FREE WIFI AT AIRPORTS AND HOTELS? MAYBE NOT SO FREE

reprinted as fair use from CNN

By Hilary Whiteman

LONDON, England (CNN) -- You're sitting in an airport lounge and seize the chance to check your e-mails before your flight departs. You log on and are tempted by a wireless Internet provider offering free Internet access. So, do you take it?

Wi-Fi users have been warned to protect their computers against potential hackers at Wi-Fi hotspots.

Security experts warn that hackers may be masquerading as free public Wi-Fi providers to gain access to the laptops of unsuspecting travelers.

All it takes, they say, is a computer program downloaded from the Internet, an open access point and a user who has ignored basic security advice.

"The difficulty for travelers is differentiating between a good Internet access hotspot and a rogue, or somebody trying to actually glean credentials from you. The issue is that you don't necessarily know the difference between a good and a bad one," computer security expert Sean Remnant told CNN.

In 2008, AirTight Networks dispatched a number of so-called "white hat" hackers to 27 airports around the world to test the vulnerability of their Wi-Fi systems. They found that 80 percent of the private Wi-Fi networks tested were open or poorly protected.

The wireless security company also found that basic services at several airports, including baggage handling systems, were vulnerable to hackers. Operators were using Wired Equivalent Privacy, known as WEP, which was found to provide inadequate protection to hackers as early as 2001.

One year after the survey was conducted, CNN Business Traveler met Remnant at London's Heathrow airport, which was not included in the original survey, to test the potential dangers to unprotected Wi-Fi users.

Watch what happened when we took a hacker to Heathrow »

Armed with a laptop, our "white hat" hacker took a seat in the crowded departure lounge at Terminal 3 and proceeded to scan the airwaves with his laptop, using a program he downloaded form the Internet called Airodump.

"It dumps everything in the air," Remnant explained. "So if I execute the command to start Airodump, instantly I'm seeing probably 20 wireless networks with four or five of those having relatively weak server security."

"There are several risks just on this screen," he continued. "One is that we actually don't know whether the public networks are legitimate or not." The original survey conducted by AirTight Networks found the most common name for rogue Wi-Fi points was "Free Public Wi-Fi."

"You'd have no idea if somebody sitting down to a laptop was a casual traveler trying to collect their email from an open port, or actually they were setting up a rogue access point," Remnant said.

"Your security guys in the airport aren't going to spot someone doing this because it's a technical thing," he added. Once connected, the hacker would have access to everything on your screen, from passwords, to bank account details, to the contents of e-mails.

And it's not just happening at airports. The rapid spread of Wi-Fi networks to cafes, hotels and even entire cities is providing hackers with more opportunities to ply their trade.

Last month, Venice rolled out what is believed to be Europe's most extensive Wi-Fi network. According to mobile media company Jiwire, there are now more than 273,000 free and pay Wi-Fi locations in 140 countries. The majority can be found in the United States, China, the United Kingdom and France. And most hotspots are located in hotels, along with cafes and restaurants.

However, the Wi-Fi Alliance, an industry group that tests and certifies Wi-Fi equipment, says the increased availability of Wi-Fi has not led to a rise in hacking cases.

"We certainly haven't seen any kind of sudden epidemic of hackers in open hotspots or anything like that," said the group's marketing director, Kelly Davis-Felner.

She said all Wi-Fi enabled devices have in-built security measures, and all users need to do is to switch them on. Users with older devices are encouraged to download WPA2, the most secure system endorsed by the Wi-Fi Alliance.

"If you're updating Facebook, or checking your personal e-mail or surfing the Web, there's really no reason at all to worry about using an open network," Davis-Felner said. "Any kind of online shopping or banking or anything that would require you to exchange sensitive data over the airwaves, then we advise people to exercise caution."

The best way to protect sensitive information is to use a Virtual Private Network, or VPN, which encrypts the data moving to and from your laptop.

Kiran Deshpande, president of AirTight Networks, had this advice for travelers: "Connect only to the networks that you trust. Make sure that your communication is secure, disconnect the wireless when you stop using it, and maintain the list of wireless connections that you use on your laptop so that you don't accidentally connect to networks that may spring up when you're traveling."

