The U.S.Secret Service has cracked down on an international ID theft ring that is responsible for more than $14 million in fraud losses, the agency said Monday, June 25. On June 12, French National Police arrested four on online fraud charges, acting on information provided by the Secret Service. The arrests were part of an undercover investigation into the activities of an online criminal known by the alias, "Lord Kaisersose," who is "associated with Internet sites4 known for identity theft and financial fraud activities," the Secret Service said. Investigators found more than 28,000 stolen credit− and bank−card numbers as a result of this operation, the Secret Service said. "Fraud losses associated with this investigation have exceeded $14million," the Secret Service said. At the same time the Secret Service, working with local authorities, closed down an illegal credit card−selling activity based out of Canada and France.This action, called Operation Hard Drive, led to the arrest of two suspects, who are allegedly behind more than $1 million in credit card fraud.
Source: Secret Service helps bust ID, credit card theft rings | InfoWorld | News | 2007-06-25 | By Robert McMillan, IDG News Service

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Data Theft Arrests Show How Tens of Millions Are At RiskJune 12, USA TODAY

Last fall,19−year−old Irving Escobar crisscrossed northern and central Florida using counterfeit credit cards to buy stacks of $400 gift cards from Wal−Mart stores, cashing them in to buy TVs, PC sand jewelry from Wal−Mart subsidiary Sam's Clubs in south Florida. With credit cards supplied by an unnamed recruiter, they bought gift cards in $400 increments −− just below the $500limit that requires a manager's approval. At one store, they hauled out 60 $400 gift cards. Escobar returned some merchandise for cash refunds, and he probably sold some of the gift cards, according to Florida law−enforcement officials. "It was modern−day money laundering,"says Amy Osteryoung, an assistant statewide prosecutor. But this scam was part of a sophisticated operation that started with the theft of credit card data on 45.7 million customers of TJX. Investigators believe it is the boldest tangible evidence of criminals cashing in on hacked data from TJX. What's more, the Florida scam took advantage of burgeoning markets for counterfeit credit cards and authentic gift cards −− and it could be easily repeated anywhere."Who's to say this scam wasn't happening in other states, with other retailers?" says BrianRiley, senior bank card analyst at TowerGroup.Source: http://www.wzzm13.com/news/news_arti...toryid=7640312

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California Man Gets Six−Year Sentence For Phishing
June 12, InformationWeek

A California man who was found guilty in January of operating a sophisticated phishing schemethat attempted to dupe thousands of AOL users received a prison sentence Monday of 70months −− a fraction of the 101 years he could have been given. In the first jury conviction under the Can−Spam Act of 2003, Jeffrey Brett Goodin was convicted of sending thousands of emails set up to appear to be from AOL's billing department to the company's users,prompting them to reply with personal and credit−card information. He then used the information to make unauthorized purchases, according to the U.S. Attorney's Office in Los Angeles. Assistant U.S. Attorney Rozella Oliver, who represented the government in the sentencing, said she had pushed for a minimum of 94 months, but the judge factored in mitigating circumstances, such as Goodin's lack of a criminal history. Good in also was found guilty of 10 other counts, including wire fraud, aiding and abetting the unauthorized use of an access device (a credit card in this case), and possession of more than 15 unauthorized access devices.
Source: California Man Gets 6-Year Sentence For Phishing -- E-mail Scam -- InformationWeek

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June 19, Sophos — Seventy Months In Jail For Convicted AOL Phisher.

Jeffrey Goodin faces nearly six years in jail for his phishing offences. SophosLabs welcomed the news that a man has been sentenced to 70 months in prison after phishing credit card information from Internet users. Jeffrey Brett Goodin, 47, of Azusa, CA, has been sent to jail for nearly six years afte rusing several different compromised Earthlink e−mail accounts to send thousands of unsolicited e−mails posing as AOL's billing department. The phishing e−mails directed recipients to bogus payment Websites. Goodin was also convicted on a number of other counts including wire fraud, possession of unauthorized credit cards, misuse of the AOL trademark,and attempted witness harassment.

Source: http://www.sophos.com/pressoffice/ne...722;jail.html9.

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There was some bad news earlier today on a private email list which stated that last week’s motion by e-gold defendants to release their seized gold funds had been denied. The actual text is here:

MINUTE ENTRY ORDER denying [35], [36] Defendants’ Motion to Vacate Seizure Warrant and to Modify Restraining Order and Request for an Evidentiary Hearing. For the reasons stated at the June 21, 2007 hearing, in open court, the Defendants’ Motion is hereby DENIED. This is a final appealable order. See Fed. R. App. P. 4(a).

Signed by Judge Rosemary M. Collyer on June 22, 2007. (cdw)

The seized assets shall remain frozen.

If you are just tuning in, back in late April, a federal grand jury in Washington, D.C. indicted two companies, E-Gold Ltd and Gold & Silver Reserve, Inc, and their owners Dr. Douglas L. Jackson, Reid A. Jackson and Barry K. Downey on charges of money laundering, conspiracy and operating an unlicensed money transmitting business.

All of these charges have been vigorously denied by the e-gold camp plus e-gold is still operating and the e-metal issued by them is still widely used around the globe. Their primary dealer, OmniPay is on a quick hiatus and now has an ongoing move of their business out of the US and into a west African nation. We should hear move positive news on OmniPay in the coming weeks.

At the time of the indictment, the DOJ also issued two dozen seizure warrants on something like 60 e-gold accounts which they said currently held property involved with the alleged money laundering and/or the alleged unlicensed money transmitting business.

One or several of the seized accounts held the e-gold that was backing 1MDC (the fast and convenient payment system built around e-gold). 1MDC was a great online system that offered storage of your digital gold without monthly fees. Unfortunately, if you had a 1MDC account at the end of April, you lost all account value during the government’s seizure of the e-gold accounts!

1MDC accounts are still intact, but the units no longer have any value. Over the past few weeks, there has been some buying and selling of 1MDC between existing account holders below market prices. Not surprisingly, a few people had hopes that if 1MDC came back from the dead, they could profit from it’s resurrection.

If last week’s hearing had vacated the seizure and released the funds, 1MDC may have taken its first steps towards value. That did not happen and I think any tiny hope of a 1MDC comeback is now fading.

It is a bit like understanding the Beatles will not be getting back together because you just realized today that some of them are already dead…it ain’t going to happen.

The hearing, which occurred last Thursday, was to vacate the Seizure Warrant and release the funds from the entire asset seizure. Unfortunately, the Judge denied it and consequently 1MDC shall remain worthless. All of these seized funds (all 58 accounts) holding an estimated $11-$16 million is still being held by the government pending an outcome from this mess.

Judge Rules Against e-gold In Seizure Warrant Motion

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