Peter Sunde Brings Criminal Charges Against BREIN, Claims They Falsified Documents Against The Pirate Bay

from the spectrial-indeed dept

You may remember, back in July, that a Dutch court made an odd ruling against The Pirate Bay at the behest of BREIN, the local anti-piracy group. Now, there was a lot of things odd about the case. BREIN has always been quite aggressive in demanding that sites be blocked or that ISPs be forced to block sites, but this case went really far. BREIN was able to bring the case without even letting any of the four defendants (the same four who were on trial in Sweden) know about the case. However, BREIN told the court that the defendants were fairly summoned, despite no evidence that was true at all. BREIN also claimed that The Pirate Bay had launched a DDoS attack on BREIN's website, and seemed so close to the court that when the defendants themselves asked the court for the very ruling made against them, the court told them that they could only get the copy directly from BREIN.

Of course, after all this happened, a second problem cropped up. Swedish authorities did an investigation and came to the conclusion -- as the four defendants had said all along -- that those four guys did not actually own The Pirate Bay. Instead, it was a company called Reservella, information that came out to the public after the attempt by GGF to buy The Pirate Bay (which has since collapsed).

BREIN wasted little time in adding Reservella to its lawsuits... but then did something strange. It came up with a credit report that purports to prove that one of the four defendants, Fredrik Neij, is the CEO and a director of Reservella. However, there were some oddities in that credit report, and Peter Sunde (one of the other defendants, better known as brokep) began investigating and has rather detailed evidence that the entire credit report is a fake. Almost none of the information on the report checks out, and the companies listed -- including Experian, who supposedly supplied the credit report, claim that they have no record of this particular credit report at all.

Sunde is now filing criminal charges against BREIN and its boss Tim Kuik, claiming that they forged a document and used it for fraud (trying to get money out of these four defendants). As Sunde notes, such charges seem to be far more serious than inducing copyright infringement. The evidence that Sunde lays out certainly looks convincing that the document is fake, but what's still not clear is how BREIN got the document, and whether it was responsible for creating the document, or if it was merely convinced that the fake document was real from someone else.

Still, it doesn't look good for BREIN to be caught using what appear to be faked documents in its lawsuit.

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Pro Tip: If You Run A Prison, Maybe Don't Give The Guy In Jail For Computer Fraud The Job Of Reprogramming Your Computers

from the just-a-suggestion dept

Let's see.... you run a prison and you need to do some work on the computer system. Do you (a) hire a competent professional or (b) hand over the computer system to an inmate who's in jail for computer fraud, involving phishing scams? Apparently, a prison in the UK went with option (b) and then had to deal with being entirely locked out of the computer system, after the guy hacked around and changed everyone's passwords. Apparently, that prison-work program needs a few tweaks...

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Nigeria Demands Apology From Sony For Mentioning Nigerian Fraud In A Commercial?

from the really? dept

I have to admit that this story seems so bizarre that I'm not quite sure I believe it. A bunch of folks have been submitting the news that the Nigerian government is apparently so upset by a Sony Playstation commercial that it's demanding an apology from Sony for allegedly "portraying Nigeria as a home of fraud where its citizens hardly do genuine business." Must be quite a commercial right? The only problem is that the commercial does no such thing:

It just mentions, in passing, as a part of the joke of the commercial that "You can't believe everything you read on the Internet. Otherwise I'd be a Nigerian millionaire by now." I don't quite see how that implies that Nigerian citizens hardly do genuine business. It just suggests that there are Nigerian scammers out there -- which is hardly something the government can credibly deny. Hell, there are popular songs in Nigeria all about fleecing dumb Americans in online scams. Honestly, the whole complaint from the Nigerian gov't seems so odd, that it feels like part of Sony's marketing campaign...