US GETTING SERIOUS ABOUT INTERNET GAMBLING

reprinted from Gaming News
as fair use

By Vin Narayanan


A federal grand jury in New York has indicted a Canadian resident on conspiracy charges for bank fraud, money laundering and operating an illegal gambling business for allegedly processing payments for online casinos.

According to the indictment filed Tuesday, Douglas Rennick has been "in the business of providing payment services for Internet gambling businesses through several companies under his control" and since 2007 has transferred more than $350 million "from a bank account in Cyprus to various United States banks in order to pay funds to gamblers in the United States."

One of the companies that Rennick allegedly used to pay online gambling customers, Account Services, is already embroiled in legal trouble. In June, federal prosecutors for the Southern District of New York (SDNY), which filed the charges in this latest case, ordered the seizure of about $33 million from two payment processors including Account Services. In July, Account Services filed a motion seeking the return of funds that were seized from their bank accounts by the U.S. Attorneys Office. Account Services has been linked to payments made to players by PokerStars, Full Tilt and UltimateBet.

Rennick is a Canadian citizen, according to a source familiar with the investigation. And the charges are the result of a larger investigation into Internet gambling that began in 2006.

If convicted, Rennick faces up to 30 years in prison for the bank fraud charge, 20 years for the money laundering charge and five years for the gambling charge. He could also be fined up to $1.75 million. Prosecutors are also seeking the forfeiture of nearly $565,000 Rennick made for allegedly processing online gambling transactions.

According to prosecutors, Rennick actively hid the fact he was processing online gambling transactions from the banks he was working with.

In opening a bank account at Union Bank of California for Account Services in February, Rennick and two unindicted co-conspirators allegedly said the business would be a "'rebate check processor' for 'large retailers' and 'auto dealerships,'" the indictment says.

Account Services wasn't the only company Rennick used to process payments for online casinos, according to the indictment.

"On or about August 8, 2007, Douglas Rennick, the defendant, opened an account in the name of KJB Financial Corporation at Washington Mutual Bank in California," the indictment reads.

"In opening the Washington Mutual account, Rennick did not disclose to Washington Mutual Bank that KJB Financial Corporation would process payments from Internet gambling companies.

"Instead, Rennick falsely and misleadingly represented to the Washington Mutual Bank 'for the following reasons': affiliate cheques (travel resellers, product resellers, advertising resellers)...rebates (reward cheques, promotional cheques)...refunds on items purchased...sponsorship cheques...(and) minor payroll."

The SDNY has been the U.S. Attorney's office most actively involved in online gambling cases.

In addition to the June seizure of alleged online gambling funds, SDNY prosecutors also ordered the arrests of NETeller co-founders John LeFebvre and Stephen Lawrence and froze $55 million of the company's funds in 2007. Both Lawrence and and LeFebvre ended up filing guilty pleas, and the money was eventually returned to NETeller customers.

Health Care Fraud Widespread

reprinted from
the American Medical Association News
as fair use

By Amy Lynn Sorrel

---

Health care fraud accounts for as much as 10% of overall health spending and is occurring just as frequently among private insurance plans as public programs, according to a recent report.

The June study out of the George Washington University Medical Center in Washington, D.C., emerges as the Obama administration is becoming more vocal about cracking down on health care fraud as a priority in reforming the health care system.

The report's authors called the issue "a systemic problem affecting public and private insurers alike, in the individual market, the employer-sponsored group market and public programs." Researchers cited fraudulent billing, kickbacks, upcoding and bundling services among the most common examples of fraud. They estimated that 80% of health care fraud is committed by health care entities, 10% by consumers, and the balance by others, including private insurers and their employees.

While the public is more aware of Medicare and Medicaid fraud because the government is required to report it to taxpayers, "perhaps the most striking examples of fraud are those that involve the private insurance industry itself," according to the study.

Researchers pointed to a January settlement by UnitedHealth Group, totaling $450 million, over allegations that the insurance firm manipulated out-of-network prices for physician services, resulting in an estimated 10% to 28% increase in costs. The Litigation Center of the American Medical Association and State Medical Societies, along with other physician organizations, had sued United, which denied any wrongdoing.

Researchers also cited several multimillion-dollar settlements by pharmaceutical companies and large hospital systems for alleged false billing of Medicare and Medicaid.

