U.S. Post Office to Crack Down on International Email Fraud

The e-mails arrive from Nigeria, Russia, Holland or other countries. They assert inheritances, political strife, long lost loves, and some have resorted to death threats. The common theme, however, is that they all need to get money out of whatever country they are in and if you help, they promise to let you share the bounty.^[1] It would seem easy to write this off as a bogus piece of spam, but thousands of people believe these are real and lose, on average, $3,000 to $4,000 each.^[2]

Hoping to stem the losses, the U.S. Postal Inspection Service announced a massive international crackdown in which more than 540,000 fake checks with a face value of $2.1 billion have been seized.^[3] There have been 60 arrests in the Netherlands, 16 in Nigeria and one in Canada, the Postal Inspection Service said, and the effort is continuing.^[4]

Most of the cons start with e-mails telling of an inheritance or lottery win and ask the victim to help bring the money to the United States.^[5] The victim is asked to cash a check that comes in the mail and to send part of the money back to the person sending it, then that person disappears with the money and the original check bounces, leaving the victim with a loss.^[6]

Many of the cases originate in the Netherlands, where West African con artists operate from Internet cafes, said Johan Van Hartskamp, commissioner of the Amsterdam police. In what he called ''Operation Dutch Treat,'' police have arrested 60 people there, with three extradited to the United States and four more facing extradition.^[7]

This crime could possibly fall under email fraud, mail fraud, or wire fraud because it uses all those mediums to commit the fraud. Specifically mail fraud is an act of fraud using the U.S. Postal Service, such as making false representations through the mail to obtain an economic advantage. As actually defined by 18 U.S.C. § 1341, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.^[8]

Similarly wire fraud would also cover the aforementioned crimes because wire fraud, which is covered under 18 U.S.C. §1343, is the act of having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.^[9]

Federal criminal defense attorney Douglas McNabb has previously written about the federal crime of Email fraud in his blog, here

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^[1] Randolph E. Schimd, Post Office Cracks Down On Fake Check Scam, Associated Press Newswire, October 3, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id., So far this year, averages of 800+ people a month have filed complaints about such scams.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] 18 U.S.C. § 1341(2007).
^[9] 18 U.S.C. §1343 (2007).

Email Fraud Surfaces in West Virginia

"I have been hired to kill you……I watch you everyday since the past two weeks and I know where you go and when you come back and everything you do. Do not dare me….but pay the ransom, and I will let you go and even send you the pictures of the person [who paid for the hit.]”^[1] That is the text of an email that has been sent to dozens of people in an email fraud scheme discovered in West Virginia.^[2]

The recipient of this email was Paul Rowley, a 76-year-old retired coal plant foreman from Boone County, WV., was unsure of what to do so he forwarded it to his daughter, who, in turn, contacted the attorney general's office - and learned about an emerging internet scam.^[3]

"We started researching it, and that's when we realized that this sort of thing has been going around since 2006," Deputy Attorney General Jill Miles of the office's Consumer Protection Division said Friday.^[4]

According to the FBI, Rowley may be the first West Virginian targeted, however more than a hundred people elsewhere in the country have been similarly threatened; the Internet Crime Complaint Center, a joint effort of the FBI and the National White Collar Crime Center, began receiving complaints about the scam in December and believes the e-mails come from outside the U.S.^[5]

"What's really frightening is that some of these people have gotten e-mails with identifying information, like the name of their child…but as far as I've been able to tell, no one has given any money," Miles said.^[6]

Attorney General Darrell McGraw issued a warning about the scam Friday, urging consumers not to respond to such e-mails but instead file a complaint with the Internet Crime Complaint Center, or IC3.^[7]

E-mail Fraud
E-mail fraud is covered under 18 U.S.C. § 1037. This statute makes it illegal for a person to, in or affecting interstate or foreign commerce, knowingly: (1) accesses a protected computer without authorization, and intentionally initiates the transmission of multiple commercial electronic mail messages from or through such computer;^[8] (2) uses a protected computer to relay or retransmit multiple commercial electronic mail messages, with the intent to deceive or mislead recipients, or any Internet access service, as to the origin of such messages;^[9](3) materially falsifies header information in multiple commercial electronic mail messages and intentionally initiates the transmission of such messages;^[10] (4) registers, using information that materially falsifies the identity of the actual registrant, for five or more electronic mail accounts or online user accounts or two or more domain names, and intentionally initiates the transmission of multiple commercial electronic mail messages from any combination of such accounts or domain names;^[11] or (5) falsely represents oneself to be the registrant or the legitimate successor in interest to the registrant of 5 or more Internet Protocol addresses, and intentionally initiates the transmission of multiple commercial electronic mail messages from such addresses.^[12]

Federal criminal defense attorney Douglas McNabb has previously written about the federal crime of Email fraud in his blog, here

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^[1] Lawrence Messina, Death threat e-mail scam hits W.Va., AG warns, Associated Press Newswire, August 31, 2007, available at available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] 18 U.S.C. § 1037(a)(1)(2007).
^[9] Id. at §1037(a)(2).
^[10] Id. at §1037(a)(3).
^[11] Id. at §1037(a)(4).
^[12] Id. at §1037(a)(5).

