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Tag: scam

FBI Warns of Scam in Which Parents Are Told Their Children Have Been Kidnapped

Smart PhoneBy Steve Neavling
ticklethewire.com

The FBI is warning residents in several states about a terrifying scam in which mortified parents are told their child had been kidnapped and won’t be released until they pay ransom.

Calling it “virtual kidnapping for ransom,” law enforcement said a network of suspects in the U.S. and Mexico is extorting money from parents by convincing them their loved one was taken hostage, even though they weren’t, the Los Angeles Times reports. 

Valerie Sobel received one of the calls two years ago. The caller said. “We have your daughter Simone’s finger. Do you want the rest of her in a body bag?”

Following the alleged kidnapper’s demands, Sobel wired $4,000 to the caller to save her daughter. Turned out, her daughter was fine and never kidnapped.

Thousands of parents in several states have received similar calls.

The FBI said it can’t stop the scam with arrests alone, so the bureau is working with local police agencies to educate people on the scam.

Robin Hood in Reverse — A $1.1 Million Scam

2000px-robin_hood_logo-svg

By Greg Stejskal
ticklethewire.com

In 2005 Female Jones (not her real name), an indigent woman living in public housing in Ann Arbor, Mich., discovered she wasn’t eligible for federal housing assistance. The reason she wasn’t eligible was because it appeared she was already receiving “Section 8” voucher payments. Jones wasn’t aware of receiving any assistance. So it was assumed that there was a bureaucratic snafu, but an investigation revealed something far more nefarious.

Section 8 vouchers are so-called because they are authorized under Section 8 of the Federal Housing Act of 1937, part of the New Deal legislation designed to help people suffering the effects of the Great Depression. In 1974 the Housing Act was amended to create the Section 8 voucher program. Low income people would be eligible for vouchers that would pay a percentage of their rent in approved housing facilities. The money for the program would be provided by U.S. Department of Housing and Urban Development (HUD), but the program would be administered by the state and local public housing agencies.

There was only a limited amount of funding available. So not all eligible people would receive vouchers. In Michigan a waiting list existed and waits of 3-6 years were not uncommon.

Greg Stejskal

Greg Stejskal

The voucher payments were made directly to the indigent tenants’ landlords to minimize the opportunity for fraud. Housing voucher agents working for the state prepared the application forms for the indigent applicants. These agents obtained background information and determined whether the applicants met the eligibility requirements.

Female Jones’ caseworker determined that she was enrolled in the Section 8 program, and voucher payments were being sent to Washtenaw Payee Services, a company that appeared to receive Section 8 payments on behalf of several landlords in Washtenaw County. Because the woman was unaware of the payments, and they were not being received by her landlord, the caseworker reported the problem to the Michigan State Housing Development Authority (MSHDA).

MSHDA’s initial investigation indicated there might be some fraudulent activity. As the Section 8 program is federally funded, they reported their concerns to the FBI, and a joint FBI/MSHDA investigation was begun.

Although Washtenaw Payment Services (WPS) appeared to have an office with a street address, it turned out to be a private mailbox service which is often a red flag in a fraud investigation.

The bank records for WPS were obtained via subpoena. Those records showed that WPS was formed in 1990 when LaToya Cotton filed business papers with Washtenaw County and opened a bank account. Since 1994, about 11 years, WPS had been receiving Section 8 voucher payments ostensibly for landlords of low-income tenants enrolled in the program.

The striking thing was the founder of WPS, LaToya Cotton, was a Michigan housing agent responsible for enrolling prospective low-income applicants for Section 8 vouchers. But even more troubling, it didn’t appear that any money had been paid from the WPS account to any landlords on behalf of the Section 8 enrollees.

LaToya Cotton became a Michigan housing agent for MSHDA in 1994. Very soon thereafter she concocted her scheme.

Prior to becoming a housing agent Cotton had setup the WPS account for a legitimate purpose. But after becoming an agent and enrolling applicants for the Section 8 program, she designated WPS as the recipient for some of the applicants’ landlord payments. When the WPS applicants were approved for Section 8 payments, Cotton didn’t tell them they had been approved. Rather, she told them they were not approved, or that they were on the waitlist. None of those enrollees were ever aware that they had been approved for Section 8 payments.