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PR Firm Accused Of Setting Up Fake Twitter Account Of Competing Firm

from the really? dept

We've all heard about the various fake accounts on Twitter, and even Tony La Russa's misguided lawsuit over a user who put up a fake profile. However, in what appears to be a slightly more serious case of "brandjacking" on Twitter, the Citizen Media Law Project alerts us to a lawsuit involving two PR firms, with one accused of hijacking the identity of the other on Twitter. While it's a bit amusing that the PR firm who was hijacked claims its expertise is in brand management and yet didn't notice that someone else was using its brand on Twitter for two months, the fact that the IP address of whoever signed up for the account came from a competing PR firm suggests questionable intent, and certainly has the potential to be a real trademark issue.

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Apple Sued Over Gift Cards That Claim $0.99 Per Song

from the do-they-want-to-get-paid-in-gift-cards? dept

As we all know, back in April, Apple changed its iTunes pricing policy so that not all songs are $0.99. Now, some are $1.29 (and somewhere, we're told, there are a few that are $0.69). However, Apple has now been sued by a couple who claims iTunes gift cards are misleading, because they were sold claiming that iTunes songs are $0.99. The lawsuit claims that this is fraud on Apple's part, but I have a pretty difficult time believing this case gets very far.

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Proud, Bragging Spammer Alan Ralsky Pleads Guilty

from the about-time dept

Remember Alan Ralsky? He was the super proud spammer that way back in 2002 gave a defiant and proud interview with his hometown paper, the Detroit Free Press, where he showed off his home and other expensive purchases, all paid for with spam -- which he insisted was "the greatest business model in the world." So what happened? Well, the folks at Slashdot used the info in the article to figure out where he lived and started signing him up for a ton of snail mail marketing offers, overwhelming his actual mailbox. Rather than recognizing the irony, Ralsky flipped out. Apparently, it's only the greatest business model in the world when you're not on the receiving end.

It definitely took a while, but the law finally caught up to Ralsky, and he learned that "the greatest business model in the world" is actually called fraud -- and it can put you in jail. The FBI started investigating Ralsky in 2005, but he wasn't actually indicted until 2008. And, the latest news is that he's agreed to plead guilty and could face both jailtime and fines for wire fraud, money laundering and violations of the CAN SPAM Act (wow, it does sometimes work!). Of course, since Ralsky's time, spammers have gone underground and overseas. The era of the great proud American spammer who courted the press seems to be over.

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So-Called 'Friendly Fraud' On The Rise

from the what's-so-friendly-about-it? dept

Credit-card companies are looking to new technology to help them cut down on fraudulent purchases, but online retailers are looking at a slightly different problem. They say that "friendly fraud" -- when a customer purchases an item, then later disputes the purchase -- is on the rise. It's not clear exactly what's "friendly" about this kind of fraud, but it usually entails a customer ordering an item, then saying they never received it, or claiming they were sent the wrong item. Travel site Expedia says it runs into the same problem, with people purchasing travel services, then claiming -- after they've taken the trip -- that they never made the purchases. The companies are getting a bit wiser, doing things like taking photos of shipments before they're sent out, and it sounds like most people back off their claims once they're presented with some evidence of just how easy they are to debunk. The retailers cited by the WSJ seem to be saying that this is a manifestation of buyer's remorse, with people looking for a way out from credit-card purchases they've made, but that seems pretty generous. It's a little odd, since it sounds like they try to handle this stuff pretty gingerly and not upset the customers by accusing them of fraud and theft, and then using the "friendly" moniker. Friendly or not, fraud's a growing problem for online retailers and credit-card companies.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Visa Tests New Anti-Fraud Card Device, But What About The Data Leaks?

