 |  Criminal Investigation, 8/e Charles R. Swanson,
University of Georgia
Neil C. Chamelin,
Assistant State Attorney, Second Judicial Circuit
Leonard Territo,
University of South Florida- Tampa
Larceny and Fraud
Chapter OutlineI. INVESTIGATIVE PROCEDURE (See Slides 14-2 and 14-3) A. For theft to occur, two elements must be present: opportunity and desire. 1. Investigative procedure depends on the facts of each case. 2. Thus, the theft of an item from a home—possibly by a guest—would be handled differently from business thefts by employees. II. CREDIT CARD FRAUD (See Slide 14-4) A. Types of Credit Card Fraud 1. Stolen cards. Credit cards can be stolen in a variety of ways, such as muggings, purse snatchings, and office and health club thefts. 2. Counterfeit credit cards. Counterfeit cards vary in quality from those made on embossing machines stolen fro companies that produce cards to those of obviously poor quality. 3. Shave-and-paste schemes. Account number are shaved off one or more legitimate credit cards and replaced by new numbers. 4. Fraudulent application. Individuals apply to several credit card companies, hoping that one or more will issue them credit cards. B. Preventing Credit Card Fraud The best way to avoid credit card fraud is for the individual consumer to protect his or her account number. III. CHECK FRAUD (See Slide 14-5) A. Check Fraud Organizations 1. The major groups. The principal ethnic groups involved in illegal check fraud schemes include Nigerians, Asians (particular Vietnamese), Russians, Armenians, and Mexicans. 2. The players. Despite the lack of a rigid hierarchy, members typically fall into one or several roles. a. Leaders. Leaders of an organization generally have an extensive criminal history and possess above-average intelligence. b. Check procurers. Check procurers obtain authentic checks, usually by stealing them while employed within a financial information on legitimate individuals. c. Check passers. Check passers actually negotiate stolen and counterfeit checks through the banking system and collect the proceeds to distribute to the group. B. Types of Check Fraud Schemes (See Slide 14-6) The variety of check fraud schemes perpetrated throughout the country ranges from depositing single stolen checks to counterfeiting thousands of negotiable instruments and processing them through hundreds of bank accounts (see Slide 14- ). 1. Large-scale counterfeiting. The most notorious groups engaged in large-scale counterfeiting operations are the Vietnamese triads operating out of Orange County, California. 2. Identity assumption. Seen in various metropolitan areas, identity assumption schemes often involve Nigerian and Vietnamese criminal organizations. 3. Payroll-check fraud. A variation of the identity assumption scheme involves placing group members within payroll-check processing companies. C. Methods of Alteration Chemical techniques and computers provide the primary means by which criminals manipulate and counterfeit checks. 1. Chemical techniques. Legitimate personal checks can be changed by chemical means. 2. Today’s computer technology makes it relatively simple to counterfeit checks. D. Check-Fraud Prevention Financial institutions have begun to implement a type of biometric fingerprint identifier as a more cost-effective approach. IV. CELLULAR PHONE CLONING (See Slide 14-7) A. Cloning is defined as the unauthorized and illegal programming of cellular phones with the access codes of legitimate cellular customers. 1. it has allowed criminals to obtain cheap, mobile communications that are untraceable through traditional law enforcement methods. B. A Powerful Investigative Tool Cloning can provide law enforcement with a powerful investigative tool against major criminal enterprises. V. SHOPLIFTING A. Shoplifters can be classified into two groups: (see Slides 14-8 and 14-9) 1. commercial shoplifters, or "boosters," who steal merchandise for resale and 2. pilferers who take merchandise for private use. B. Reducing Shoplifting Losses The retailing industry is increasingly taking steps to reduce shoplifting losses, with techniques running from the simple to the sophisticated. VI. CONFIDENCE GAMES (See Slide 14-10) A. The Pigeon Drop This swindle is operated by two people. B. The Bank Examiner Scheme The bank examiner scheme is one of the more sophisticated con games and requires knowing where targets bank. C. Inheritance Scam In this scam, the victim’s phone rings and, on the other end, a sweet-sounding person says, "You may be the recipient of a huge inheritance." D. Three-Card Monte This scam is similar to the traditional shell game. E. C.O.D. Scam The suspects usually pose as delivery employees. After writing a phony mailing label, the suspect goes next door and asks the neighbor to accept a perishable package for the absent neighbor and to pay cash for COD charges. F. Money-Making-Machine Scam In this scam, a couple of con artists visit a local dice game to look for victims. VII. MAIL FRAUD (See Slide 14-11) A. Chain Letters A chain letter is a "get rich quick" scheme which promises the recepient that your mail boxes will soon be