Scam of the day – March 7, 2017 – Prisoner convicted of income tax identity theft while in prison

Daniel Aaron Stone has pleaded guilty to charges related to income tax identity theft and will be sentenced later this year.  However, it is unlikely that Stone’s address will change once he is sentenced because he is already serving time in federal prison and was doing so at the time he committed his new crimes.

This is just an example of how easy it is to accomplish income tax identity theft.  All it takes is the names and Social Security numbers of the intended victims.  Using this information, it is a simple matter to electronically file a fraudulent income tax return with phony W-2 information.  If the phony return is filed before the victim files his or her income tax return, there is a good chance that the IRS will send the requested refund to the income tax identity thief.


Try as it may, the IRS is having a difficult time stopping income tax identity theft.   Along with protecting your personal information, particularly your Social Security number as much as you can, the best thing you can do to avoid becoming a victim of income tax identity theft is to file your income tax return early.  Income tax identity theft can only work when the criminal is able to file an income tax return using your name and Social Security number before you file your own legitimate income tax return so consider filing as early as possible.

Scam of the day – March 6, 2017 – Ponzi schemer pleads guilty to 54 million dollar scam

If you needed further proof that the scam pioneered by Charles Ponzi whose birthday was just three days ago still lives, the guilty plea of Troy Wragg in federal court on various fraud charges including securities fraud and conspiracy is proof that Ponzi schemes are still a scam of choice for many modern day scammers.

Wragg founded Mantria Corp, which he touted as being the next Microsoft, promising investors to make them rich through the company’s innovative energy saving technology coupled with green real estate development.  Investors were lured to invest in Mantria through “Speed of Wealth” seminars promising profits of as much as 484%.

Unfortunately, the company was a failure and when it began to have financial problems, Wragg turned it into a Ponzi scheme by which he paid early investors with the money from later investors, all the while keeping sizable amounts of the money for himself.


Among the many red flags that this was a Ponzi scheme is the promise of huge profits with little or no risk.  As always, if it looks to good to be true, it generally is not true.  In addition, no one should ever invest in anything that they do not fully understand.  If investors had done their research on the complicated environmental technology that Wragg told them he had, they would have found many problems.  As for the real estate part of Mantria, if investors had looked into the real estate owned by Mantria, they would have found that the land did not have access to potable water and was littered with unexploded artillery shells from its previous use as a military firing range.

Never invest in anything until you have thoroughly researched the people offering the investment and the investment itself.


Scam of the day – March 5, 2017 – A new mystery shopper scam

I have written about mystery shopper scams many times over the last few years, but I am making mystery shopper scams the topic of today’s Scam of the day because I just received a new email that you may have received as well.  In addition, these scams continue to snag many unwary victims so it is important to remind everyone to be aware of this scam.  Mystery shoppers are people hired to shop at a particular store and report on the shopping experience for purposes of quality control.  Unlike many scams, there actually are legitimate mystery shopper companies, but they never advertise or recruit through emails.

The manner in which the scam works is that when you answer an advertisement or an email to become a mystery shopper, you are sent a bank check to deposit and use for your shopping.  You spend some of the money on the goods that you purchase which you are allowed to keep and also are directed to keep some of the balance of the check as payment for your services.   You are instructed to return the remaining funds by a wire transfer.  The problem is that the check is counterfeit, but the money you send by wire from your own bank account is legitimate and that money is gone from your bank account forever.

Here is a copy of the email I recently received:

“Hello, We are a company engaged in the mystery shopper field.
We need a team filled some people with age, residence location, experience and other different.
You will be assigned to visit the shop, store, bank, etc
You have to pretend to be a normal potential customers who’re looking for a specific product/service
You will then complete questionnaires online to share with us your customer’s experience
Get $350/assignment, at least 2 assignments/week will be assigned.
18 years old or above
Can read and write English
Can speak the local language well
If you are interested reply this email fill out information below to get started :
�  Full Name :
�  Full Address :
�  City/State/Zip :
�  Gender/Age :
�  Email Address :
�  Phone Number :
So we can look at your distance from the locations which you have to put your service, and your address would also be need for your payments.
Best Regards
Head of Recruitment
 � 2005-2017 Agent Center for MysteryShoppers – All Rights Reserved”


One reason why this scam snares so many people is that there really are mystery shopping jobs although the actual number is quite few and they do not go looking for you. An indication that you are involved with a scam is when you receive a check for more than what is owed you and you are asked to wire the difference back to the sender.  This is the basis of many scams.  Whenever you receive a check, wait for your bank to tell you that the check has fully cleared before you consider the funds as actually being in your account.  Don’t rely on provisional credit  which is given after a few days, but which can be rescinded once a check bounces and never accept a check for more than what is owed with the intention to send back the rest.  That is always a scam.  Also be wary whenever you are asked to wire funds because this is a common theme in many scams because it is difficult to trace and impossible to stop.