Between 3% and 10% of the nearly $2.3 trillion spent on health care in 2007 was lost to health care fraud -- a figure that, if prevented, "would have been enough to cover the uninsured," the report said. "As the national health reform legislation takes shape, keeping an attentive eye on anti-fraud provisions will be a critical element of reform."

Feds hunt for fraud at National Sports Collectors Convention

from the New York Daily News

reprinted as fair use

BY Michael O'Keeffe

CLEVELAND - Federal agents investigating fraud in the sports memorabilia business roamed the aisles of the National Sports Collectors Convention for the second consecutive year, issuing subpoenas to hobby executives for auction invoices and other records.

Two agents - one from the FBI, the other from the United States Postal Service - also questioned auction house officials, dealers and authenticators on Friday and yesterday at the National, the hobby's largest annual sports memorabilia show, held this year at the International Exposition Center near Cleveland Hopkins International Airport.

The list of executives who received subpoenas or were interviewed by the agents represents some of the biggest names and largest businesses in sports memorabilia, including Grey Flannel, Heritage Auctions, B&E Collectibles, Historic Auctions, Hunt Auctions, SportsCard Guaranty, Lelands, Professional Sports Authenticators and Legendary Auctions.

"They wanted to talk about the show," said Chris Ivy, director of sports auctions for Heritage. "That's all I can say about it."

An industry executive told the Daily News that the agents are gathering information about auction houses, dealers and authenticators who knowingly sell counterfeit jerseys, bogus game-used bats and other tainted memorabilia. The executives who received subpoenas or were questioned by the feds are not necessarily targets of the investigation, he said, but they may have information that will assist the agents in what has been a two-year probe.

The Daily News first reported in July of 2007 that the Chicago division of the FBI, whose "Operation Foul Ball" smashed a multistate autograph forgery ring during the 1990s, initiated an investigation into shill bidding and fraud by Mastro Auctions, once sports memorabilia's largest auction house. Other sports memorabilia businesses may also be targets of the two-year-old probe.

Mastro Auctions folded earlier this year, and several former employees, including president Doug Allen, bought the company's assets and formed Legendary Auctions. Allen was issued a subpoena just before the start of his company's auction Friday night at the House of Blues in downtown Cleveland.

In addition to the Chicago-based investigation, a New York FBI agent is also trying to determine if historic documents pulled from Hunt's All-Star Game auction two weeks ago - letters to baseball pioneer Harry Wright - were stolen from the New York Public Library. As the Daily News reported last week, rapper-turned-baseball historian Peter Nash has tried to link Rob Lifson of Robert Edwards Auctions to the stolen documents in what sources called a revenge campaign after Nash lost a bitter court battle with Lifson. The FBI agent, according to the sources, is investigating whether Nash or Lifson has sold or distributed stolen memorabilia, an allegation Lifson has strongly denied.

Collectors and dealers who attended the 2008 National in Rosemont, Ill., said the presence of the federal investigators at the convention caused consternation among some on hand. Mastro officials abandoned their booth, leaving just one employee to hold down the fort for much of the show.

But the dealers and collectors who recognized the agents seemed downright comfortable with them this year. The feds, young men dressed casually, looked more like sports fans than law-enforcement agents, and they moved easily from booth to booth, examining display cases.

Many dealers said the nation's tough economic times dampened attendance and spending at the National, but the recession did not seem to be an issue for many wealthy collectors.

A restored T206 Honus Wagner card, for example, sold for more than $200,000 at Legendary Auctions' House of Blues event. The winning bidder was a dealer named Chris Galbreath. Galbreath later said he purchased the card on behalf of John Rogers, the Arkansas businessman who spent $1.62 million last year on a T206 Wagner at Mastro's 2008 National auction.

One in Five Consumers Hit by Payment Card Fraud in Past Five Years

reprinted from paymentnews.com as fair use

ACI Worldwide has announced that its recent global card fraud survey found that "18 per cent of consumers questioned have been victims of credit or debit card fraud in the past five years. The research, of more than 2,400 consumers across eight countries, also found that if an individual or someone they knew was hit by card fraud, 22 per cent would change financial institutions, and a further 27 per cent would consider changing financial institutions."

