FAIRMONT — Last year, the Internet Crime Complaint Center saw dramatic growth in online fraud complaints and reported dollar losses.
IC3 just released its 2009 Internet Crime Report and held a teleconference on March 12 to announce and discuss the findings. The teleconference featured National White Collar Crime Center (NW3C) research manager John Kane, IC3 manager Greg Donewar, and FBI special agent Charles Pavelites.
IC3, located in the I-79 Technology Park in Fairmont, is a partnership between NW3C and the FBI. It was started in 2000 as the Internet Fraud Complaint Center and in 2003 took on its current name.
IC3 serves as a national repository for individuals to report Internet crime. All of the consumer complaints are filed via the Internet. IC3 then sends those individual complaints to law enforcement, works with police on case development and brings various agencies together.
Kane reported that from Jan. 1, 2009, to Dec. 31, 2009, IC3 received 336,655 complaints from the public. This number shows a 22.3 percent increase from 2008 and 1,900 percent growth compared to the year 2000.
Of the 336,655 complaints in 2009, more than 146,000 were referred to local, state and federal law enforcement for possible investigation.
The most popular fraud scheme last year was FBI scams, comprising 16.6 percent of the complaints, where the scammer pretends to be affiliated with the FBI in order to gather consumers’ personal information, Kane said. Other top complaints referred to law enforcement involved non-delivery of merchandise, advance fee fraud, identity theft, and overpayment fraud.
In addition to the FBI scheme, popular scams included economic stimulus scams, fake pop-up ads for anti-virus software, hit-man e-mail extortion scams, and astrological reading frauds.
The total dollar losses from all referred cases in 2009 were $559.7 million, which was up 110 percent from the 2008 statistics and 3,000 percent from the complainant losses in 2000.
Kane said technology is allowing criminals to take advantage of consumers in new ways. People need to understand that criminals are following the same trends as consumers are and are committing their crimes based on society’s preferences.
For instance, cell phone scams are appearing and IC3 is seeing the development of fraudulent phone applications that release some type of malware or virus. Criminals are also hacking social networking sites and starting to put dangerous links on Web pages, he said.
What makes these Internet scams so profitable is their ability to reach hundreds or thousands of people, Kane said. The collaboration between law enforcement across the country increases the chance of prosecution. The economic downturn has played a significant role in the increase in the amount of online fraud complaints. Criminals are using various work-at-home scams and investment scams in this environment.
The number of investment scams, which typically involve the highest dollar amount losses and are among the most economically damaging crimes, is rising, Kane said.
Donewar said IC3 launched some software tools in 2009, and the number of referrals to law enforcement has more than doubled as a result.
The new Internet Complaint Search and Investigation System (ICSIS), employed in January 2009, is an improved way of sending complaints to law enforcement. While the former software product, called Pyramid, required that analysts deal with each complaint individually, the new system frees up those workers because a large portion of the complaints are able to automatically be referred. Today, the casework is all done through ICSIS.
The FBI has benefited from these technological advancements and has access to a tremendous database, Pavelites said. With the complexity of cyber crime and more Internet savvy criminals, individual complaints often turn into investigations that involve multiple law enforcement agencies.
He said the FBI, for example, was involved in the investigation of a pharmacy fraud in 2008 and 2009 in which people were prosecuted and pleaded guilty. Also, the FBI has worked internationally to help track auction fraud in Romania. The Romanian police has arrested hundreds of people and prosecuted individuals related to Internet fraud.
“It’s just an advantage for us to be able to work within the IC3 to be able to help law enforcement,” Pavelites said.
For more information, visit www.ic3.gov.
E-mail Jessica Borders at jborders@timeswv.com.