Scam of the day – March 4, 2017 – New York financial service company regulations go into effect

In September I first told you about the New York Department of Financial Services new cybersecurity rules for banks and financial services companies doing business in New York. These regulations come in the wake of repeated cybersecurity breaches at many banks and other financial services companies.  While the regulations set minimal standards all institutions must follow, the regulations were written in a manner to encourage companies to go further and not limit security innovation. Among the provisions of the regulations are the establishment of the position of chief information security officer at each company as well as increased use of encryption and dual factor authentication.  In addition, the proposed regulations also carry potential criminal liability for officials of companies not meeting the new standards.  The regulations were originally to go into effect on January 1, 2017, however the effective date was postponed until March 1, 2017.  Financial firms have an additional 180 days to make the changes necessary to comply with the regulations before any enforcement actions will be taken by New York authorities who have also promised a transitional period for compliance with the rules.


While these regulations are a good start toward more secure banking, it is still important for all of us to take responsibility for our own secure banking.  First and foremost you should monitor your bank accounts often for indications of any irregularities.  You should be particularly careful when banking with your smartphone or on your computer.  Use a strong password, strong security question and multi factor authentication whenever possible.  Here is a link to a column which I wrote for USA Today with more tips on how to protect yourself when banking online or on your phone.

Scam of the day – March 3, 2017 – Happy birthday Charles Ponzi

Had he not died in 1949, today would have been Charles Ponzi’s 135th birthday.  Scam artists around the world should probably honor the man who perfected the scheme that bears his name that has been used by many scam artists, the only criminals we refer to as artists to steal billions of dollars from unwitting victims who made the mistake of investing their money with him.  Although, Ponzi was not the first to use the technique of paying off early investors with the investments of later investors in an effort to make a total sham look as if it is a profitable business, that dishonor should go to William Miller who first used this scheme in 1899, it was Ponzi in 1920 who perfected the scam to steal millions of dollars from unwary investors in his scheme by which he told them that he was able to take advantage of fluctuating currency values to purchase international postal reply coupons at a discount and then sell them at face value in the United States.  Ponzi promised, and delivered to early investors, a 50% profit on investments within 45 days and a 100% profit within 90 days.  Of course, the entire scheme was a total sham, but eager investors blinded by their greed flocked to him to invest.  Eventually, as ultimately always happens in a Ponzi scheme, the scam was exposed and Ponzi went to prison.  However, the list of criminals still using this prototype of a scam continues to this day including such famous Ponzi scheme criminals as Allen Stanford, Tom Petters, Norman Hsu, Lou Pearlman and, of course, the biggest of them all, Bernie Madoff who swindled people out of more than 50 billion dollars using this time honored scheme.


So how do you protect yourself from falling prey to a Ponzi schemer?  There are a number of things you can do including always investigate the credentials of any investment adviser you are considering using.  You can check on individual investment advisers with the SEC, your own state’s securities regulators and the Financial Industry Regulatory Authority (FINRA).  However, that would not have protected you from being swindled by the likes of Allen Stanford or Bernie Madoff.

Another important thing is to never use an investment adviser who is also the custodian of your funds. This is a recipe for disaster.  The role of an investment adviser or manager should be solely that of advising and making trades.  The custodian of the actual investments should be a separate broker-dealer regulated by the Financial Industry Regulatory Authority (FINRA) and backed by the Securities Investor Protection Corp. (SIPC).  Never invest in anything that you don’t totally understand and be particularly wary of investments that promise huge returns or no risk of ever losing money even when market conditions are poor.

Scam of the day – March 2, 2017 – Scammers using fake news websites to sell health products

Recently the FTC issued a warning about scammers setting up phony websites that appear to be legitimate news websites touting the effectiveness of various health products including some that claim to be “brain boosters” that will boost your memory and increase your concentration.   Some of these phony products are advertised as being endorsed by well known celebrities, such as Stephen Hawking and Anderson Cooper when, in fact, these celebrities’ names were used without their knowledge and they never endorsed the products.

The websites appear to be legitimate news websites that prompt you to click on a link to go to another website where you can purchase the bogus products.


This is the era of fake news so it we should all be wary of news stories that purport to describe startling new health care products that we can purchase.  Before paying for any product that claims it will help you miraculously lose weight, improve your memory or provide other health benefits, you should check with your own physician about the product.

