White Collar Crime Midterm Study Guide

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18 USC 1028
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a. Fraud and related activity in connection with identification documents, authentication features, and information b. Whoever knowing and without lawful authority produces ID documents, authentication features, or a false ID document, Knowingly transfers an ID, authentication feature, or false ID knowing that it was falsely produced or stolen, Knowingly possess with intent to use unlawfully or transfer unlawfully 5+ IDs, authentication features, or false IDs, Knowingly transfers means of ID of another person with intent to commit any unlawful activity (violation of federal law or felony), Knowingly traffics in false/actual authentication features for use in false IDs/means of ID c. Up to 15 years in prison and fines d. Attempt and conspiracy—persons who attempt/conspire to commit any offense under this section are subject to the same penalties as those who commit the offense (commission was the object of the attempt or conspiracy)
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Actus Rea
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The wrongful act or omission that comprises the physical components of a crime
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Advanced Fee Scam
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-Type of fraud -Involves promising the victim a significant share of a large sum of money in return for a small up-front payment, which the fraudster requires in order to obtain the large sum -Any scam that, in exchange for a fee, +Promises to send you money, products, or services; +Offers you the opportunity to participate in a special deal; +Asks for your assistance in removing funds from a country in political turmoil; or +Asks for your assistance to help law enforcement catch thieves -Victims never see their money or the scammers again -Nigerian Fraud uses this type of scam frequently -Spanish prisoner scam, Nigerian 419 scam, etc.
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Auto Warranty Extension Scams
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MICHAEL ZAMBOUROS -Sell extended coverage auto policies/Backup warranty -Solicit your business through phone calls, emails, and snail mail -Told to call 1800number, Want VIN off car, transferred a bunch of times, want CC# -A ton of interrelated/connected shell companies -Want you to give them money for coverage that isn't there or isn't needed—don't care about the car you actually have or don't check up on it -Claim to be part of agencies, but not really part of them
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Bait and Switch
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Draw victim in promising one thing and change to something when they are hooked to get more money -Carpet cleaning -High pressure situation/salespeople
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Bank of Credit and Commerce International
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-World's sleaziest bank—most crooked bank in the world -Iran-Contra Affair laundered money there -White Collar Crime's bank
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Bernie Madoff
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-Ponzi scheme of over $60 billion dollars -Trust, vulnerability, greed
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Black Money Scam
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-\"wash-wash scam\" -Con artist fraudulently obtains money by saying real money dyed black to avoid customs = need money to wash it & will give you a bunch of the money when it is lean -2 Liberians arrested in 2008 for it
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Blackmail
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Demand for money in exchange for not being exposed (Secrets)
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Blue Collar Crime
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-originally coined to mean those crimes committed by someone from the working or lower class of society. -those crimes that are considered to be fueled on by passion, rage or other emotions, as compared to those that are carefully calculated and executed. -Crimes that cause injury to people or property, such as burglary or other property crimes, theft crimes, sex crimes, assault, and drug crimes
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Brian E.P.B O'Connell, N.M.D.
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-Irish natural doctor—family thought they could trust him -Bunch of fake diplomas and licenses -Did work with healing photons and blood irradiation therapy -Injected teen with peroxide, withdrew blood and exposed to UV light, injected it back into him -Gave him IV drip of vitamins -Teen died of blood infection because of procedures -Arrested on 14 counts of reckless manslaughter, assaults, practicing medicine without license, fraud, possession of controlled substance
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Bribery
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The offering, giving, receiving, or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her public or legal duties. The expectation of a particular voluntary action in return is what makes the difference between a bribe and a private demonstration of goodwill. To offer or provide payment in order to persuade someone with a responsibility to betray that responsibility is known as seeking Undue Influence over that person's actions. When someone with power seeks payment in exchange for certain actions, that person is said to be peddling influence. Regardless of who initiates the deal, either party to an act of bribery can be found guilty of the crime independently of the other.
