May 23, 2006 -- Law enforcement officials arrested 565 people in five countries in an international effort dubbed Operation Global Con, which has sought to disrupt criminal groups operating major fraud schemes that have generated more than $1 billion.
"We've succeeded by working together with our international allies, including authorities in Canada, Costa Rica, the Netherlands and Spain to take down even more criminals abroad," Attorney General Alberto Gonzales said today at a news conference.
There are several different schemes used, said officials, including sweepstakes offers, investment pyramid funds, Nigerian letter fraud and phishing schemes, which target computer users by copying legitimate Web sites in order to obtain personal data.
"The challenges we are facing include fraudulent telemarketers, spammers and con artists who defy national boundaries, strike from anywhere in the world, and prey on our U.S. consumers," said Federal Trade Commission Chairwoman Deborah Majoras.
Nigerian Letter Fraud
Justice Department officials estimate that about 2.8 million people have been the victims of these fraud schemes. Gonzales estimated that a wide variety of victims have been bilked of more than $1 billion. While most old-style "boilerroom" scams have traditionally targeted the elderly, the Internet has widened the scope of individuals who are targeted by fraudsters.
One trend in recent years has been the Nigerian letter fraud scheme. Victims of this scam receive letters or e-mail claiming to be from Nigerian landowners or government officials who offer the chance to receive millions of dollars, which they claim they are trying to move out of the country.
Law enforcement officials in Amsterdam recently arrested four people who allegedly perpetrated a Nigerian letter fraud against victims in New York City who lost more than $1.2 million, say officials.
According to the FBI, warning signs of fraudulent offers include callers or letter writers claiming you must act now or the offer will expire. Fraudsters will ask victims for personal information, then sometimes drain their bank accounts, hit them with credit card charges or rack up transactions on debit cards.
Another popular scheme involves telling victims they have won a free gift or vacation but that they need to pay for postal charges in order to receive the gift.
There were 96 separate U.S. investigations as part of Operation Global Con. Consumer advocacy groups and law enforcement say there has been an increase in telemarketing and Internet fraud in recent years, and victims are losing more money in the schemes.
According to the National Consumer's League, the number of telemarketing scams shot up 39 percent between 2004 and 2005, and the average loss increased from $1,974 in 2004 to $2,892 in 2005.
The attorney general called for the public to be alert and look over their records for potential fraud activity. "The fact of the matter is that those who prey on consumers know their vulnerabilities," Gonzales said. "They know their audience. They know who to go after."