Internet Fraud Scam Receives Little Attention from Authorities

Laura BednarCybersecurity and Vulnerabilities, Fraud

Internet Fraud No Attention from Authorities

Internet crime is a growing problem around the world. Under the guise of a fake bank or legitimate agency, scammers can cause consumers to lose significant amounts of money in little time. In one recent case, an online scam cost a New York-based physician named Sergio Narvaez $200,000. After wiring the money to a fake bank in the United States, the physician’s funds disappeared and have yet to be recovered. Most cases of cybercrime involve smaller amounts of money. However, they can still wreak havoc on a personal or corporate bank account.

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How did the Scam Work?

The scam was carried out using a fraudulent bank website called “VisionBank.” The website was set up under the guise of a similar, legitimate website for a bank based in Iowa. The fraudulent website had a contact person and specific instructions for Narvaez to wire his money through two separate $100,000 transfers that totaled $200,000. The transfer was requested through the physician’s bank, which was Chase. After receiving authorization from Chase to complete the transfer, the doctor’s money was sent to fraudulent sites in Poland and Hong Kong. Shortly after the money reached Hong Kong, the attackers took the spoof website offline.

Protecting against internet crimes

As statistics show, internet crime has affected many in recent years. In 2018, the Insurance Information Institute (III) ranked the number of cybercrimes in the United States by number of cases:

  • New credit card hacks (130,928)
  • Identity theft (87,765)
  • Tax fraud (38,967)
  • Mobile phone attacks (33,466)
  • Existing credit card hacks (32,329)

Of all web-based attacks, most victims were targeted when they set up new credit card accounts. Many were also targeted upon setting up mobile phone accounts and when paying taxes.

Although it can be hard to distinguish between hackers and legitimate websites, experts say that people can look for some warning signs and patterns that may indicate trouble. Some of the most common methods that cyber attackers use, according to the US Securities and Exchange Commission, include:

  • High minimum deposit amounts
  • Identity theft (87,765)
  • Selling only CD products
  • Sending wire transfers overseas
  • Naming fake clearing partners

Knowing the signs of fraud, authorities say, is the best method of defense.

Why won’t law enforcement agencies help?

After realizing that his money vanished, Narvaez filed a complaint with the IC3. However, it did not launch an investigation as he hoped. The physician then contacted the NYC Police Department, who informed him that the investigation was beyond the department’s control as it involved funds diverted overseas. Narvaez then filed reports with police departments in Hong Kong and Lithuania, but to no avail. If a case is outside of an agency’s jurisdiction, it usually won’t take action.

Although legal enforcement teams around the world would like to help stop internet crimes, they often face challenges. One issue facing the FBI and other law enforcement agencies is the sheer volume of internet crimes that take place within the United States and cross international borders. In 2018, the FBI reported a total of 350,000 cybercrime complaints around the world. Collectively, they resulted in a net loss of nearly three billion. This number is double the amount recorded in 2017. However, the actual rates and losses associated with cybercrimes may be even higher, as victims file complaints voluntarily.

Along with the large volume of internet attacks, law enforcement agencies face challenges governing laws. Cybercrimes that cross-country boundaries are especially difficult to resolve, as international law on internet crimes is often complex and tedious to navigate. Furthermore, a legal challenge facing authorities is the fact that many privacy laws are weak and ineffective or even non-existent. Consequently, they often end up favoring cybercriminals rather than effectively stopping web-based crimes.

Protect Your Assets in the Cyber World

At Secure Forensics, your online safety and security is our biggest concern. With experienced examiners and the ability to deploy anywhere in the world in 24 hours, we can respond to your cyber emergencies around the clock. Whether you’ve been a victim of an internet attack or you’re looking to take preventative action, we can assist. Contact us at 1-800-288-1407 to learn more about our services for internet fraud, data breaches, and online security.