abiteoutofcrime

THIRTEEN THINGS YOUR BURGLAR WON'T TELL YOU:

2010-11-09T10:25:00.000-08:00

THIRTEEN THINGS YOUR BURGLAR WON'T TELL YOU:

1. Of course I look familiar. I was here just last week cleaning your
Carpets, painting your shutters, or delivering your new refrigerator.

2. Hey, thanks for letting me use the bathroom when I was working in your
Yard last week. While I was in there, I unlatched the back window to make my
Return a little easier.

3. Love those flowers. That tells me you have taste... And taste means there
Are nice things inside. Those yard toys your kids leave out always make me
Wonder what type of gaming system they have.

4. Yes, I really do look for newspapers piled up on the driveway. And I
Might leave a pizza flyer in your front door to see how long it takes you to
Remove it.

5. If it snows while you're out of town, get a neighbor to create car and
Foot tracks into the house. Virgin drifts in the driveway are a dead
Giveaway.

6. If decorative glass is part of your front entrance, don't let your alarm
Company install the control pad where I can see if it's set. That makes it
Too easy.

7. A good security company alarms the window over the sink. And the windows
On the second floor, which often access the master bedroom - and your
Jewelry. It's not a bad idea to put motion detectors up there too.

8. It's raining, you're fumbling with your umbrella, and you forget to lock
Your door - understandable. But understand this: I don't take a day off
Because of bad weather.

9. I always knock first. If you answer, I'll ask for directions somewhere or
Offer to clean your gutters. (Don't take me up on it.)

10. Do you really think I won't look in your sock drawer? I always check
Dresser drawers, the bedside table, and the medicine cabinet.

11. Here's a helpful hint: I almost never go into kids' rooms.

12. You're right: I won't have enough time to break into that safe where you
Keep your valuables. But if it's not bolted down, I'll take it with me.

13. A loud TV or radio can be a better deterrent than the best alarm system.
If you're reluctant to leave your TV on while you're out of town, you can
Buy a $35 device that works on a timer and simulates the flickering glow of
a real television. (Find it athttp://www.faketv.com/)

8 MORE THINGS A BURGLAR WON'T TELL YOU:

1. Sometimes, I carry a clipboard. Sometimes, I dress like a lawn guy and
Carry a rake. I do my best to never, ever look like a crook.

2. The two things I hate most: loud dogs and nosy neighbors.

3. I'll break a window to get in, even if it makes a little noise. If your
Neighbor hears one loud sound, he'll stop what he's doing and wait to hear
It again.. If he doesn't hear it again, he'll just go back to what he was
Doing. It's human nature.

4. I'm not complaining, but why would you pay all that money for a fancy
Alarm system and leave your house without setting it?

5. I love looking in your windows. I'm looking for signs that you're home,
And for flat screen TVs or gaming systems I'd like. I'll drive or walk
Through your neighborhood at night, before you close the blinds, just to
Pick my targets.

6. Avoid announcing your vacation on your Facebook page. It's easier than
You think to look up your address.

7. To you, leaving that window open just a crack during the day is a way to
Let in a little fresh air. To me, it's an invitation.

8. If you don't answer when I knock, I try the door. Occasionally, I hit the
Jackpot and walk right in.

Sources: Convicted burglars in North Carolina, Oregon, California, and
Kentucky ; security consultant Chris McGoey, who runs http://www.crimedoctor
Com/ and Richard T. Wright, a criminology professor at the University of
Missouri-St. Louis, who interviewed 105 burglars for his book Burglars on
The Job

Protection for you and your home:

If you don't have a gun, here's a more humane way to wreck someone's evil
Plans for you. (I guess I can get rid of the baseball bat.):

WASP SPRAY

A friend who is a receptionist in a church in a high risk area was concerned
About someone coming into the office on Monday to rob them when they were
Counting the collection. She asked the local police department about using
Pepper spray and they recommended to her that she get a can of wasp spray
Instead.

The wasp spray, they told her, can shoot up to twenty feet away and is a lot
more accurate, while with the pepper spray, they have to get too close to
you and could overpower you. The wasp spray temporarily blinds an attacker
until they get to the hospital for an antidote. She keeps a can on her desk
in the office and it doesn't attract attention from people like a can of
pepper spray would. She also keeps one nearby at home for home protection..
Thought this was interesting and might be of use.