stuffed full of cash fi they decide to participate. B. Free Prize Scheme Thousands of people are notified by mail daily they have won a free prize. Typically, these notices are mailed by con artists whose sole purpose is to obtain money from the unwitting victim. C. Nigerian Advance Fee Scam The scam works as follows: An unsolicited letter arrives from Nigeria purporting to be from a high government official or officer of the Nigerian National Oil Company asking if your company can help him (them) move tens of millions of dollars from contract "overpayment" out of Nigeria. All you have to do is give them all of your financial information and "advance fee" to pay for transfer costs. D. Hot Tip on Playing Foreign Lotteries by Mail Most foreign lottery solicitations sent to addresses in the U.S. do not come from foreign government agencies or licensees. Instead, they come from "bootleggers" who seek exorbitant fees from those wishing to play. E. Free Vacation Scam When a postcard or letter is received in the mail and/or an unexpected phone call comes from an unknown company promising a complimentary vacation in an exotic spot, someone is probably trying to make the recipient the victim of the free vacation scam. F. 900 Telephone Number Schemes There are swindlers who lure people to call a 900 number without giving anything in return for their money. Such a call may even result in charges on a phone bill of $30 or more. G. Advance Fee Loan Schemes The advance fee swindler claims to be able to obtain a loan for a prospective borrower with ease from a legitimate lending institution, such as a bank or a savings and loan association. However, the swindler has no ability to secure a loan. H. Credit Card Schemes The scam starts with a phone call, a postcard, or a letter, which claims for a fee the recipient can obtain a Visa or MasterCard or other major credit card, or establish that the recipient is credit worthy enough to obtain one of these cards. I. Cut-Rate Health Insurance Fraud Some policies offered to seniors through mailed advertisements and in other ways are offered by unscrupulous companies and salesmen who will try to sell anything they can, whether there is a need or not. J. Oil and Gas Investment Frauds Some oil-and gas-well deals are offered by "boiler rooms," or fly-by-night operations that consist of nothing more than bare office space and a dozen or so desks and telephones. K. Work-at-Home Schemes Advertised opportunities to earn money by doing work at home are frequently nothing more than fraudulent schemes and, at best, rarely result in any meaningful earnings. L. Home Improvement and Home Repair Frauds A favorite trick of dishonest home repair firms is to mail a brochure offering to do an expensive job for an unusually low price. Once the contract is signed, the homeowner learns why the price was so low. The firm never delivers the service which was paid for in advance. M. The Phony Insurance Scam If a notification from an "estate locator" is received in the mail which says that there is an unclaimed inheritance waiting for the recipient, it should be treated with considerable suspicion. N. Missing Persons Fraud Scheme The missing persons scam is one of the more unusual types of fraud schemes. It preys on those people whose loved ones have disappeared. VII. WHITE COLLAR CRIME (See Slides 14-12 and 14-13) A. In 1949 a new type of crime was brought to the attention of law enforcement when Professor Edwin H. Sutherland defined white-collar crime as "a crime committed by a person of respectability and high social status in the course of his occupation." B. Ponzi, or Pyramid, Schemes Pyramid sales schemes, otherwise known as "chain-referral schemes" or "Ponzi schemes," have mushroomed across the United States and may be operating in other countries. 1. A pyramid scheme is a marketing program by which people buy the right to sell others the right to sell a specified product. 2. Method of cash-flow analysis. a. Step One. Since most victims make their investments by personal or cashier’s check, the Ponzi artist usually deposits these funds into a bank account, making each investment traceable. b. Step Two. The second step for investigators in this process is to turn over all the financial records obtained through the search warrant or subpoena to a forensic account for the cash-flow analysis. c. Use of Forensic Accountants. 3. Problems for Law Enforcement. When companies promote Ponzi schemes, auditing becomes difficult, expensive, and time consuming. C. Money Laundering (see Slides 14-15, 14-16, and 14-17) Before spending or otherwise using these funds obtained from illegal sources, they must give the money an aura of legality. This conversion is known as laundering. 1. The Laundering of Money by Organized Crime. Organized crime is an estimated $100 billion-a-year untaxed business operated by groups ranging from motorcycle gangs, to Asian drug triads, to the Italian Mafia. 2. Domestic Laundries. Because most checks and credit card receipts are traceable by law enforcement officials, businesses such as restaurants, bars, and massage parlors, which take in a high proportion of case, tend to be more desirable as laundries than businesses that receive most of their income as checks or other traceable instruments. 