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Burden of Proof
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-can define the duty placed upon a party to prove or disprove a disputed fact, or it can define which party bears this burden. In criminal cases, the burden of proof is placed on the prosecution, who must demonstrate that the defendant is guilty before a jury may convict him or her. But in some jurisdiction, the defendant has the burden of establishing the existence of certain facts that give rise to a defense, such as the insanity plea. In civil cases, the plaintiff is normally charged with the burden of proof, but the defendant can be required to establish certain defenses. -criminal: beyond a reasonable doubt -civil: preponderance of evidence
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Card Shops
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a. Dumps: data stolen from magnetic stripes on credit/debit cards b. Organized crime rings linked to Russian and eastern European groups/Albanians c. Sold in black market d. Card numbers sold to brokers who acquire stolen card numbers in bulk e. Numbers sold to \"carders\" via \"deep web\" f. Price for valid credit cards can be as high as $100 per card depending on amount of information available with card, type of the card, and known limits of card g. Hotel Key Cards i. Credit card information you registered with is stored on magnetic strips on the cards h. Credit to Gift Card Shell Game i. Stolen credit cards used to charge pre-paid cards ii. Used to purchase store specific gift cards, such as amazon iii. Makes It harder to track i. Shopping and reshipping i. Carder then uses gift card to purchase high value goods, electronics, cell phones, etc ii. Packages then shipped via reshipping scam iii. Mules sell the goods on eBay and craigslist j. Earn money at home—You boxing goods at home and shipping it out = you are part of scam k. Items on hidden illegal websites sold at deep discounts on black market--around 50% retail and reshipped or sent to a secure drop (vacant house) a purchaser has setup for this purpose i. White box item = part of a \"kit deal\" and they are selling it in pieces
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Cash Gifting
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-MLM scam -Tries to take advantage of tax code that allows for gifts—but not legal because gifts can't be given in consideration for something else -Designed to separate you from money—you could also be charged with fraud
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Caveat Emptor
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-warning that notifies a buyer that the goods he or she is buying are \"as is,\" or subject to all defects. -When a sale is subject to this warning the purchaser assumes the risk that the product might be either defective or unsuitable to his or her needs. Not designed to shield sellers who engage in Fraud or bad faith dealing by making false or misleading representations about the quality or condition of a particular product. It merely summarizes the concept that a purchaser must examine, judge, and test a product considered for purchase himself or herself. -The modern trend in laws protecting consumers, however, has minimized the importance of this rule. Although the buyer is still required to make a reasonable inspection of goods upon purchase, increased responsibilities have been placed upon the seller, and the doctrine of caveat venditor (Latin for \"let the seller beware\") has become more prevalent. Generally, there is a legal presumption that a seller makes certain warranties unless the buyer and the seller agree otherwise. One such Warranty is the Implied Warranty of merchantability. If a person buys soap, for example, there is an implied warranty that it will clean; if a person buys skis, there is an implied warranty that they will be safe to use on the slopes. -Latin for \"let the buyer beware.\" The basic premise that the buyer buys at his/her own risk and therefore should examine and test a product himself/herself for obvious defects and imperfections. Caveat emptor still applies even if the purchase is \"as is\" or when a defect is obvious upon reasonable inspection before purchase. Since implied warranties (assumed quality of goods) and consumer protections have come upon the legal landscape, the seller is held to a higher standard of disclosure than \"buyer beware\" and has responsibility for defects which could not be noted by casual inspection (particularly since modern devices cannot be tested except by use, and so many products are pre-packaged).
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Charles Ponzi
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highly profitable and expansive investment scheme- charged with 86 counts of mail fraud
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Check Kiting
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-A crime involving writing a check on an account, Account A, with insufficient funds and depositing it in another account, Account B, and then writing a check on Account B and depositing it in Account A to cover the first check written on Account A. Kiting takes advantage of the time it takes banks to clear checks. Before the bank in which Account B is held has time to clear the check written on Account A, the kiter has already written a second check on Account B and deposited it in Account A, making it appear as though the bank in which Account A is held has sufficient funds. The bank in which Account B is held then honors the check written on Account A. Through kiting, the kiter obtains an illegal, interest-free loan -Bank account opened with good funds and report -Deposits series of bad checks and takes out money
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Chicken Coop Murders
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-Gordon Steward Northcott -Wineville, California (Mira Loma - changed name because of bad publicity) -Ran child abduction ring -Northcott chicken ranch -Kidnapped children and molested them near the chicken coops -Killed them and buried them in the chicken coops -Walter Collins was one of the victims -Northcott signed out in the big book at LA county Jail as he went on trial as slayer of Winslow brothers -Given death penalty -Hanged -Asked to be prayed for - had to be hauled up the stairs -Hutchins boy reunited with mother in Marion Iowa -Sold concessions at Carnivals was horse trainer and jockey in California
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Collateral Investment Call
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-Investors want to cash out portfolios -are early in the Collateral Investment Call may get their money back (insiders) -The more investors who want their money, the more difficult it is to meet demand -Why: Investments may not have actually been made - Money went back to earlier investors -New investors not coming in -Investments may have become toxic (assets) -Assets not worth much, liabilities, worthless
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Common Law
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Judge-declared law. Law which exists and applies to a group on the basis of customs and legal precedents
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Consent Order
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-An order of the court in terms which have been contractually entered into by parties to the litigation -It is generally a voluntary agreement worked out between two or more parties to a dispute. It generally has the same effect as a court order and can be enforced by the court if anyone does not comply with the orders.