FROM ANOTHER SOURCE

On the heels of a break in and beating that left an elderly woman in Toledo
dead, self defense experts have a tip that could save your life.

Val Glinka teaches self-defense to students at Sylvania Southview High
School. For decades, he's suggested putting a can of wasp and hornet spray
near your door or bed.

Glinka says, "This is better than anything I can teach them."

Glinka considers it inexpensive, easy to find, and more effective than mace
or pepper spray. The cans typically shoot 20 to 30 feet; so if someone tries
to break into your home, Glinka says, "spray the culprit in the eyes". It's
a tip he's given to students for decades. It's also one he wants everyone to
hear. If you're looking for protection, Glinka says look to the spray.

"That's going to give you a chance to call the police; maybe get out."

Maybe even save a life.

Put your car keys beside your bed at night.

Tell your spouse, your children, your neighbors, your parents, your Dr's
office, the check-out girl at the market, everyone you run across. Put your
car keys beside your bed at night.

If you hear a noise outside your home or someone trying to get in your house
just press the panic button for your car. The alarm will be set off, and
the horn will continue to sound until either you turn it off or the car
battery dies. This tip came from a neighborhood watch coordinator. Next
time you come home for the night and you start to put your keys away, think
of this: It's a security alarm system that you probably already have and
requires no installation. Test it. It will go off from most everywhere
inside your house and will keep honking until your battery runs down or
until you reset it with the button on the key fob chain. It works if you
park in your driveway or garage. If your car alarm goes off when someone is
trying to break into your house, odds are the burglar/rapist won't stick
around.

After a few seconds all the neighbors will be looking out their windows to
see who is out there and sure enough the criminal won't want that. And
remember to carry your keys while walking to your car in a parking lot. The
alarm can work the same way there.

This is something that should really be shared with everyone. Maybe it could
save a life or a sexual abuse crime.

'Pain Beam' to Be Installed in LA Jail

2010-08-24T12:22:00.000-07:00

An invisible heat-beam weapon developed in secrecy by the military is set for use in a U.S. jail.

Law enforcement officials recently revealed plans to use the nonlethal device at the Los Angeles County Sheriff's Department's Pitchess Detention Center, according to the Los Angeles Daily News. The weapon, which shoots an invisible beam of energy, would be used in the prisoners' dormitory to stop an assault or break up a fight.

Called the Assault Intervention Device, it uses millimeter waves to heat the top layer of skin, causing an intense burning sensation that forces the person being targeted to move away immediately.

View more news videos at: http://www.nbclosangeles.com/video.

"I equate it to opening an oven door and feeling that blast of hot air, except instead of being all over me, it's more focused," said Bob Osborne, commander of the Sheriff's Department's Technology Exploration Program, according to the Daily News.

The weapon being installed in the jail is a smaller version of a technology originally developed by the military for use on the battlefield. The military's weapon, called the Active Denial System, can be put on a Humvee or truck, and researchers are also working on a aircraft-mounted version.

Raytheon, which makes the Assault Intervention Device, markets several versions of the weapon on its website.

The smaller version of the weapon being installed in the jail creates pain on a single part of the body, rather than all-over heat like the military version. A local news video showing the device being tested features a laughing test subject clutching a single part of the body where he has been hit, and then moving out of the way.

The device's use at the Pitchess Detention Center is part of a six-month evaluation being conducted by the National Institute of Justice to look at possible widespread use of the technology in jails. If that happens, then it will place law enforcement agencies well ahead of the military.

Despite spending years and tens of millions of dollars to develop the nonlethal technology, the military has not yet deployed the Active Denial System, in large part because of concerns of a public relations backlash against using a "microwave weapon." Ironically, a former Air Force secretary even suggested that the weapon should first be used in the United States before being deployed abroad.

The Pentagon this year did send a truck-mounted version of the weapon to Afghanistan for testing, but it was sent home without ever being used.

FBI Alert

2010-08-23T21:03:00.001-07:00

It’s back to school time. Time to be more alert of suspicious strangers, unusual or unfamiliar vehicles and abnormal activity in your neighborhood. Talk to your children about strangers. Watch out for school crossing zones; be aware of the speed limits and slow down for our future generation.

