifters can be classified into two groups: – commercial shoplifters, or “boosters,” who steal

merchandise for resale and – pilferers who take merchandise for private use

• Reducing Shoplifting Losses– The retailing industry is increasingly taking steps

to reduce shoplifting losses, with techniques running from the simple to the sophisticated

Recovered Stolen Property

• Shoplifting groups use local motels or a base of operation to:– inventory– store and– package merchandise

Confidence Games

• The Pigeon Drop– This swindle is operated by two people who switch money

envelopes on an unsuspecting victim.• The Bank Examiner Scheme– The bank examiner scheme is one of the more sophisticated

con games and requires knowledge of the target bank. The con artist poses as a bank examiner to swindle a bank customer.

• Inheritance Scam– In this scam, the victim's phone rings and, on the other end, a

sweet-sounding person says, “You may be the recipient of a huge inheritance”

Confidence Games

• Three-Card Monte– This scam is similar to the traditional shell game.

The con artist uses “marked cards” to cheat a victim.

• C.O.D. Scam– The suspects usually pose as delivery employees.

After writing a phony mailing label, the suspect goes next door and asks the neighbor to accept a perishable package for the absent neighbor and to pay cash for COD charges.

Mail Fraud

• Free Vacation Scam– When a postcard or letter is received in the mail and/or an unexpected

phone call comes from an unknown company promising a complimentary vacation in an exotic spot, someone is probably trying to make the recipient the victim of the free vacation scam.

• 900 Telephone Number Schemes– There are swindlers who lure people to call a 900 number without giving

anything in return for their money. Such a call may even result in charges on a phone bill of $30 or more.

• Advance Fee Loan Schemes– The advance fee swindler claims to be able to obtain a loan for a

prospective borrower with ease from a legitimate lending institution, such as a bank or a savings and loan association. However, the swindler has no ability to secure a loan.

• Work-at-Home Schemes– Advertised opportunities to earn money by doing work at

home are frequently nothing more than fraudulent schemes and, at best, rarely result in any meaningful earnings.

• Home Improvement and Home Repair Frauds– A favorite trick of dishonest home repair firms is to mail a

brochure offering to do an expensive job for an unusually low price. Once the contract is signed, the homeowner learns why the price was so low. The firm never delivers the service which was paid for in advance.

White Collar Crime

• Defined as a crime committed by a person of respectability and high social status in the course of his or her occupation

Pyramid Sales Schemes• This is a marketing program by which people buy the right to sell

others the right to sell specific products• The promoters select the product. These may include:

– household items– cosmetics– safety devices

• The promoters sell large inventories to distributors with the added incentive of permitting the distributor to sell new distributorships

• The real profit earned primarily by recruiters developing new recruits who develop more recruits

• There is little or no concern given to direct sale of the products or services to the public

• Ultimately consumer distribution becomes a sham and acts as a cloak of respectability

Money Laundering

• Before spending or otherwise using any funds obtained from illegal sources, criminals must give the money an aura of legality. This conversion is known as laundering.– The Laundering of Money by Organized Crime. Organized

crime is an estimated $100 billion-a-year untaxed business operated by groups ranging from motorcycle gangs, to Asian drug triads, to the Italian Mafia.

– Domestic Laundries. Businesses such as restaurants, bars, and massage parlors, which take in a high proportion of cash, tend to be more desirable as laundries than businesses that receive most of their income as checks or other traceable instruments.

Money Laundering

– Foreign Laundries. Much of the money invested by organized crime in legitimate businesses in the United States is first routed through secret numbered bank accounts in countries such as Liechtenstein.

– Use of the Internet to Launder Money. One method of money laundering through the Internet is to establish a company offering services payable through the Internet.

– Internet Gambling. It seems that Internet gambling might be an ideal web-based “service” to serve as a cover for a money laundering scheme through the net.

Identity Theft

• Common ways thieves gather other person's identifying information include: – Dumpster Diving. Individuals or businesses that fails

to dispose properly of personal identification information, by shredding or mutilating, are susceptible to a "dumpster diver."

– This is essentially an individual who retrieves discarded material looking for anything of value.

– Mail Theft. Mail theft presents another way criminals obtain personal identification information.

– Internal Access. Internal access refers to an individual obtaining personal information illegally from a computer connected to a credit reporting bureau or to an employee accessing a company's database that contains personal identification information.

– Computerized Information and the Internet. With so much personal information obtainable in the networked world, thieves can access information easily.