Feds Round Up Suspects in Net Fraud Sweep

The Federal Bureau of Investigation and a handful of other law enforcement agencies have charged 125 people with a host of Internet-related crimes, ranging from identity theft and software piracy to auction fraud and hacking.

The FBI said those arrested so far in Operation Cyber Sweep are responsible for bilking at least 125,000 victims out of more than US$100 million in cash, services and products. The agency said the investigation began October 1st and will continue throughout the holiday season.

Attorney General John Ashcroft said the push, coming as it does on the heels of Operation E-Con, which saw 90 similar cases pursued earlier this year, is designed to underscore that the Web “should be a conduit for communication, information and commerce, not an expressway for crime.”

Top of the List

“Cybercrime is, and will continue to be, one of the FBI’s top priorities,” said FBI Assistant Director Jana Monroe. “As computers play a more prominent role in everyday society, we can expect criminals to continue to exploit vulnerabilities and utilize computers for illegal purposes.”

The latest round of arrests comes less than a week after the Business Software Alliance (BSA) warned that a survey it commissioned showed fears of cybercrime, such as credit-card theft, are holding back e-commerce growth. The BSA said a concerted effort is needed among law enforcement, the business community and consumers to stem the tide of online crime and make the Web safer for e-business.

Banner Year

Cybercrime has gotten a boatload of attention in 2003, which began with the SQL Slammer worm raking the worldwide Internet backbone in January and also saw a sharp spike in the amount of identity theft being reported to authorities.

The U.S. government is not the only entity interested in pursuing Internet criminals. In addition to an earlier sweep by the FBI and other agencies, Microsoft recently announced the establishment of a fund to pay bounties of up to $250,000 for information that leads to the arrest of hackers responsible for launching virus and worm attacks on the world’s Internet infrastructure.

“No single approach is going to work to curtail online crime,” Patrick Gray, director of forensics and emergency response at Internet Security Systems, told the E-Commerce Times. “Law enforcement has a role, but it’s only part of the puzzle.”

Gray added that investigators have made huge advances in their methods of pursuing those responsible for Internet-related crimes. “There’s better technology, better investigators and better cooperation,” he said. “There’s been a recognition that the need to get the bad guys outweighs whatever jurisdictional tensions there may have been in the past.”

Border Patrol

In fact, the FBI said it worked with a host of other agencies on Operation Cyber Sweep, including 34 states’ attorneys general, the U.S. Postal Inspection Service, the Secret Service and local agencies.

The cases reflect a range of online crimes, the FBI said, including fake escrow services on eBay and other auction sites, an Internet “fencing” operation in which stolen merchandise was unloaded via Web sales, and identity theft. One identity-theft ring alone was said to be responsible for 20 victims losing some $100,000.

One trend the FBI said it sees emerging is what it calls reshipping, in which illegal or fraudulent purchases are sent to a third party who then repackages and reships the items, often to overseas locations. The agency said it is seeing increased recruitment of reshippers, who often become fraud victims themselves, with their personal information used to obtain phony credit cards.

E-commerce has lost an estimated $500 million to date as a result of reshipping schemes, according to the FBI.

1 Comment

  • The Business Software Alliance is an interesting organization. Set up by software manufacturers, it in essence was designed to ensure they hold property rights and get paid for their efforts. There is nothing wrong with this. I went to their site for information to understand better who they were. This to me seem a reasonable thing to do. Only, two days later, the organization I worked for informed me, as I was the IT director, our internet provider had been approached by BSA. They claimed that there was a computer inside our office being used as a P2P server. They even went further to detail the precise software titles being offered. I thought to myself, what a coincidence. I was there merely to get information, and they did the same thing. To get my information I was probed. So much for being able to make my own moral decisions. The server was taken offline, permanently, and our ISP got off our back.
    All of this access of information by officials for official purposes is disconcerting. Perhaps in the end we are better off for it, but I’m not really convinced. I feel capable of making my responsible decisions without the strong arm of the law waving a sneaky glove at me.

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