from the finger-in-the-dike dept

Visa is testing a new type of credit card that's got additional security measures built in as a means of cutting down on "card not present" (CNP) fraud -- the fraudulent sales rung up using stolen credit-card numbers and the security codes that are normally printed on the cards. Visa's new cards have a small screen on the back that displays a six-digit code when the cardholder enters a PIN on the card's keypad, making it sound like Visa has basically built in a tiny version of something akin to the SecurID, a popular two-factor authentication device for corporate computer networks. The devices generate an additional one-time password using an algorithm synced with the system on the other end; the user enters this password when they attempt to log on, or in Visa's case, make a CNP transaction. If the passwords match, the transaction goes ahead. It sounds like a good way to cut down on CNP fraud, but is it just a way to try and gloss over the massive data leaks that see millions of credit-card numbers lost out into the world? It almost seems that if these new anti-fraud cards make it to market, the party line will be "the data leaks don't matter anymore" -- but criminals will still be able to obtain credit-card numbers and make fake cards with the stolen info (for card-present fraud). It might make criminals' lives a little more difficult, but it won't make credit-card fraud impossible. Raising the level of security on credit cards is, without question, a good thing. But unless it involves doing more to stop massive data leaks, it's not enough.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Not At All Surprising: TARP Is Ripe For Fraud

from the gee...-you-think? dept

One of our complaints with the massive outlay of government spending through things like TARP and the "stimulus plan" is that they were both rushed through with little thought or oversight -- and no chance for those outside of Washington to weigh in on those plans. I'm not necessarily against all such spending, but history has shown that rushing into such spending without having a chance to think through the details is a recipe for disaster. Already, we've seen that the government has massively overvalued some assets and that the promised "transparency" has been lacking. Now, even the guy in charge of making sure that the TARP program isn't abused is admitting that, with the way it's been set up, the program is ripe for fraud. He's expecting the government to be bilked out of tens of billions of taxpayer dollars in criminal schemes, and notes that less than 5% of those receiving funds from TARP have fulfilled their obligations in letting the government know what's been done with the money. I keep hearing that the government had to do something, but that doesn't mean we needed to hand over trillions of taxpayer money in such a haphazard fashion.

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Latest Massive Fraud: Satyam Found To Be Swimming Naked

from the tide-goes-out dept

Warren Buffet's famous quote is that "It's only when the tide goes out that you learn who's been swimming naked." Over the past few months, the tide has been going out with a vengeance, and we're certainly discovering plenty of folks swimming naked. The latest, of course, is Satyam, the Indian tech company whose CEO admitted that he basically has been making up the company's financial reports for years. It turns out that about $1 billion in cash the company claimed it had... don't actually exist. That's a pretty big problem, because that $1 billion represented about 94% of all the cash the company claimed to have. Oops. It makes you wonder what, exactly, Satyam's auditors have been up to the past few years.

This might explain why the company attempted to do a highly controversial merger deal last month, where Satyam tried to buy construction firms Maytas (Satyam backwards), owned by the sons of Satyam's founders. The deal between companies in two obviously unrelated industries seemed like a pretty clear cash grab for the family -- except most people didn't realize that the cash grab was actually to cover up all the lies on the financial statements.

Of course, there are some amusing side notes to this whole thing. Just a few months ago, for example, Satyam was awarded the "prestigious" Golden Peacock award for (of all things) corporate governance. That award is now being stripped away, but it seems a little late for that. Then, of course, there was the stock analyst who claimed that Satyam was an obvious buy just after the original merger deal fell apart. Considering that the stock dropped 90% today, that seems like an awfully bad call.

Anyway, as with any downturn, it's no surprise that some of the scammers are being outed. It certainly doesn't mean that all companies are scamming, but it is a reminder that unless you're personally involved, it's pretty tough to take a company's word on what it's actually been doing with its money.

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Trying To Understand: Facebook's Lawsuit Against Power.com Makes No Sense

from the help-me-out-here... dept

Facebook has apparently sued social networking aggregator Power.com for a variety of things, including copyright and trademark infringement, unlawful competition and violation of the computer fraud and abuse act. I'm having trouble seeing how Power.com violates any of these things. Power.com, like plenty of other aggregator services, lets you bring together all your different social networking profiles in one spot. That seems like it could be valuable if you use a lot of those services. It doesn't do anything fraudulently, and it does not appear to misrepresent that it is a separate service. Users have to decide whether it's worth providing their username and password to Power.com, but it's not as if Power.com tricks anyone into doing so or does so in a misleading way. There's no confusion, so it's difficult to see what the trademark problem is about. It seems like a pretty big stretch for Facebook to also claim that showing the content from a user's profile is copyright infringement as well. Computer fraud? Please. Unlawful competition? Again, it may be (slightly) competitive, but it appears to actually improve the value of Facebook, rather than diminish it.