In the light of these findings, and the continued commitment by financial institutions around the world to protect their customers from card fraud, ACI Worldwide has launched its Guide to “Stopping Card Fraud in its Tracks”, with contributions from Nationwide Building Society, to provide advice to fraud managers in banks to help combat card fraud and protect their customers.

The survey highlights some wide variations in fraud trends around the world. In the US and UK, 27 per cent of respondents have been hit by card fraud in the past five years, compared to only seven per cent in Dubai, eight per cent in Germany and 15 per cent in Australia, China and Singapore. When it comes to customer attitudes to card fraud, a fifth of the respondents said they are not confident their financial institution can protect them, with this number rising to over a third in China.

What’s more, almost half of respondents said that they would change banks, or at least consider it, if they or someone they knew was hit by card fraud. The least forgiving consumers are in Dubai, Brazil and Singapore, where a third would change banks, while respondents in the UK and US appear more lenient as half of all respondents suggest that it would depend on the service delivered by their financial institution following the fraud.

Pete Corrie, head of financial crime at Nationwide Building Society, comments: “The number of card payments globally has increased drastically over the past few years and, consequently, the whole industry has seen associated fraud levels go up. The Guide produced by ACI Worldwide not only highlights that fraud detection and reduction is one area where financial institutions are able to take decisive and positive action to reduce losses but also explains how financial institutions will be able to protect their image and retain the trust of their customers.”

David Nussenbaum, vice president and product line manager at ACI Worldwide, adds: “The international research we have conducted shows that although card fraud trends vary around the world, it is still a persistent problem for banks. In order to protect themselves and their customers against potential fraudulent attacks, financial institutions are looking for ways to implement effective anti-fraud strategies, while maintaining efficiency and keeping costs to a minimum. We believe that our Guide will provide some useful and practical advice.”

The ACI Worldwide research on card fraud was conducted during July 2009 in Australia, Brazil, China, Dubai, Germany, Singapore, the UK and the USA surveying a total of 2,408 respondents. To download the ACI Worldwide Guide to ‘Stopping card fraud in its tracks’, go to http://www.aciworldwide.com/stopcardfraud.

Watchdog: SEC Fulfilled Duty in Stanford Case

reprinted from AP as fair use

By MARCY GORDON (AP) –

WASHINGTON — The Securities and Exchange Commission had been actively investigating the banking business of billionaire R. Allen Stanford for more than three years before Bernard Madoff's Ponzi scheme came to light last December and has fulfilled its duty to pursue alleged wrongdoing by the financier, the agency's inspector general has found.

The SEC's decision to halt its investigation of Stanford in April 2008 came in response to a request by the Justice Department, and the agency didn't breach its obligation, according to a report by the office of Inspector General David Kotz.

The office looked into the matter after receiving complaints that the SEC should have acted more quickly and aggressively to detect and shut down Stanford's alleged $7 billion Ponzi scheme — portrayed by authorities as a major swindle in its own right yet eclipsed by Madoff's sprawling fraud estimated to have cost thousands of investors, foundations and banks worldwide at least $13 billion.

Complaints had come from Rep. Dennis Kucinich, D-Ohio, chairman of a House Oversight subcommittee, who voiced concern in February about what he called the "substantial delay" in the SEC's actions. He told SEC Chairman Mary Schapiro in a letter that the agency's handling of the Stanford investigation "raises serious questions about the (SEC's) dedication to its mission of protecting investors."

The inspector general's report did find that the SEC's "urgency" regarding its Stanford probe "increased significantly" after Madoff confessed to his long-running fraud scheme last December, with the agency telling the DOJ it could no longer wait in deference to the criminal authorities' parallel investigation. Federal prosecutors agreed and the SEC brought charges in February.

Starting in June 2005, the SEC's regional office in Fort Worth conducted an investigation into sales of certificates of deposit by Antigua-based Stanford International Bank, which promised outsized returns. The report also found that the agency's inquiry was "hampered by a lack of cooperation" from Stanford and his attorneys as well as by jurisdictional obstacles and obstruction by regulators in Antigua.