FBI ALERT
TELEPHONE FRAUD INVOLVING JURY DUTY
EXTRA!! The FBI is warning the public about an ongoing scheme involving jury service. Most of us take that summons for jury duty seriously, but enough people skip out of their civic duty that a new and ominous kind of fraud has surfaced. The caller claims to be a jury coordinator. If you protest that you never received a summons for jury duty, the scammer asks you for your social security number and date of birth so he or she can verify the information and cancel the arrest warrant. If you give out any of this information, bingo; your identity was just stolen!
The fraud has been reported so far in 11 states, including Oklahoma, Illinois and Colorado. This scheme is particularly insidious because they use intimidation over the phone to try to bully people into giving information by pretending they are with the court system. The FBI and the federal court system have issued nationwide alerts on their websites, warning consumers about the fraud.

New analysis of stolen data brings surprises

2010-08-19T05:53:00.000-07:00

By Woody Leonhard

Every year, the highly respected Verizon Business RISK data crime–investigation team publishes an analysis of major online data thefts it's been asked to study.

This year, a first-ever joint report by VBR and the U.S. Secret Service presents a fascinating view into the state of the data-stealing art, with many surprising facts that should interest all consumers.

Throughout 2009, according to the 2010 Data Breach Investigation Report (PDF), Verizon investigated 57 "confirmed breaches" that included data theft. The Secret Service investigated 84 similar cases. That's 141 verified cases covering a total of 143 million data records owned by organizations around the world. Verizon's efforts led to arrests in 15% of its cases; the Secret Service's rate was a more-impressive 66%.

As you might imagine, many of the victimized companies don't want their identities to be known. The report states, "... about two-thirds of the breaches covered herein have either not yet been disclosed or never will be." Nevertheless, this aggregate report is still important: it gives an excellent overview of security problems that could affect you, the consumer.

Who's stealing sensitive data? Surprise!

I always assumed that most people involved in stealing sensitive data from organizations — bank records, credit-card numbers, personal information — were rogues acting alone, selling their booty via clandestine channels to the highest bidder.

Wrong!

An astonishing 85% of all stolen data records can, according to this report, be traced to organized crime. "Banding together allows criminal groups to pool resources, specialize skills, and distribute the work effort." Lone wolves aren't stealing our data. Rather, it's groups of people, acting in concert with one simple motive: profit.

The report quashed many of my other preconceived notions. For example, insiders (employees, executives, programmers) were actively involved in 48% of the cases — which doesn't surprise me — but they were implicated in only 3% of the total number of records stolen. Insiders participate in smaller jobs.

I was also surprised to find that the percentage of pilfering attributable to business partners — a category that includes IT service providers, suppliers, and vendors — has fallen steadily. The report can't pinpoint the reason for the decline in partners' shenanigans, but does point to the possibility that increased awareness of third-party security threats may be a factor.

It also mentions organizations such as hotel, restaurant, and retail companies that hire outsiders to provide IT services: "Organizations that outsource their IT management and support also outsource a great deal of trust to these partners." If your company's thinking about outsourcing, that's a word to the wise.

And, contrary to widespread publicity, no foreign governments were implicated in data thefts, according to this report.

How the bad guys get your personal information

While headlines herald stories about a bank employee losing a notebook with a gazillion account records or a civil servant dropping a disc with Social Security numbers, the report notes that 98% of the stolen data was snatched directly from company servers — mostly by use of malware and direct hacking.

Once again, the Verizon/Secret Service numbers surprised me. More than half of the malware infections came from direct installation (injection) by the attacker, and SQL databases led the list of subverted systems. SQL injections frequently rely on well-known quirks in SQL systems; craftily assembled SQL database queries, for example, can install programs that pluck data and send it to the requester.

Perhaps the best-known SQL-injection attack involved American Albert Gonzalez, who on March 25 was sentenced to 20 years in federal prison for stealing more than 90 million credit- and debit-card numbers. (See Wired's March 25 Threat Level post.) As the Verizon report says, "SQL infection vulnerabilities are endemic, and to fix them you have to overhaul all your code."

The second-most-popular method for subverting servers uses drive-by Web infections (where you get an infection without actually clicking anything on a malicious site), followed by infections that require user interaction ("click here to clean your system" come-ons, for example).

Added together, injections and Web infections using malware accounted for 79% of all stolen data — not e-mail, not infected documents, and not zero-day attacks.

Keyloggers — those surreptitiously installed programs that record what you type — made up 36% of all the data breaches but accounted for only 1% of the clandestinely collected data. That's a big change from last year, when keyloggers collected more than 80% of the compromised data. The bad guys have found more efficient ways to take your information.