This is a pretty weak response from Facebook. Basically, it looks like Facebook trying to exert undue control over what other websites and services can do, and it's not clear that it has any real legal basis for doing so. It's a shame that a company like Facebook is becoming a legal bully at such a young age. I would have expected better. In the end, though, if Facebook keeps up actions like this, it will only hasten the shift to other social networks that don't try to limit what their users can do. Facebook might want to take a lesson from the eventual flop of Friendster after that social network was accused of being too controlling.

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Fry's Exec Funnelled $65 Million To Himself For Gambling Debts

from the want-to-know-why-Fry's-is-expensive? dept

Silicon Valley folks certainly know Fry's -- the electronics superstore that's probably as well known for its poor customer service as its vast selection. However, apparently a top exec at the company, who had worked his way up over the course of 20 years from a starting job as a floor sales guy has now been arrested for a massive fraud, creating kickbacks from vendors and potentially defrauding the company of over $65 million -- much of it used to pay off gambling debts (apparently he still owes a lot more -- potentially another $100 million from the sound of it) incurred by frequently taking the Fry's corporate jet to Vegas. The guy basically set up a separate front company that he funneled millions of dollars to in the form of exorbitant commissions and kickbacks from vendors. Apparently, while Fry's makes you go to hell and back to justify returning a computer component, its own internal auditing process missed $65 million going out the door.

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Perhaps Wall St. Really Is Just One Big Ponzi Scheme

from the finding-that-last-sucker dept

While we've always been pretty skeptical of the way Wall St. worked, at least it seemed like there was some semblance of reality on which it was based -- even if much of that foundation was a rickety house of cards. Yet, with the revelations coming out about Bernard Madoff's potentially $50 billion fraud, it makes you start to wonder if anything on Wall Street is real. Madoff admitted yesterday that his entire firm was "one big lie" and "basically, a giant Ponzi scheme." It appears that rather than paying investors back based on profits they earned, he was pulling money out of the principal from other investors -- and now there's basically nothing left. Not surprisingly, the firm's website touted Madoff's "high ethical standards." What's even more astounding is that no one happened to notice this was happening until he 'fessed up. At a time when one of the biggest things missing in the market is confidence, this is not going to help. Yes, there is some reality backing at least some of Wall Street, but people are going to have an increasingly difficult time figuring out what is real, and that's not going to encourage much investment. Conceptually, what Wall St. does is provide a very useful service for putting money to use where it's best needed as investment capital. In reality, it looks like there was an awful lot of fraud baked into the system. That's not good for anyone, and the fallout from this is not going to be pretty.

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How To Steal The Empire State Building

from the 90-minutes-and-a-fake-stamp dept

Consumerist points us to a story about how The Daily News newspaper in New York was able to quickly forge some documents and get the deed to the Empire State Building handed over, no questions asked. Apparently, there's really no verification process at all. As the paper points out, while most folks probably would notice this with the ESB, for plenty of other buildings it's an effective scam for someone who wants to take out a bogus mortgage (and then disappear). You would think, in this day and age, there would be a somewhat more involved process and checks before simply handing over the deeds on any building, let alone a landmark like the Empire State Building.

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Fake Engineer Tries To Get Lighter Sentence... By Faking References

from the there's-dumb-and-then-there's... dept

Well, here's a fun one. A guy who was found guilty of faking his credentials to get a job as a maintenance engineer for the airline Qantas tried to get a lighter sentence by submitted four sterling references. But... it turns out that those references were faked as well (found via the Raw Feed). The guy didn't even do a particularly convincing job faking the references either. All four were formatted the same way and signed by the same hand, and one was from the president of a sports organization... that didn't even exist. You would think, in the age of the internet that people would assume that making up entire organizations wouldn't be particularly effective.