Scam of the day – March 1, 2017 – Latest security updates from the Department of Homeland Security

Constant updating of the software we all use with the latest security patches and updates is a critical part of avoiding scams and identity theft threats.  Whenever new security updates and patches are issued, we provide access to these so that you can update your software to provide better security on your computers, smartphones, laptops and other electronic devices.  Updating your software with the latest security patches and updates as soon as possible is important because identity thieves and scammers are always finding and exploiting vulnerabilities in the software that we all use.  Delay in updating your software could lead to disastrous results.  However, it is also important to be sure that you are downloading legitimate patches and updates rather than being tricked by an identity thief or scammer into downloading malware under the guise of downloading a security patch or update.  These new updates from the Department of Homeland Security includes critical updates for iPhones and other Apple devices.


Here is a  link to a list of all of the recent security updates as posted by the Department of Homeland Security:

Scam of the day – February 28, 2017 – Religious leaders being hacked by scam artists

As many of you know, one of my mottos  is “trust me, you can’t trust anyone.”  I mention this because of a recent story in the news about a Denver church pastor whose Facebook account was hacked.   When a parishioner messaged the pastor about difficulties she was having, her pastor messaged her back telling her about a grant of substantial money he had recently received and gave her the contact information for the grant issuer so she could apply for the money she so desperately needed. Of course the grant was a scam and the message to her came from the scammer who had hacked into the pastor’s Facebook account. Fortunately, in this instance, the parishioner called her pastor prior to making the payment demanded of the phony grant issuer and managed to avoid being scammed.  However, other people have not been so lucky.


Trust me, you can’t trust anyone.  It bears repeating.  Whenever you get an email, text message or phone call, you can never be sure that the communication is coming from who appears to be sending the communication.  It is relatively easy to hack an email account, Facebook account or cell phone.  Therefore, you should never click on a link, download an attachment or provide personal information in response to any communication unless and until you have absolutely confirmed that it is indeed legitimate.

Scam of the day – February 27, 2017 – FTC settles phony prize scam charges

The Federal Trade Commission has closed down a mass mailing phony prize scam and settled charges with one of the perpetrators of the scam, Ian Gamberg, while continuing to pursue charges against other defendants involved in the scam.

Hundreds of thousands of primarily elderly people received mailings informing them that they had won a prize in a contest they had not even entered.  According to the mailers, “… this is NOT a preliminary or qualification letter of cash prize status; YOU HAVE WON A CASH PRIZE!” The notices contained logos, stamps and seals that made the letters look legitimate.  The people receiving the letters were prompted to fill out a form with personal information and return the form to a Post Office Box in the Netherlands along with a payment of $25 as a charge to claim their prize.

Of course, there was no prize and to make matters worse, the personal information of the victims of the scam was sold to other scammers who sent similar prize scam letters to the victims who often paid the amounts requested multiple times.

This particular scam was brought down by joint efforts of consumer protection and law enforcement agencies in a number of countries including Australia, Belgium, Canada, the Netherlands, Nigeria, Norway, Spain, the UK and the United States.


It is hard to win a lottery or contest and it is impossible to win one that you have not even entered.  That should be the first indication when you receive such a letter that it is a scam.

In addition, no legitimate lottery or contest requires you to make a payment to obtain your prize.   Although the request for payment under the guise of the payment being for income taxes, processing fees or shipping and handling charges may seem legitimate, they are not.  While income taxes are due on lottery and contest winnings, no sponsor of a lottery or contest collects taxes from winners.  The sponsors of legitimate contests and lotteries either deduct taxes from the winnings or pay the entire prize and leave the payment of taxes to the winners to do on their own.

Even if the contest or lottery appears to have been sponsored by a well-known company with which you are familiar, if the contest or lottery requires you to make a payment to obtain your prize, it is a scam. Scammers often use the names and easily counterfeited logos of legitimate companies to make their scams look genuine.

Scam of the day – February 26, 2017 – Data leak at Cloudflare threatens everyone

Many of you many not be aware of Cloudflare which is one of the biggest Internet security companies in the world whose services are used by literally millions.  Recently, security researcher Tavis Ormandy discovered a massive vulnerability in Cloudflare’s code that for six months has been leaking massive amounts of data including passwords and personal information across the Internet.

Among the many companies that use Cloudflare’s services are Uber, OKCupid and FitBit.  The code vulnerability has been fixed and at this time we do not know if hackers had already exploited the vulnerability and stolen the massive amounts of data affected by the leak, however some of the data  is available through search engines such as Google and Yahoo and it will take a while for Cloudflare to purge the data from the caches readily available through search engines.  Quite frankly everyone is in jeopardy due to this data leak.


This incident, once again, reminds us all that we are only as secure as the places that have our personal information with the weakest security.  This is probably a good time to consider changing your passwords and as an extra security measure add dual factor authentication to whatever accounts you use that offer it.