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Conspiracy Elements
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-No formal agreement required (but can be present) -Intend to commit crime -Must be an overt action in furtherance of crime -You have to move towards committing that crime (buy getaway car or ski mask to wear in the robbery) -At least 2 persons involved (you can't conspire by yourself)
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Conspiracy Requirement
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-Preparation -2 or more people -Mens rea: Guilty intention-refers to mental aspect of crime -- Sometimes negligence or reckless action APC actual physical control laws--drunk driving resulting in death APC = drunk and get in car and decide you were too drunk to drive and decide to sleep it off in car Cop comes along and arrests you for drunk driving = you could have gotten up at any time and decided to drive -Criminal conduct usually refers to intentional action or inaction -Actus rea --Actual criminal conduct or criminal negligence. ex. If a criminal accepts money to throw a fight or basketball player accepts money to shave points
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Consumer Fraud
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-Deceptive practices that result in financial or other losses for consumers in the course of seemingly legitimate business transactions. -Consumer fraud can take place in person, by telephone or mail, or over the Internet. As technology continues to improve, Internet Fraud has risen faster than other types. With or without technology, however, consumers can protect themselves against fraud by following a few simple, common-sense measures such as not revealing personal information to strangers. -Common types: Identity Theft Telephone and Mail Solicitations Internet Fraud Income Tax Fraud
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Continuity Sales Model
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-The scam is called continuity billing, an appropriate term because if you fall for the scheme -- and thousands of credit card holders are falling hard for it -- you will experience a continuity of regret. -The remorse continues because your credit card is billed each month for generally worthless services you were tricked into authorizing. -A continuity program is a company's sales offer where a buyer/consumer is agreeing to receive merchandise or services automatically at regular intervals (often monthly), without advance notice, until they cancel. -A consumer can join a plan simply by accepting an introductory offer of merchandise or services. -Continuity plans may offer an introductory \"free trial period\" to let potential consumers check out the merchandise or service and decide whether to join the plan. -If a consumer decides to keep the merchandise beyond the free trial period or fail to cancel the service within the free trial period, not only they must pay, but they automatically become a plan member.
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Credit Default Swap (CDS)
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A credit default swap is a particular type of swap designed to transfer the credit exposure of fixed income products between two or more parties. In a credit default swap, the buyer of the swap makes payments to the swap's seller up until the maturity date of a contract. In return, the seller agrees that, in the event that the debt issuer defaults or experiences another credit event, the seller will pay the buyer the security's premium as well all interest payments that would have been paid between that time and the security's maturity date. Used junk bonds to fund hostile takeovers of 1980s and 1990s
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Credit Reporting Act of 2003
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1. Right to free credit report yearly 2. Prohibits credit bureaus from reporting negative information that results from identity theft 3. Lenders must honor fraud alerts 4. Required to provide information on fraudulent consumers
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Criminal Intent
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-The intent to commit a crime: malice, as evidenced by a criminal act; an intent to deprive or defraud the true owner of his property. -Criminal intent means the intent to do something wrong or forbidden by law. -Intent refers to the state of mind accompanying an act especially a forbidden act. It is the outline of the mental pattern which is necessary to do the crime. At times criminal intent is used in the sense of mens rea-the mental element requisite for guilt of the offense charged.