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Entellium Execs Simply Made Up Revenue

from the well,-that's-one-way-to-hit-your-numbers dept

It always surprises me when I hear about various tech startups that eventually resorted to outright scamming. I can understand the pressures of running a startup as things get tough, but I can't ever imagine resorting to making up revenue outright. Yet, whenever an economic downturn hits, these stories start popping up. You may recall back in 2001 when the hot startup Critical Path was caught making up about 10% of its revenue. A day later, one of the biggest speech recognition companies of the time, Lernout & Hauspie, announced that its Korean division had made up almost all of its revenue. In that case, it resulted in the end of L&H completely, as well as jail time for the CEO.

It looks like we may be getting another such story. Just a few weeks ago, CRM provider Entellium was announcing new products (which they spammed us with a press release about). On October 1st, we received another email pitch from Entellium, urging us to download its software for a free 30-day trial. That same day, the company's CEO and CFO suddenly quit. A couple days later, most of the company's employees were laid off and told that the company was out of money.

The whole thing seemed quite odd, especially considering that the company had raised over $50 million, had just launched this product and everything seemed to have been moving forward. Late Wednesday, however, the details came out. It turned out that the two execs who quit, Paul Johnston and Parrish Jones had been flat out lying to its board and its investors concerning revenue for years. For example, since 2006, the company made less than $3.8 million, but told the board it brought in $15.5 million. That's not just a slight fudging of the numbers -- that's extreme fraud, which was used to help the company raise that $50 million.

The biggest question, though, is where were the board and the investors on this. It's difficult to see how investors would hand over more than $50 million without ever conducting an audit. They simply believed the two execs. It's also worth noting how the fraud unraveled. Apparently, the VP of HR was cleaning out the desk of the former head of sales, and discovered the bogus set of books that the CEO & CFO had been showing the board. She turned them over to the company's comptroller, who gave them to a board member -- which resulted in the board pretty quickly calling the CEO to let him know that they were sending over their own "contract" CFO to "check some things out." That was the point at which the two execs resigned.

You always hope that these stories are simply cases of bad seeds, and that there aren't others doing the same, but it'll be worth watching to see if we start hearing other similar stories. They seem to come in bunches.

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How Soon Until We Start Hearing Stories Of Twitter Criminals?

from the perhaps,-but... dept

You may have recently heard that story of a bank robber who, rather ingeniously, used Craigslist to create a diversion so he could get away with his crime. He put up a message, asking a bunch of people to show up for construction work, and told them what to wear, very specifically. He had them gather near the bank he was planning to rob -- and then wore the same outfit. After robbing the bank, police and security then saw a mob of folks all matching the same basic description as the bank robber. So far, the guy seems to have gotten away with the crime.

However, it's only a matter of time until others start thinking about ways to make use of social media for crime. This isn't to blame social media at all (though, expect the press -- and possibly politicians -- to falsely focus on the tech), as it's just a tool. But it is worth thinking about how criminals might use these technologies, if we want to think about ways to prevent the worst abuses. Jeremy Wagstaff has an interesting post where he wonders if Twitter will become a source of info for scammers and criminals, who gather the info people reveal about themselves to use in a crime. He's riffing off of a David Weinberger blog post, which jokes about how the opposite of the Do Not Disturb sign in many hotels says something along the lines of "Make Up My Room Now." As Weingberg astutely notes, some could interpret this as actually saying: "I'm Out, So This Would Be a Good to Rob Me, Especially If You Are Squeamish about Violence."