Soloway Denied Bail: Update

U.S. Magistrate Judge James P. Donohue said Robert Soloway, of Seattle, should remain in jail until his trial scheduled for Aug. 6 because he has minimal ties to Washington state and has family in Sweden.^[1] "These are allegations of cyber crimes that have no geographical borders......It's just as easy to continue these actions in Sweden as it is in the United States." Donohue said.^[2]

Donohue continued, asserting that Soloway's previous actions demonstrated an unwillingness to abide by court orders, citing a cases in the past where Soloway continued his spamming even after Microsoft Corp. won a $7 million civil judgment against him in 2005 and a small Internet service provider in Oklahoma won a $10 million judgment.^[3]

Soloway's attorney, Richard Troberman, wrote in a court filing that the government's evidence that Soloway would flee was "woefully short on facts," and asserting that, in fact, Soloway has only traveled out of the country with his parents.^[4]

Soloway, who was given the moniker "Spam King" by federal investigators, was arrested May 30 on 35 charges including mail fraud, wire fraud, aggravated identity theft and money laundering.^[5] Mail fraud, wire fraud and money laundering are punishable by up to 20 years in prison; the government is also seeking $773,000 as proceeds of Soloway's activities.^[6]

We have previously discussed Money Laundering, here; Mail Fraud, here; Wire Fraud, here; and Identity Theft here.

We have also previously written on the case of Robert Soloway in this blog, this can be accessed here.

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^[1] Annie Flanzraich, No Bail for Alleged 'Spam King', The Associated Press Newswire, June 13, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.

Top Spammer Arrested; Soloway

Robert Alan Soloway has been described as one of the world's top spammers; he is one of the people who fills your email in box with junk everyday.^[1] He was arrested in Seattle, Wednesday, May 30, and federal authorities believe that this will lead to an immediate, perceptible decrease in the amount of junk e-mail flying around the Web.^[2] ''He's one of the top 10 spammers in the world,'' said Tim Cranton, a Microsoft Corp. lawyer who is senior director of the company's Worldwide Internet Safety Programs. ''He's a huge problem for our customers. This is a very good day.''^[3]

Soloway's arrest came a week after a federal grand jury returned a 35-count indictment charging him with mail fraud, wire fraud, e-mail fraud, aggravated identity theft and money laundering.^[4] In court Wednesday afternoon, Soloway pleaded not guilty to all charges; he has been accused of using networks of compromised computers to send out millions upon millions of junk e-mails.^[5] It is alleged that he has been doing this for 4 years, and he continued his activities despite a $7 million civil judgment against him in 2005 won by Microsoft, and another by Robert Brauer, the operator of a small Internet service provider in western Oklahoma, who won a $10 million judgment.^[6]

The case is the first in the country in which federal prosecutors have used identity theft statutes to prosecute a spammer for taking over someone else's Internet domain name, and it would mean at least an extra two years on Soloway's sentence if he is convicted.^[7] He could face decades in prison, though prosecutors said they have not calculated what guideline sentencing range he might face.^[8]

However despite the arrest, junk e-mail continued to land in mailboxes around the world Thursday, May 31.^[9] Even if Soloway is ultimately convicted and his operations shuttered, spam experts say dozens are in line to fill the void. This is mostly a symbolic arrest, and it is unlikely to significantly effect the spam traffic worldwide.^[10]

Soloway, was once on a top 10 list of spammers kept by The Spamhaus Project, an international anti-spam organization.^[11] Others have since topped him, mostly based in Russia and other countries out of reach of U.S. or European law.^[12] "Most of the Russian gangs seem to have a lot more freshly hijacked computers and are able to deliver much more spam into people's inboxes," said Vincent Hanna, a European investigator for Spamhaus.^[13]

Aggravated Identity Theft
Aggravated identity theft occurs when the crime of identity theft is coupled with another felony, here bank fraud. Under 18 U.S.C. § 1028A, if a person knowingly and unlawfully transfers, possesses, or uses a means of identification of another person in conjunction with the commission of a set list of felonies, that person will be punished as those felonies provide and that person will additionally be imprisoned for 2 years. If the felony happens to be a terrorism offense, that person will receive an additional 5 years of imprisonment.^[14]Furthermore, that person will not be placed on probation, nor will the term of imprisonment run concurrently, unless the court has been given discretion to do by the Sentencing commission.^[15]

E-mail Fraud
E-mail fraud is covered under 18 U.S.C. § 1037. This statute makes it illegal for a person to, in or affecting interstate or foreign commerce, knowingly: (1) accesses a protected computer without authorization, and intentionally initiates the transmission of multiple commercial electronic mail messages from or through such computer;^[16] (2) uses a protected computer to relay or retransmit multiple commercial electronic mail messages, with the intent to deceive or mislead recipients, or any Internet access service, as to the origin of such messages; ^[17](3) materially falsifies header information in multiple commercial electronic mail messages and intentionally initiates the transmission of such messages;^[18] (4) registers, using information that materially falsifies the identity of the actual registrant, for five or more electronic mail accounts or online user accounts or two or more domain names, and intentionally initiates the transmission of multiple commercial electronic mail messages from any combination of such accounts or domain names;^[19] or (5) falsely represents oneself to be the registrant or the legitimate successor in interest to the registrant of 5 or more Internet Protocol addresses, and intentionally initiates the transmission of multiple commercial electronic mail messages from such addresses.^[20]

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^[1] AP Wire, Feds in Seattle arrest man described as one of world's top spammers, Associated Press Newswire, May 30, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Anick Jesdanun, Spam Flows Despite High-Profile Arrest , Associated Press Newswire, May 31, 2007, available at LEXIS, News Library, Wire News Services.
^[10] Id.
^[11] Id.
^[12] Id.
^[13] Id.
^[14] 18 U.S.C. § 1028A (2007).
^[15] Id.
^[16] 18 U.S.C. § 1037(a)(1)(2007).
^[17] Id. at §1037(a)(2).
^[18] Id. at §1037(a)(3).
^[19] Id. at §1037(a)(4).
^[20] Id. at §1037(a)(5).