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Edwin Sutherland
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-Pioneer of study of white collar crime—first introduced concept in 1939 during presentation to American Sociological Association—wrote White Collar Crime book -Defined WCC as crime committed by a person of respectability and high social status in the course of his occupation
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Embezzlement
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-Employee steals money from an account to which they have access -Differs from larceny 2 ways 1.Actual conversion of funds must take place 2. Original taking must not be trespassory -Persons handling funds had right to handle them -Didn't break in to steal Detroit Police Corruption case -More famous than conviction of former Police Chief William Hart -Hart sentenced to 10 years in prison and fined 2.6 million for looting police secret service signed designed to pay informants and make drug buys -Took a lot more money than he was fined -Corruption at the bottom can't exist unless it is tolerated at the top
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Energetix International College
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BioEnergetic Medicine College -For practitioners to get certified to use the machine—just trying to suck you in and get your money -\"accredited\" by American Association of Drugless practitioners and American Alternative Medicine Association -Avatar Company, VeraDyne Corporation, Bio-Electric Feedback
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Enterprise White Collar Crime
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Occupational crime: illegal financial activity committed in context of legitimate respectable occupation -Service crime: crimes of professionals—price fixing, retail crime, auto repair rip off crime -Elements: 1. Victims in desperate situation or predicament 2. Victim doesn't know costs or fairness of repairs (non-negotiable situation) 3. Victim has few if any alternatives 4. Perpetrator adds costs which cannot be challenged by victim 5. Perpetrator sets a tone of urgency or eminent danger
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Extortion
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-crime of obtaining money or property by threat to a victim's property or loved ones, intimidation, or false claim of a right. -The gaining of property or money by almost any kind of force, or threat of 1) violence, 2) property damage, 3) harm to reputation, or 4) unfavorable government action -Differs from robbery in that the threat in question does not pose an imminent physical danger to the victim
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Fair Credit Reporting Act
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Reporting agencies must: -Disclose credit file upon request, limit access to your information, get your consent before providing information to an employer, investigate disputed information, correct/delete inaccurate information, delete outdated information, remove name from marketing lists upon request, disclose credit score upon request, add identity theft and active duty alerts, remedy effects of identity theft, etc. -Designed to combat/deter identity theft
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Fee Stacking
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-Seller changes terms of transaction to get more money from the buyer—claiming shipping costs have become more expensive, additional fee for using particular payment method, additional fees ass transfer fees -Fraudulent misrepresentation—using postal service or wire communications = wire/mail fraud -Seller adding hidden charges after audition is over to obtain more money
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Forgery
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-Involves making, altering, use, or possession of a false writing in order to commit a fraud (intent to defraud) -Signing another person's name on a check, falsifying an academic transcript, using a false ID card to obtain a line of credit
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Franchise Scams
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-Pyramid schemes—marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular product—real profit is earned, not by sale of product, but by sale of new distributorships -Emphasis on selling franchises rather than the product eventually leads to a point where the supply of potential investors is exhausted and the pyramid collapses
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Freeway Ricky Ross
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-Biggest drug dealer in United States -The Walmart of crack cocaine -Part of Iran-Contra affair's sale of cocaine on the streets of Los Angeles -Supplied with drugs through US government and Nicaraguan drug traffickers—involved with the Contras -Didn't realize he was a pawn—used as a scapegoat
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Grey Market
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-Not illegal—stuff that is less illegal -Involves sale of goods through means other than intended—off warranty, unauthorized goods, deep discounts -Buy stuff online that isn't what it appears to be, deals too good to be true, ridiculously low prices -Bogus companies, bogus products, sketchy areas, etc. -Where products are sold outside of the manufacturer's authorized trading channels -Knock-offs, counterfeit, have counterfeit parts, second hand products/components, vaporware, authentic but illegally distributed, etc.
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Gypsy Scams
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Irish Travelers Smoking Car Scam Pigeon Drop Scam Construction Scam Convenience Store - white/blue collar crime Carpet Cleaning Bait and Switch
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Hostile Takeover
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Milken trading junk bonds and using CDS to finance hostile takeovers
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Identity Theft
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-accounts for more than 40 percent of all fraud complaints reported to the FTC. All identity theft is serious, but even in its mildest form it can involve the theft of a consumer's long-distance access code. The thief sells the code to individuals who use the code to charge long-distance calls all over the world. In its most serious form, a thief gains access to the victim's Social Security number. With this number, and some other basic information, a thief can create a double of the victim. The victim's information can be used to make purchases, to rent an apartment, or to take out bank loans. Often, victims of identity theft first find out their misfortune when they receive credit card bills totaling thousands of dollars, even though they had neither opened the accounts nor made the purchases -can gain access to their victim's information by copying it off of forms (for example, if they work in an office where such information is kept), by stealing a wallet or personal papers, or by otherwise exploiting a careless individual. (Fraud experts warn people never to give their Social Security or bank account numbers to someone who has phoned them, even from a seemingly legitimate business.) Often identity thieves work in large rings that span several states, which makes it difficult to track them down. Thus, even when a theft ring is cracked, others quickly crop up to take its place.
