Dragnet Snares 565 for Online Fraud

Global authorities cooperate in the most far-reaching enforcement action ever mounted against online fraud

Last week, the bogus "Sweepstakes Security Commission" was operating in full swing, merrily bilking unsuspecting consumers out of millions of dollars.

Today, the whole gang is behind bars.

In the largest and most far-reaching operation ever directed at mass-marketing fraud schemes, an international team of law enforcement agencies arrested some 565 suspected perpetrators, the U.S. Department of Justice said yesterday. The arrests, which took place in the U.S., Canada, Costa Rica, the Netherlands, and Spain, resulted from 96 separate investigations alleging more than $1 billion in fraud against more than 2.8 million victims.

The joint investigation, dubbed "Operation Global Con," came to completion last week when law enforcement agencies busted several "boiler room" sites for mass-marketing fraud in Costa Rica, including the operators of the nonexistent Sweepstakes Security Commission. The Costa Rican con artists were using VOIP and mobile phones to phish consumers, telling them they had won large sweepstakes prizes and then asking for "insurance fees" to protect their winnings.

Dozens of federal and local law enforcement agencies across the Americas and Europe linked up for Operation Global Con, using computer networks to create "virtual task forces." The huge initiative served notice to both online and offline criminals who have previously escaped through the cracks between agencies and jurisdictions.

"Mass-marketing fraudsters think they can use modern technology to operate from anywhere in the world with impunity," observed U.S. Attorney General Alberto Gonzales at a news conference. "The virtual task forces that we have built with Canada, Costa Rica, and the Netherlands provide a new model for us to bring these international con artists to justice."

The alleged perpetrators were arrested for a wide variety of schemes, including so-called "419" advance-fee schemes; foreign currency trading; bogus lottery, prize, and sweepstakes; offers of nonexistent investments; bogus offers of "pre-approved" credit cards or credit-card protection; and tax fraud. In addition to the criminal charges, the Federal Trade Commission brought 20 civil actions against 140 defendants in illegal fraud schemes.

— Tim Wilson, Site Editor, Dark Reading

Organizations mentioned in this story

  • Federal Trade Commission
  • Sun Microsystems Inc. (Nasdaq: SUNW)
  • U.S. Department of Justice
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