Wagstaff wonders if the same is true about status updates on Twitter, Facebook and other social sites -- and someone announcing that they're away from home opens up an opportunity to a burglar to break in. To some extent, I would imagine that could be true -- and I'm almost positive we'll eventually read some story somewhere about a criminal using data on Twitter to do something -- but it's difficult to see how most Twitter messages are really that revealing. It's not that difficult for a potential burglar to just canvas a house and see that the inhabitants go to work every day, and they get the same benefit, totally unrelated to the status message. Also, I'd argue that what a status message leaves out may turn out to be more important than what is put in. For example, my Twitter status might note that I'm traveling and in Chicago right now... but might not mention the fact that a friend, who spent a few years in the army, is housesitting for me and watching my pets. Anyone who relies solely on the Twitter message to decide where to rob, might be in for a bit of a surprise.

In some ways, this whole thing is similar to the "fear" when answering machines first showed up. There were reports that warned people not to say "we're not in right now" as people were told that criminals might use this to figure out who to rob. Instead, they were told to say "we can't get to the phone right now," as a transparent sort of hedge. Of course, the whole thing was silly. It was hardly an efficient way for criminals to find out who to rob, and the actual risk was quite low. The same thing is likely true of any "threat" of criminals using Twitter.

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New Zealand Hacker Released As Police, Judge, Prosecutors All Praise His Mad Hacking Skillz

from the resume-builder dept

Well, here's an odd one. A kid in New Zealand who was arrested for creating software used by an online organized crime group to access people's usernames, passwords and credit card details has been released and the charges against him dropped. What's odd about it is all the praise being heaped upon 18-year-old Owen Thor Walker. Prosecutors raved about how the info-grabbing program he wrote was "one of the most advanced they had seen" and the judge said that convicting him would "jeopardise a potentially bright career." Meanwhile, the police noted they "were interested in using his skills to fight cyber-crime." While we usually see police and judges overreact to hacking cases, talking about how dangerous some kid and some code can be, this almost seems like the opposite. Not that the kid should necessarily have been convicted, but all this praise just seems like we've entered backwards-for-a-day world.

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Man Sues Newspaper For Laying Off Reporters

from the everything-must-stay-the-same,-always dept

It's no secret that plenty of newspapers have been cutting staff and even the size of their papers in recent months. It's really a reaction to the fact that newspapers spent way too many years in denial that they were no longer the only news sources in town. So now they finally have to adjust, and one first step is shedding some overhead. However, one newspaper subscriber to the News & Observer in North Carolina is suing the paper over its recent cuts. It sounds like it's mostly just a publicity stunt, but Keith Hempstead, a lawyer (and former reporter), says he renewed his subscription in May, just before the paper announced cuts. Thus, he claims, he's getting less than what he was promised when he subscribed -- and that's somehow fraud. It's doubtful this lawsuit will go anywhere and the "point" Hempstead is making actually seems backwards. Marketplaces change and companies in those marketplaces need to change to keep up with the market. Suing them for changing is hardly going to encourage newspapers to embrace necessary change.

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Is It Fraud If You Collect One Penny Legally Over And Over Again?

from the legal-conundrum dept

If you've ever needed to associate your bank account with some online service (such as PayPal), you know the drill: you provide the necessary info to the service, and a few days later, it makes two small deposits into your account (usually between 1 and 5 cents or so). You then have to report back the amount of the deposits to prove you own that account. It's a relatively cheap way for the services to confirm the account details. However, to one man, it was also an opportunity to make some cash. He set up automated scripts to basically use just such a system to open thousands of accounts and collect approximately $50,000 of these micro-transactions. As the guy noted for at least one of these accounts (with Google's CheckOut system), he read through the terms of service and this did not appear to violate the terms. In fact, it does make you wonder how illegal this really was. The fact that the guy used fake names (of various Mike Judge characters, which seems like a nod to the "skim a penny" computer hack from Judge's movie Office Space) probably hurts his case -- but it still raises some questions. If there are no limits on accounts and no other terms of service that prevent this sort of action, what exactly about it is illegal? Is there a certain number of accounts that you can open before it's considered fraud? Or does it have to do with his intent -- which was solely to get the microdeposits, rather than to use the accounts?

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