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Insider Trading
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-When individuals share or steal information that is material in nature for future investments -Significant enough to have affected the company's stock price had the information been available to the public -Martha Stewart and ImClone stocks
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International Accrediting Commission
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Not Legit - setup in small town in Missouri, professors named after TV characters, closed and reopened as Accrediting Commission International in Arkansas
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Internet Auction Fraud
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-Overpayment fraud: Targets seller—advertises high value item on internet—scammer contacts seller to purchase item, sends counterfeit check/money order for amount greater than price of item & asks seller to deposit payment and return the difference = check fake and seller out the money -Wire transfer schemes: Ads for sale of high value items on well-known auction sites = buyers directed to wire money to crooks & buyer never hears from seller again Second-chance schemes: Scammers offer losing bidders of legitimate auctions opportunity to buy item at reduced price—require victims to send payment through wire transfer companies but don't follow through on delivery
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Internet Dating Scams
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-Love Bites video—the love trap -Dating sites with promise of love -Victims \"catfished\" and asked for money, gifts, etc. -Scammed!
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Iran-Contra Affair
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-In the mid-1980s, US political officials authorized sales of weapons to Iran as part of covert efforts to trade arms for hostages -Used a lot of laundering to make it happen and sold cocaine in California -Proceeds from sale of weapons diverted to Contras in Nicaragua (despite congress prohibiting contra funding) -Freeway Ricky Ross Connected
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Junk Bonds
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-Bond rated \"bb\" or lower because of high default risk -High yield or speculative bonds = 3-4% higher than safe government issued bonds -Used for startup companies where you will make money on interest (sometimes company not real or has little in terms of assets)
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Kickbacks
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-When providers direct patients to other providers in exchange for a pecuniary response from the other provider -A payment made to someone who has facilitated a transaction or appointment, especially illicitly
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Knock-offs
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-A copy or imitation, especially of an expensive or designer product—identical and usually unauthorized but cheaper copy of patented, trademarked, or copyrighted product or work -\"sales\" that are too good to be true
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Liberty League International
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-Part of Travel Dynamics, Tru Dynamics, Liberty League, Liberty League International Review, Polaris Group/Polaris Global, etc. -Led by Brent Payne, Jim Piccolo, Shane Krieger, Bert Goldman -Shell companies and travel in the same circle -Jim Piccolo also head of Nouveau Riche University -Lifepath Liberty League Affiliate -Quantum Jumping
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Mari El
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-Republic within Russia—connected with Love Scam/center of operation of several international crime gangs -Get people at universities to write love letters (people with English background) as part of scam
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MCI/WorldCom
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-$11 billion accounting scandal -Whitewashed as accounting error -MCI/WorldCom bought 900#s (telephone porn) = sold to 3rd party who would resell to porn industry -Run up long distance charges for a couple of months -WorldCom bought lines from AT&T - sold lines to third party - sells to 900#s -Extended time to pay bills to 900#s - they defaulted - porn shops couldn't pay (collateral call) -WorldCom left on the hook to AT&T
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Mens Rea
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-A guilty mind; a guilty or wrongful purpose; a criminal intent; guilty knowledge and willfulness 0Deals with what the defendant needs to have been thinking at the time of committing the actus reus for criminal liability to attach
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Michael Zambouros
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-Owner of Great Atlantic Warranty Company—linked with mob (Gambino family), lived in Boca Raton, Florida -overpriced, don't try to get you good service or what you need, terms and conditions problems, -Didn't pay warranty companies for policies sold to customers -Had many companies that were connected (shell companies)
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MLM Concept
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-Money made is based on number of people you recruit and sales to them (and those below them) = pyramid scheme -Not direct selling, paid to recruit, recruiting as only path to profit, profit reserved for only those at the top, etc
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Money Laundering
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-Financial transactions in which criminals, including terrorist organizations, attempt to disguise the proceeds, sources or nature of their illicit activities -Facilitates a broad range of serious underlying criminal offenses and ultimately threatens integrity of financial system -Process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source -Three steps: placement, layering, integration -Placement = act of introducing dirty money into financial system in some way -Layering = act of concealing source of money by way of series of complex transactions and bookkeeping gymnastics -Integration = act of acquiring money in purportedly legitimate means
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Monopoly
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-WorldCom MCI -AT&T Bell system had monopoly—best communication system in world -People went to congress to break up the monopoly -Exclusive possession or control of the supply or trade in a commodity or service