The inspector general's office "did not conclude that the SEC breached its obligations to vigorously pursue allegations of wrongdoing in the Stanford matter," the report said. It is dated June 19 — the same day Stanford was indicted and jailed on Justice Department charges that his international banking empire was really a pyramid scheme built on lies, bluster and bribery. In February, the SEC had filed civil fraud charges accusing the brash billionaire, a larger-than-life figure in the Caribbean, of luring investors with promises of improbable high returns on the CDs and other investments.

Stanford is disputing the charges, which in the criminal case could send him to prison for up to 250 years if convicted.

The inspector general's report was made public Tuesday by the SEC, which held it up as vindication of its staff's conduct of the Stanford probe. The agency has been stung by a series of critical assessments by Kotz's office in recent months and blistering congressional criticism over its failure to discover the Madoff fraud despite red flags raised to staff over a decade.

Despite the obstacles of Justice Department precedence and lack of cooperation from Stanford and others, "the SEC ultimately was able to obtain critical evidence that resulted in (its) emergency action in February 2009 to halt the sales of the CDs and seek the return of funds to investors," agency spokesman John Nester said in a statement. "The (SEC) is grateful for the professional expertise and tireless devotion demonstrated by its staff in the Stanford investigation."

Kotz, who has been examining the agency's conduct in the Madoff scandal, is expected to issue a critical report in the coming weeks.

Madoff --- Can't Believe Fraud Lasted So Long

reprinted from Reuters as fair use

Bernard Madoff, the financier convicted for Wall Street's biggest investment fraud, was surprised his $65 billion Ponzi scheme was not uncovered sooner, he said in his first interview since entering prison.

Madoff, the disgraced 71-year-old Wall Streeter who drew 150 years' prison time for the fraud, expressed remorse and talked candidly to a pair of lawyers suing him on behalf of investors, according to news reports of their jailhouse meeting on Tuesday.

San Francisco attorneys Joseph Cotchett and Nancy Fineman met with Madoff at the North Carolina prison where he was taken two weeks ago after pleading guilty, the Associated Press and ABC News reported on Tuesday.

"There were several times that I met with the SEC and thought 'they got me,'" Madoff told Cotchett and Fineman, according to abc news.com.

The Securities and Exchange Commission is now conducting an in-depth review of how they missed the fraud, drawing intense criticism. The results of their investigation are expected to be released in weeks.

Cotchett and Fineman represent about a dozen investors who lost money in Madoff's decades-long scheme, an unprecedented global scam for which Madoff eventually pleaded guilty to laundering, securities fraud and perjury.

"It was an extraordinary visit. He was very candid, very open, and answered every one of our questions," Cotchett said of the 4-1/2-hour meeting.

He was "very remorseful" but looked healthy and appeared to be working out, Cotchett told the news outlets.

"I think he's not too happy to be where he is but he's certainly not complaining," said Cotchett, who set up the interview through Madoff's attorneys.

The visiting attorneys said they planned to use what they learned at the meeting in a lawsuit to be filed this week in Manhattan against Madoff and his brother, Peter Madoff, who acted as chief compliance officer, and potentially officers at some of the feeder funds that worked with Madoff, according to the reports.

Madoff said he believed securities investigators had found all the money that could have been recovered, Cotchett said in the news reports.

"But it might be in many different venues, and by that I mean I don't think that Bernie knows where all the money is" because some was paid out to feeder funds, Cotchett said.

Madoff agreed to speak with Cotchett after the lawyer threatened to sue his wife, Ruth, abc news.com reported.

"He cares about Ruth," Cotchett said.

(Reporting by Gina Keating; Editing by Gary Hill)

5 FRAUDS YOU NEVER HEARD OF

reprinted from CNN as fair use

Most alleged Ponzi schemers don't reach Madoff-like heights, but millions of dollars are still on the line.

By Aaron Smith,CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Bernard Madoff may have made headlines as the biggest Ponzi schemer in history, but there are plenty of other cases to share the limelight.

There is no exact dollar figure on how much Madoff bilked his investors, but it's been estimated in the tens of billions. Most other pyramid-style scams are run by mini-Madoffs, most of whom measure their take in the millions.

A Ponzi schemer masquerades as a legitimate money manager, using fresh cash from unsuspecting investors to make payments to more mature investors, which creates the false appearance of legitimate returns. Some promise annual returns as high as 80%.

