FBI: $240M Lost in 2007 From Internet Crimes

Report warns of online social networking, romance fraud schemes.


April 3, 2008— -- Internet crimes decreased slightly in 2007 but still resulted in millions more dollars being lost to fraud, the FBI reported Thursday.

The FBI's Internet Crime Complaint Center (IC3) received 206,884 complaints in 2007, down 0.3 percent from 207,492 the year before. Still, the amount of money lost by individuals increased about $40 million, or 21 percent from 2006, meaning nearly $240 million were lost to Internet crimes last year.

The report can be viewed HERE.

Internet auction fraud and the nondelivery of goods purchased on the Internet accounted for almost 60 percent of the complaints that were received by the FBI and the National White Collar Crime Center.

The FBI report noted, "As part of these efforts, many of these companies, such as eBay, have provided their customers with links to the IC3 Web site. As a direct result, an increase in referrals depicted as auction fraud has emerged."

Perpetrators use widespread e-mail chains and spamming to commit Internet fraud with a few keystrokes.

The FBI has previously warned of phishing schemes in which victims believe e-mails are from their bank or a charity but are really Internet fraudsters.

In February, fraudsters distributed e-mails that looked like they were from the Justice Department to try to obtain individuals' personal information. More than 20,000 Internet users received the hoax e-mails.

In October 2006, Internet users received hoax e-mails claiming to come from FBI Director Robert Mueller.

The FBI is hoping to warn Internet users about hoaxes and new schemes. "What this report does not show is how often this type of activity goes unreported," FBI Cyber Division Assistant Director James E. Finch said.

The report also warns about new schemes involving pet scams in which fraudsters advertise pets for sale online, and warns about social networking Web sites and online dating schemes.

"Online dating and social networking sites also have figured prominently in scams reported to the IC3," the report noted. "Fraudsters use these sites as springboards for meeting people and committing what is commonly known as romance fraud."

The report does not include information on how many cases have been referred to prosecutions or are resolved, and noted that due to the anonymity of e-mail and the global nature of the scheme, they are difficult to prosecute.

"We focus on the high-impact, more prosecutable cases," Special Agent John Hambrick, unit chief of the FBI's Internet Crime Complaint Center, told reporters.

One of those cases involved Steven and Bartholomew Stephens, who set up a Web site that used the Salvation Army's logo to solicit funds they said were going to Hurricane Katrina victims. The brothers were convicted and sentenced in Texas last November after having fraudulently taken $48,000 from people.

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