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Murphy Village
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-Clan criminal family--have own town area -Everyone is related to everyone else -Closed off area -Big beautiful homes -Making money off of elaborate scams -St. Edward's murphy Village church -Gypsies
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Mystery Shopper
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-Ads online to get victims to pay money to register to become a mystery shopper \"you send 5000 and keep 500\" -First job is to evaluate \"money transfer service\" = receive check with instructions to deposit it in personal bank account, withdraw that amount in cash, and wire it to third party = check fake and by the time you realize it the money is gone -Advanced Fee Scam
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Non Trespassory Theft
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-Embezzlement = nontrespassory theft—criminal conversion of property received by wrongdoer in nontrespassory manner—usually an element of trust present and conversion of property is breach of trust -Larceny = Trespassory (nonconsensual) taking and carrying away of personal property with intent to permanently deprive possessor of the property
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Nouveau Riche University
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-Jim Piccolo—real estate university/investment educational company -Nouveau Riche renamed -Not really accredited -Pay a lot of money for a degree (not a lot of education involved)
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Obstruction of Justice
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-Corrupt or by threat of force or by any threatening letter or communication, influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice -Intending to interfere with official proceeding (destroying evidence or interfering with duties of officers) +Must: -Have specific intent to obstruct/interfere with proceeding -Know that a proceeding was actually pending at the time -Must be a nexus between defendant's endeavor to obstruct justice and proceeding and defendant must have knowledge of the nexus -Engaging in any act that interferes with the investigation or prosecution of a crime
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Offshore Accounts
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-Moving wealth and money to accounts in other countries to hide/launder money -Legal—but have to disclose foreign accounts
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Perjury
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-A crime that occurs when an individual willfully makes a false statement during a judicial proceeding, after taking an oath to speak the truth
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Phrenology
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-Psychological theory based on belief that certain mental faculties and character traits are indicated by configurations of the skull -Founded by Dr. Franz Joseph Gall (1820s) -Relationship between head shape, personality, and natural talents -Head examination machine
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Ponzi Scheme
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Have money coming in to pay original investors = need new money coming in all the time or it will fall apart
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Price Fixing
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Agreement among competitors that raises, lowers, or stabilizes prices or competitive terms—almost always illegal
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Psychic Readings
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-Gypsy scams frequently -Have people working together to gain access to information -Get you to keep paying more and more money to get services - -Intimidation, fear, say you are cursed -Take advantage of trust and vulnerability
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Quixtar (IBO)
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Quixtar (used to be Amway/Alticor) How it works: You are an IBO (independent business operator) The bait: flush that stinkin' job! Factors favoring white collar crime: Ignorance/gullibility, Greed, Financial despair, Trust The truth: Doesn't consider market saturation--if everyone does this = there will be no one left to buy the products who aren't part of the group Price point - charges outrageous prices that encourage you to buy in bulk to get commissions that mount to pennies on the dollar Promotions promise: make you tons of money (luxury homes, fancy cars, yachts, planes, etc.) How it works: get percentage of orders placed by those below them. In reality: Almost 99.9% will never make any real money. The only people actually making money are making it on books, tapes, seminars (not by selling the products) Tipoffs: -We have a \"system\" that will make you rich -We will share a \"little known secret\"
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RFID Theft
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-Using RFID technology in credit cards to skim information using RFID readers and steal identity/money -Readers take information off of CC magnetic strips while the CC are still in the victims pocket/purse/etc
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RICO
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18 USC 96 (1961) The Gangster or Mafia Act/Organized crime act Government/FBI realizing that big money crimes tied to a variety of connected people - huge organized networks of crime To break networks of crime down, had to have act to tie them together and bring down the group -State RICO statutes too RICO -A person who has committed at least 2 acts of racketeering activity form a list of 35 crimes 27 federal and 8 state crimes within a 10 year period -Any violation of state statutes against: Gambling, murder, kidnapping, extortion, arson, robbery, bribery, dealing in obscene matter or in a controlled substance -Bribery counter fitting theft embezzlement fraud dealing in obscene matter obstruction of justice slavery racketeering gambling money laundering murder for hire Anything where you bring 2 or more people together = conspiracy Federal criminal code title 18 -Embezzlement of union funds, bankruptcy fraud or securities fraud, drug trafficking, criminal copyright infringement, money laundering, acts of terrorism, bringing in/aiding/assisting aliens in illegally entering the country
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Robert Courtney
