Theft Online

Fraudulent Schemes and Theft Online

Overview of Fraudulent Schemes and Theft Online in relation to cyber crime: [1]Credit card fraud typically occurs online after cybercriminals establish or otherwise gain access to a financial account. Then, while using false identification or pretending to be someone else, they will make purchases for goods and services in the name of this other person who may or may not actually exist. On October 18, 2005, a federal grand jury in Cleveland, Ohio, indicted Kenneth J. Flury, age 41, with bank fraud in connection with his scheme to defraud CitiBank. In this case Flury allegedly stole CitiBank debit card account numbers, personal identification numbers (PINs), and confidential account information of real account holders. Flury then fraudulently encoded this information onto blank ATM cards and used the cards to make cash advances at ATMs in the Cleveland area exceeding $384,000. Flury wire transferred about $167,000 of the stolen money via Western Union to other cybercriminals who provided the stolen financial account information from CitiBank branch offices located in Europe and Asia. Mr. Flury was among 19 co-defendants indicted by the U.S. government, a result of the so-called ”Shadowcrew” investigation conducted by the U.S. Secret Service. He subsequently pled guilty to conspiracy in connection with his activities. As a moderator and administrator of the group’s Shadowcrew Web site, Flury pled guilty to conspiracy. He was sentenced to 32 months in federal prison and fined a total of $300,000. The United States v. Flurry case demonstrated a technique known as ”carding,” which involves making fraudulent debit or credit cards.

Once fake bank cards are made, fraudsters will use them along with financial account numbers to purchase things in person or online, although online purchases are preferred so that they cannot later be physically identified by witnesses in the event of a police investigation. Sometimes fraudsters will have merchandise delivered to locations they know are safe. Larger reputable online merchandising firms prevent this form of fraud by building in database purchasing rules that match credit card numbers being used to purchase goods with other account information such as the cardholder’s name, address and account password. This information is often used along with the card’s three or four digit security code to help assure that a credit card being used for an online purchase is actually in the possession of a person authorized to make the charge. To overcome fraud prevention checks, attackers often seek and acquire additional information about accounts and authorized card holders. Fraudsters usually also take care not to place an order by telephone or online in a way that can be traced to them. (McQuade, 2006, p. 69)

Resources

Notes and References

1. By Samuel C. McQuade, III

See Also

• Types of Cybercrime
• Cybercriminal

Gambling; Internet Law; Mafia and Organized Crime; Pornography; Risk; Sex Offenders; Terrorism

Further Reading

Goodman, Marc D.; Susan W. Brenner. “The Emerging Consensus on Criminal Conduct in Cyberspace.” International Journal of Law & Information Technology, 10, (2002). 139-223.
Hamelink, Cees J. (2000). The Ethics of Cyberspace. London: Sage.
Jewkess, Yvonne, ed. (2003). Dot.coms: Crime, Deviance, and Identity on the Internet. Cullompton, UK: Willan.
Jewkess, Yvonne, ed. (2003). “Policing Cybercrime.” In Handbook of Policing, edited by Newburn, Tim. Cullompton, UK: Willan, 501-24.
Jewkess, Yvonne, ed. (2007). Crime Online. Cullompton, UK: Willan.
Newman, Graeme R.; Ronald V. Clarke. (2003). Superhighway Robbery: Preventing E-Commerce Crime. Cullompton, UK: Willan.
McQuade, S. (2006). Understanding and managing cybercrime, 67–74. Boston: Allyn and Bacon; The Silver Lake Editors. (2006). Scams & swindles: Phishing, spoofing, ID theft, Nigerian advance schemes investment frauds: How to Recognize and avoid rip-offs in the Internet age. Lansdowne, PA: Silver Lake Publishing; Thomes, J.T. (2000). Dotcons: Con games, fraud & deceit on the Internet. Bloomington, IN: Writers Club Press; Wall, D.S. (2007). Crime and the Internet. London, England: Taylor & Francis; Wells, J., & Association of Certified Fraud Examiners. (2004). The computer and Internet fraud manual. Austin, TX: Association of Certified Fraud Examiners, Inc.Willcox, B. (2005). Diary of an eBay fraud case. Pittsburgh, PA: Red Lead Press.