3. Foreign Laundries. Much of the money invested by organized crime in legitimate businesses in the United States is first routed through secret numbered bank accounts in countries such as Liechtenstein. 4. Use of the Internet to Launder Money. One method of money laundering through the Internet is to establish a company offering services payable through the Internet. 5. The Internet Communication Trail. All information conveyed through the Internet passes through a series of computer servers. 6. Internet Gambling. It seems that Internet gambling might be an ideal web-based "service" to serve as a cover for a money laundering scheme through the net. 7. Possible Counter Measurers. Several years ago the Financial Action Task Force (FATF) on Money Laundering met to discuss the problem of laundering money on the Internet and experts offered possible countermeasures: a. Require Internet service providers (ISPs) to maintain reliable subscriber registers with appropriate identification programs. b. Require that this ISP establish log files with traffic data relating Internet-protocol numbers to subscriber and to telephone number used in the connection. c. Require that this information be maintained for a reasonable period (six months to a year). 8. Forensic Examination of Money-Laundering Records. Today, the Racketeering Records Analysis Unite (RRAU) of the FBI laboratory in Washington, DC, can establish this necessary link by examining the records kept by criminals who launder money. a. Secreting Funds. Criminal often hide illegally obtained funds until they can smuggle the money to another destination. b. Disguising the Source of Illicit Funds. By examining seized documents, examiners gained valuable insights into how the criminals had disguised the actual source of illegal funds. c. Structuring Financial Transactions. Another method for laundering money involves structuring financial transactions. IX. IDENTITY THEFT A. How Identity Theft Occurs (see Slides 14-18 and 14-19) 1. Dumpster Diving. Individuals or businesses that fails to dispose properly of personal identification information, by shredding or mutilating, are susceptible to a "dumpster diver" which is essentially an individual who retrieves discarded material looking for anything of value. 2. Mail Theft. Mail theft presents another way criminals obtain personal identification information. 3. Internal Access. Internal access refers to an individual obtaining personal information illegally from a computer connected to a credit reporting bureau or to an employee accessing a company's database that contains personal identification information. 4. Computerized Information and the Internet. With so much personal information obtainable in the networked world, thieves can access information easily. B. How to Resolve Identity Theft After notifying the police, victims should take the necessary steps to mitigate and resolve the damage caused by identity theft. 1. Department can provide these steps through a booklet or private consultation with an investigator, using separate procedures for different types of identity theft. 2. Additionally, victims should complete and submit a credit fraud report with a victim statement to the credit bureaus. 3. Recommendations and Strategies for Preventing Identity Theft a. Patrol residential areas on trash collection days and during the tax season. b. Enforce trespass laws with regard to residential and industrial dump sites. c. Advise citizens to shred documents and drop off mail in a locked mailbox. d. Remind people to be cautious using automated teller machines. e. Disseminate information to the public on how to mitigate and prevent computer, credit, and cellular telephone fraud. f. Suggest restrictions to businesses to reduce internal access fraud. g. Educate officers about the various methods used to commit identity theft and the resulting types of fraud. X. THE LOOTING OF ARCHAEOLOGICAL SITES (see Slides 14-20 and 14-21) Archaeological looting is defined as the illegal, unscientific removal of archaeological resources. It occurs on public and private lands. A. Legal Considerations 1. Federal Provisions. Federal preservation laws date from the late nineteenth century. 2. State Laws. As of mid-1990, none of the states had a unified law comprising all statutes protecting archaeological resources. Instead, states tend to categorize laws related to archaeological resources under a variety of headings. B. Conducting Enforcement Investigations Different laws apply when the violation occurs on federal land as opposed to state land, and there are relatively few laws applicable to private lands as opposed to the more heavily protected public lands. C. Crime Scene and Follow-Up Investigation The same general principles that apply to crime scene processing apply to looting cases also. The investigator should also enlist the aid of an archaeologist in these cases. |
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2002 McGraw-Hill Higher Education