9 Frightening Fraud Cases and Scary Cyber Scams
October 31, 2013 11:56 AM
1. The Living Dead
Identity fraudsters assuming deceased identities is so prevalent that in Britain, the government developed a weekly official list of people who have recently died, according to Scambusters.org. The list -- about 12,000 names a week -- is sent to credit-checking firms, as part of a crackdown on fraud and ID theft, which costs the government an estimated $3.5 billion per year.
2. Going on Tour
In Brooklyn, N.Y., a man answered numerous newspaper ads for rental apartments. Scambusters.org reported that at each one, he and an accomplice pull a gun on the owner or person showing the apartment, tie them up and rob them.
3. Spear-Phishing
The following instance has become so common that LinkedIn has a series of help pages to assist its users in spotting scams. A spear-phishing (targeted phishing) attack can hit the mailboxes of 10,000 LinkedIn users. According to Scambusters.org, the message will pretend to be from LinkedIn itself, and have an attachment supposedly containing a list of business contacts. The message claims the victim has requested this list, even spoofing an original email from them. It asks the victim to check the list "so we can close the support ticket" and is signed "[name delete], Technical Support Department." Opening the attachment installs spyware on the victim's PC, which then harvests user names, passwords and other personal details.
4. The cost of spamming
In 2008, an Iowa federal judge levied a charge of $236 million against an Arizona pair who were sending out hundreds of millions of spam messages per day, according to PC World. The volume got the attention of the nearby Internet service provider, which was suffering noticable bandwidth issues. The company sued the culprits and the judge awarded them $10 per bulk email from the spammers, for a total of $236 million.
5. A Cyber Trick, Not A Treat
Cybercriminals like to capitalize on the major holiday by sending fake Halloween e-cards, links to bogus games or phony video clips. According to Scambook, last year, a popular phishing scheme promised jack-o-lantern cut-out guides that instead downloaded a Trojan virus on victims computers. Additionally, the hackers could potentially gain access to vital personal information, such as a social security numbers.
6. Phantom Policies
Sometimes the policyholder is the victim of insurance fraud by the likes of James Lee Graff, who, according to BankRate, robbed some 30,000 people of more than $40 million in stolen health insurance premiums, leaving them to pay medical bills from their own pockets. The client pays the agent the premium, expecting the agent to forward it on to the company. But instead, the agent pockets the money and issues a fake policy that looks real. The client is left uncovered.
7. Arsonists Getting Greedy
Nicholas Di Puma of Walton, N.Y., torched his home and his convertible to collect on his homeowners and auto insurance. According to Bankrate, Di Puma said it all started when pans on his stove ignited. After trying to extinguish the inferno with a rag, Di Puma said he threw the first pan out the door, where it landed in the backseat of his convertible. While en route to tossing the second pan outside, he tripped and the pan landed on his couch. Unbelievable? That's what local law enforcement thought. He received five years of probation -- and no insurance benefits.
8. The Fake Slip-and-Fall Routine
One of the most notorious scammers, Isabel Parker, has prostrated herself in department stores, supermarkets and liquor stores 49 times for claims totaling $500,000 during her lifetime, according to Insurance Providers.
9. Pill Mills
Three examples of this prevalent ploy, as noted in Bankrate: Dr. Jorge Martinez, an Ohio pain management specialist, attempted to bilk insurers out of $60 million for narcotic drugs and expensive diagnostic tests he never performed. He fraudulently billed insurers for more than 100 patients a day for years. He's now serving life in prison. California medical clinic operator Tam Vu Pham paid more than 5,000 healthy people to consent to have surgeries performed on them so he could bill insurers more than $96 million. The $6 million in narcotics that flowed freely from the Wichita, Kan., pill mill run by Dr. Stephen Schneider led to 68 overdose deaths linked to insurer-paid prescriptions handed out by the doctor and his wife. The prescription for Dr. Schneider: 30 years in prison.
For more information on the costs of fraud and insurers expecting to see more this year, click here, and to read about a $100 million fraud ring exposing weaknesses in the U.S. crop insurance program click here.