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-Pharmacist who took cancer treatment medicine and diluted it—then sold it as full strength -Product tampering, drug adulteration, drug misbranding -$8.5 million in profits, caused 5 deaths, 17 years in prison -Didn't have criminal \"intent\" element to be guilty of homicide or manslaughter -No deliberate intent to commit murder, no premeditation or willful act, no malice aforethought
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Russian Bride Scams (Elements)
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The approach, grooming the victim, asking for money/setting the hook, the disappearing act How they steal your money: -You sign up and pay for credits to pay for the service to hook up with the Russian women -Correspondence credit, flower delivery, video chats, romantic tours, translation -They get your credit card number, you don't know if any of this stuff actually happens -Tours of Russia/Ukraine so you can meet Russian brides -Most girls in databases are fakes--only have a few paid escorts to go on dates with every man -The actual girls are only in it for the money, not for love -The guys pay for everything and are taken advantage of (because they are emotional and vulnerable) Tipoffs: -She contacts you first, pictures look canned, long letter with endearing terms, she turns down your suggestion of visiting, -Profiles start with poor spelling and grammar and a cliché -Profile picture descriptions pull up results with different names, locations, photos in Google -Using generalizations, complaining about marriages, dark past -Pictures/profiles different from location - originates in Mari El -Mass mailing to everyone on the site -Email IP address from Mari El or another area known to produce scammers
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Salt Lake Winter Olympics
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-Tom Welch & Dave Johnson 1998 Bid -Welch and Johnson flew to Europe to meet with international Olympic committee -Convinced taxpayers in Utah to build $59 million sports venue without guarantee of winter Olympic games =1998 games went to Japanese - better at bribes 2002 bid -Prior to 1998 SLOC gave out Stetson cowboy hats to Olympic committee as bribe -SLOC (salt lake Olympic committee) gave millions to Olympic committee: -Scholarships, All expense paid ski trips, Plastic surgery, Real estate deals, Rumored professional escorts, Cash bribes The Scandal: -DOJ, IOC, USOC, SLOC -Welch and Johnson Resign -DOJ files 15 charges of bribery and fraud - acquitted of all charges -10 members of IOC expelled, 10 more sanctioned -Stricter bidding laws put in place -Allegations that Atlanta, nagano, and Sydney all used creative bid tactics If neither Welch nor Johnson benefited personally for 2002 winter Olympics, did they commit bribery? -Bribery: money, goods, services, information, anything of value offered with intent to influence the actions, opinions, decisions of another Defense or excuse 1. No bribes of trying to buy votes 2. Process of campaign to influence votes and they did it but disclosed everything to board 3. Conspiracy? 4. Buying OC members vote different from influencing members vote?
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Scam Artist Tools
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1. Ignorance on the part of the victim 2. Vulnerability-mental/physical pain, desperation, etc. 3. Greed and human nature-want to believe others 4. Despair—financial, physical, mental
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Security Alert
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-Bogus Emails -Authorization/Clearing/Settlement Department -Designed to get your account information (card number, authorization code, sign on and password) and infect your computer using a phony link -Used actual security alert to create the phony version -Get to site and computer starts freaking out telling you that you are infected with a virus -Challenge for law enforcement: -not enough people trained to track these transactions
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Silk Road
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CREATED BY ROSS ULBRICHT -Buy drugs, lab supplies, digital goods, services, money, weapons, food, electronics, books, medical stuff, XXX -All in bitcoin $$ -Guns and ammo -Diet pills -Drug dealers, assassins, pedophiles, terrorists, hit men
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Deep Web
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-Scams -Computer viruses, bots, worms, Trojans -FBI, CIA, NSA, state and local law enforcement scan for users and have honeypot nodes -Nodes they set up with illicit services run by FBI or National security agency = they get you there -Malware - with key logger which can steal passwords -Track key strokes and keep track of them -FBI tracks this stuff unless proxies are used -Have to download specific software to get down there -A web page that is not indexed by a search engine -Much larger than www -Provides anonymity -Accessed using TOR
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Stocks V Bonds
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-Stocks represent partial ownership of a company -Bonds are loans = lending money to bond issues -Coupon = interest -People invest in bonds because it is safe
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Travel Scams
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Travel Wise: offers free lodging if attend time share seminar but never refunded ADVANCED FEE Cancun Scam: offer 5 star all-inclusive stay for $300/person. Actually costs $1300+, not 5 star, not all inclusive BAIT AND SWITCH Picture scam in middle east/asia
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Unauthorized Use of Access Device
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-Credit card numbers are access devices -Identity theft/internet fraud/wire fraud -Unauthorized = lost, stolen, expired, revoked, canceled, or obtained with intent to defraud -Access device = any card, plate, code, account number, electronic serial number, mobile identification number ,PIN, or other telecommunications series, equipment, or instrument identifier, or other means of account access that can be used alone or in connection with another access device -To gain money, goods, or any other thing of value, or that can be used to initiate a transfer of funds
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United Health Group
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-Large insurance group -Problem: controlled database from which database for reasonable charges for doctor bill -Reasonable and customary costs = they only pay a percentage of what they think the bill should be not what the bill actually was -INGENIX = database of acceptable costs (owned by United Health) -Denied that ownership of Ingenix was a conflict of interest -No criminal charges, no restitution, no jail