In September 2005, the FBI obtained a search warrant for Cotton’s office. The records seized revealed that during the 11 years that Cotton was a housing agent, she enrolled 100s of Section 8 applicants. Of those applicants she designated WPS as the recipient of landlord payments for about 40 of the enrollees. Cotton would periodically change the WPS enrollees, removing some and adding others. At the time her office was searched, she had eight enrollees whose voucher payments were going to WPS.

All of the money paid into the WPS account was used by Cotton for personal expenses. Over the 11-year period of the fraud, the total amount paid into the account was $1,051,701. She purchased cars, went on vacations. In April 2004, Cotton purchased a 5,237 square foot home for $830,000.  MSHDA figured that the amount embezzled by Cotton could have subsidized housing for 50 families for more than four years.

In January 2006, in front of US District Court Judge Patrick Duggan (The father of current Detroit Mayor Mike Duggan – ironically the mayor has been trying to turn Detroit around after it has been racked by years of public corruption.), Cotton pleaded guilty to a federal indictment charging her with theft from a federally funded program.

Judge Duggan in May 2006 sentenced Cotton to three and a half years incarceration, three years supervised release and ordered her to pay $1.1 million in restitution.  (Cotton’s house was forfeited and sold with the proceeds used to pay a portion of the restitution.)

At the time I was quoted as saying, “She (Cotton) was living in a mansion and there were low-income people on the Section 8 waiting list. It was Robin Hood in reverse.”

 

Stejskal: Robin Hood in Reverse – A $1.1 Million SCAM

2000px-robin_hood_logo-svg

Greg Stejskal served as an FBI agent for 31 years and retired as resident agent in charge of the Ann Arbor office.

By Greg Stejskal
ticklethewire.com

In 2005 Female Jones (not her real name), an indigent woman living in public housing in Ann Arbor, Mich., discovered she wasn’t eligible for federal housing assistance. The reason she wasn’t eligible was because it appeared she was already receiving “Section 8” voucher payments. Jones wasn’t aware of receiving any assistance. So it was assumed that there was a bureaucratic snafu, but an investigation revealed something far more nefarious.

Section 8 vouchers are so-called because they are authorized under Section 8 of the Federal Housing Act of 1937, part of the New Deal legislation designed to help people suffering the effects of the Great Depression. In 1974 the Housing Act was amended to create the Section 8 voucher program. Low income people would be eligible for vouchers that would pay a percentage of their rent in approved housing facilities. The money for the program would be provided by U.S. Department of Housing and Urban Development (HUD), but the program would be administered by the state and local public housing agencies.

There was only a limited amount of funding available. So not all eligible people would receive vouchers. In Michigan a waiting list existed and waits of 3-6 years were not uncommon.

Greg Stejskal

Greg Stejskal

The voucher payments were made directly to the indigent tenants’ landlords to minimize the opportunity for fraud. Housing voucher agents working for the state prepared the application forms for the indigent applicants. These agents obtained background information and determined whether the applicants met the eligibility requirements.

Female Jones’ caseworker determined that she was enrolled in the Section 8 program, and voucher payments were being sent to Washtenaw Payee Services, a company that appeared to receive Section 8 payments on behalf of several landlords in Washtenaw County. Because the woman was unaware of the payments, and they were not being received by her landlord, the caseworker reported the problem to the Michigan State Housing Development Authority (MSHDA).

MSHDA’s initial investigation indicated there might be some fraudulent activity. As the Section 8 program is federally funded, they reported their concerns to the FBI, and a joint FBI/MSHDA investigation was begun.

Although Washtenaw Payment Services (WPS) appeared to have an office with a street address, it turned out to be a private mailbox service which is often a red flag in a fraud investigation.

The bank records for WPS were obtained via subpoena. Those records showed that WPS was formed in 1990 when LaToya Cotton filed business papers with Washtenaw County and opened a bank account. Since 1994, about 11 years, WPS had been receiving Section 8 voucher payments ostensibly for landlords of low-income tenants enrolled in the program.