"You see a whole range: some of them start small and build over time; some of them have got a good story and they get huge investments," said David Nahmias, U.S. Attorney in the northern district of Georgia, who has prosecuted Ponzi scams. "A lot of these schemes start with trusted people. If you see someone investing their family's money, or their church's money, then it's someone you're more likely to trust."

Here are some of the alleged Ponzi cases currently making their way through federal courtrooms across the country:

Steinger and alleged accomplices, $1.25 billion, Florida

In late 2008, the U.S. attorney for the Southern District of Florida indicted four defendants in one of the largest alleged Ponzi schemes in recent history.

Joel Steinger, a white-collar ex-con and accused ringleader, his brother Steven Steiner and two lawyers, Michael McNerney and Anthony Livoti, are accused of ripping off 30,000 investors in an elaborate life insurance scam through Fort Lauderdale-based Mutual Benefits Corp., which was shut down. All pleaded not guilty, and the case is ongoing.

"The government is simply overreaching in this case," said Jose Quinon, attorney for McNerney. "He's totally innocent of the charges in this case."

Livoti's lawyer, Joel Hirschorn, said there was no Ponzi scheme and that his client committed no crime. Steinger's lawyer Ed Shohat declined to comment. Steiner's lawyer, Richard Lubin, was unavailable.

Nicholas Cosmo, $370 million, New York

Another Ponzi scheme was allegedly perpetrated by Nicholas Cosmo, owner of two funds, Agape World, Inc. and Agape Merchant Advance, LLC, in Hauppauge, New York. Cosmo promised his 1,500 investors annual returns of up to 80%, according to the U.S. Attorney in the Eastern District of New York, who called the offer "too good to be true." Cosmo was charged with stealing -- not investing - hundreds of millions of dollars.

Robert Nardoza, spokesman for the U.S. Attorney's office, said that Cosmo pleaded not guilty and is incarcerated because he has not met bail conditions. Phone messages to Cosmo's lawyer were not returned.

Anthony Demasi, $4.7 million, Illinois

Anthony Demasi of Tsunami Capital LLC, a trader in commodity futures, allegedly told investors that one of his trading pools made a profit of 172% -- an astronomical claim by any standard. In reality, the pool had no profit at all and was part of a multi-million dollar Ponzi scheme, according to the U.S. Attorney's office in the Northern District of Illinois. The feds say that Demasi poured much of the money into his Chicago nightclubs and blew the rest on gambling.

Randall Sanborn, spokesman for the U.S. Attorney in Chicago, said Demasi pleaded not guilty and is free on bail but under home confinement. A court hearing is set for Sept. 9. Messages to Demasi's lawyer were not returned.

Anthony Vassallo, $40 million, California

At the age of 29, Anthony Vassallo is unusually young for a Ponzi defendant. In March, the federal authorities charged him with stealing $40 million from 150 investors -- many of whom he met in church. He allegedly spent his take on a $103,000 Lexus and a $24,000 donation to the Church of Jesus Christ of Latter-Day Saints in Folsom.

But Vassallo pleaded not guilty and is currently out on bail, which was posted by family members, according to the U.S. Attorney's office in Sacramento. He is due back in court on July 17 for a status report. A spokeswoman for Blackmon & Associates, the law firm representing Vassallo, declined to comment.

James Ossie, $25 million, Georgia

The U.S. Attorney's office in Atlanta charged James Ossie, founder of CRE Capital, Inc., in March with running a fast-moving but short-lived Ponzi scheme.

Ossie stole $25 million in nine months, according to the feds, who said he offered high-end investment contracts, starting at $100,000 each, and guaranteed return of the deposit with 10% interest in 30 days. But according to the U.S. Attorney's office, Ossie lost the money almost as quickly, and had only $2 million left when the scam came to an end.

Ossie pleaded guilty on May 21 and is scheduled to be sentenced on July 30, according to the U.S. Attorney's office, which said he had been indicted on 10 counts of wire fraud. According to the firm representing him, Steel Law, he pleaded guilty to one of those counts.

David Nahmias, the U.S. Attorney who indicted Ossie, said the Ponzi scammer's worst enemy is the recession.

"The economic situation kind of exposed a number of them, both because investors are asking for their money back, which tends to make Ponzi schemes fall apart, and I think investors are becoming more skeptical of claims of outrageous returns," he said.