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US Sentencing Commission
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-Entity responsible for developing strategies to promote fairer sentencing at the federal level through development of sentencing guidelines -Created as part of Sentencing Reform Act of 1984—to remedy individualized disparity in federal criminal sentences and to equalize sentences for street criminals and white collar offenders -Guidelines promoted imprisonment for white collar offenders because incarceration was seen as the most effective deterrent for white collar offenders -Increased probability of imprisonment and length of sentence for most white collar offenses
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Vapor Ware
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-Technology or products that are announced/promised but aren't backed by actual products—spectral nature and essentially vanish into thin air before consumers see them
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Victor Lustig
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-Sold Eiffel tower twice without getting caught -Money box scam (Rumanian Box) -Sold box with series of handles and levers that took 6 hours to copy and print 1 $100 bill (and loaded it with two real $1000 bills) -Scam—made $30,000 for $2000 in bills
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Walter Collins and Imposter
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-Walter Collins = 9 year old boy who disappeared (was kidnapped by the chicken coup murderers) -Gordon Northcott and his mother—charged with sexually assaulting and murdering 11 children in Riverside County -A boy claiming to be Walter turned himself in to authorities in Illinois - cops pressured the mom into believing it was him -Actually Arthur Hutchins of Iowa—ran away and wanted to be an actor—thought it was a good job
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White Collar Crime Characteristics
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-Victimization: diffuse, spread over many victims -Investigation: limited resources, problem of technology, not a policy priority, cops not trained -Prosecution: lack of reporting and defining, civil and criminal prosecution low priority -Sanctions: small fines, big payoffs
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White Collar Defenses
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-I did not know what I was getting into -No one was hurt -Statements conduct were technically legal truthful (hiding behind fine print) -Ordinary business practices -Honest but ignorant CEO (Bernie Ebbers) =I didn't know my accountants were cooking the books-it's just the way we did things -Dedicated but Overworked Public Servant (scooter Libby) -I forgot, too busy, wasn't paying attention
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White Collar Crime Definition
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Violation of the criminal law by a person of the upper socioeconomic class in the course of occupational activities Upper socioeconomic class defined by wealth, respectability, and prestige Most common characteristic is violation of trust Also includes deception
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White Collar Crime/Corporate Crime
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-Intermingled with legitimate behavior (to launder money) -Victimization tends to be diffused-harm spread over a substantial number of victims -SD got into Credit Card business - 25% interest = Citibank came in =10 million people and boost interest up 1% = a lot of money -Money sums tend to be large -Group confidence and trust (many Jewish investors in Bernie Madoff) -Rarely prosecuted and rarely convicted and penalties light -Not heavily stigmatized = don't acquire criminal identities =Not like sexual assault and on registry -Arrests are rarely made relative to incidence
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White Collar Crime Elements
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1. Deception 2. Violation of trust 3. Uninformed victims 4. Ignorance and greed of victims 5. Small amount of money from large amount of people
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White Collar Crime Types
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-Bank fraud: +engage in an act or pattern of activity where purpose is to defraud a bank of funds (check kitting, no account check) +Banks guilty of \"run-through\" charges = run through 3-4 times a day to get overdraft fees +Multiple insufficient funds in same day -Forgery—Passes false or worthless instrument such as counterfeit security or check with intent to defraud or injure -Bribery—Anything can be used to influence & You can be busted for offering or accepting -Embezzlement—Person entrusted with money or property appropriates it for own use and benefit -Extortion—Illegally obtains property or money through threat or violence -Blackmail—Demand for money in exchange for not being exposed (secrets) -Investment schemes—Victim contacted by actor who promises to provide large return on small investment -Kickback—Person who sells item pays portion of purchase price to buyer/Get something for giving something
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Wire Fraud
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Fraud that takes place over the phone lines or involves electronic communication—four legal elements: -Defendant created or participated in a scheme to defraud another out of money -Defendant did so with intent to defraud -Reasonably foreseeable that the defendant would use wire communications -Defendant did in fact use interstate wire communications (telephone, electronic communication [fax machines or internet], television, etc.) Typical frauds: using for personal financial information to use CC or transfer money from bank account—telemarketing fraud, phishing, etc.
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Your Travel Biz (YTB)
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Your Travel Biz/ YTB travel network MLM Scam -Over 200,000 people sucked into the scam, California AG went after YTB in court -Only 4% of people make any money -Attracts people because they are broke, want to work from home, want to make money work for them Travel Scam -Customers pay for vacations at discount, never receive services booked -Total scam
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