The striking thing was the founder of WPS, LaToya Cotton, was a Michigan housing agent responsible for enrolling prospective low-income applicants for Section 8 vouchers. But even more troubling, it didn’t appear that any money had been paid from the WPS account to any landlords on behalf of the Section 8 enrollees.

LaToya Cotton became a Michigan housing agent for MSHDA in 1994. Very soon thereafter she concocted her scheme.

Read more »

Ex-ATF Agent Agrees to Pay $40,000 After Falsely Claiming He Had Cancer to Collect Sick Leave Pay

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By Allan Lengel
ticklethewire.com

A former ATF agent who faked having cancer to collect sick leave pay, has agreed to pay the federal government $40,000 to resolve the matter, the Justice Department announced this week.

The Justice Department’s Civil Division alleged that Douglas daCosta of Livermore, Calif.  agreed to pay $40,000 to resolve allegations that he falsely claimed more than 80 days paid sick leave while working as a criminal investigator for the ATF’s San Francisco field division from January 2009 until his retirement in June 2009.

Specifically, the government alleged that  daCosta falsely told his supervisors that he was undergoing extensive treatment for cancer and went as far as to provide a forged letter from a physician to back his claim, the government said in a press release, noting that he did not have cancer.

“When a law enforcement officer misuses taxpayer funds, he does a disservice to his colleagues who serve with professionalism and distinction,”  Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, said in a statement. “This settlement shows that we will not hesitate to hold individuals accountable if they misuse taxpayer funds.”

DaCosta had worked for ATF for 28 years.

His Linkedin page states that he currently works for an international security and investigations firm.

 

Weekend Series of Crime History: Bernie Madoff Before the Empire Crumbled

Debt Collectors Accused of Impersonating Federal Authorities to Get People to Pay Up

By Steve Neavling
ticklethewire.com

Employees of a debt collection company in Georgia are accused of impersonating FBI, Justice Department and local police officials to get thousands of people to pay up, the Guardian reports.

The U.S. Attorney’s Office said the employees of Williams, Scott and Associates illegally collected debts from 6,000 people and are now facing criminal charges of conspiracy to commit wire fraud.

The employees face up to 20 years in prison.

After buying the debt for a few cents on the dollar, the company began collecting the money from 6,000 people after saying they were investigators. The employees collected $4.1 million this year, the U.S. Attorney’s office said.

“After years of threatening false arrest, these defendants are the ones who now find themselves in handcuffs,”  said US attorney for the southern district of New York Preet Bharara in a statement.

FBI: Scams Target Families of Central American Children Captured Along U.S. Border

Steve Neavling
ticklethewire.com

The FBI is investigating two scams that target some of the families of the tens of thousands of Central American children who have been captured recently trying to sneak into the U.S., Al Jazeera America reports.

The telephone scams involve asking families for money for phony travel costs.

“One fraud scheme involved individuals who claimed to be representing a charitable or non-profit organization, which they claimed assists in processing and reuniting the children with their families,” Special Agent Michelle Lee told Reuters.

The scam has bilked families out of hundreds and even thousands of dollars, the FBI said.

The FBI is warning Texans to be skeptical of people claiming to be nonprofit workers.

FBI Reports New Scheme in Texas in Which Callers Are Told Loved One Was Kidnapped

Steve Neavling
ticklethewire.com

Authorities are dealing with a sick new scheme in Texas called “virtual kidnapping.”

Victims get a call, usually in the middle of the night, from someone who says they’ve kidnapped a loved one and wants ransom money wired immediately, KSAT.com reports.

The callers usually doesn’t have any contact with the person they say they have kidnapped.

“The person will say, ‘I’m being held here in Mexico and they are going to kill me if you don’t [send] money right away.’ They always request you wire the money,” said FBI Special Agent Michelle Lee.

The scheme is playing out four to five times a week in the Rio Grand Valley, the FBI said.

“They’ll collect information about the family beforehand. They may call again and do social engineering (or) look at your Facebook site,” said Lee.