And what of the never-ending process of receiving and applying security patches to quickly shore up those security vulnerabilities? Not an issue, says the report. "It is very interesting to note that there were no confirmed cases in which malware exploited a system or software vulnerability in 2009 … there wasn't a single confirmed intrusion that exploited a patchable vulnerability."

What companies must do to protect our data

If this is all starting to sound hopeless, it isn't. The authors of the report offer many suggestions that every company with sensitive data should consider. Most of it doesn't stray too far from common sense: give access to sensitive information only to employees who need it, watch your access logs, encourage strong passwords, warn employees about installing rogue antivirus programs, and so on.

Even if you aren't involved with an organization that handles sensitive data, you need to know that the kinds of attacks documented by Verizon are getting larger and more complex.

You can help by regularly checking all of your online information that you can access, reporting any data or activity you see that's out of the ordinary. Immediately tell your bank, your credit card company, and your stock broker if you think something's gone awry.

As the report says, "Third-party fraud detection is still the most common way breach victims come to know of their predicament" — in other words, companies learn of breaches when customers report them.

So if you think your data's been stolen, holler yer head off!

Legal Thievery

2010-05-11T10:00:00.000-07:00

Lotteries
The devious slogan for the New York State lottery is "All you need is a dollar and a dream." Such state lotteries are a regressive form of taxation, since the vast majority of lottery consumers are low-income. The statistics are bleak: Twenty percent of Americans are frequent players, spending about $60 billion a year. The spending is also starkly regressive, with lower income households being much more likely to play. A household with income under $13,000 spends, on average, $645 a year on lottery tickets, or about 9 percent of all income.

A new study by Emily Haisley, Romel Mostafa and George Loewenstein explored some of the reasons why low-income people spend so much money on a product that only returns fifty three cents on the dollar. (Lotteries are such a bad deal that they make slot machines look good.) Here's the abstract:

In two experiments conducted with low-income participants, we examine how implicit comparisons with other income classes increase low-income individuals' desire to play the lottery. In Experiment 1, participants were more likely to purchase lottery tickets when they were primed to perceive that their own income was low relative to an implicit standard. In Experiment 2, participants purchased more tickets when they considered situations in which rich people or poor people receive advantages, implicitly highlighting the fact that everyone has an equal chance of winning the lottery.

The study neatly illuminates the sad positive feedback loop of lotteries. The games naturally appeal to poor people, which causes them to spend disproportionate amounts of their income on lotteries, which helps keep them poor, which keeps them buying tickets. The saddest part is that these destructive games are run by the government.

Rat Out a Tax Cheat, Collect a Reward

2010-03-03T07:29:00.000-08:00

Rat Out a Tax Cheat, Collect a Reward
by Blake Ellis, Staff Reporter
Tuesday, March 2, 2010
http://finance.yahoo.com/taxes/article/108952/rat-out-a-tax-cheat-collect-a-reward?mod=taxes-advice_strategy

If you knew coworkers, former bosses or exes who cheated on their taxes, would you turn them in? The Internal Revenue Service can make it worth your while.

As tax season nears, we all want to get as much money back from the IRS as possible. And while taking advantage of this year's new tax breaks will put some extra money in your pocket, snitching on a tax cheat could make you rich.

In a recent poll from the IRS Oversight Board, 13% of those surveyed think cheating is acceptable, up from 9% in 2008. As the recession puts the squeeze on household finances, the lure of fudging on a tax return is even greater.

"In a down economy, the temptation to cheat on taxes is much stronger because people are in more desperate situations more often," said Bill Raabe, a tax expert at Ohio State University's business school.

More people may be just as desperate to turn in a business, rat out an ex–spouse or report a colleague to collect a reward.

Small–time crooks: The IRS's informant program has been around for more than 140 years. If you suspect a person is committing tax fraud and report it, you could receive up to 15% of the amount that has been underpaid, with a maximum award of $10 million.

Informants are required to complete a claim, which is available on the IRS Web site, and mail it to the agency or call the IRS tip line at 1–800–829–0433. While you must reveal your identity to the IRS, your name will not be made public.

Because there is no minimum requirement for the amount in question, anyone can file a report in hopes of making an extra buck off of a cheating boyfriend or obnoxious neighbor.

"You probably get a mix of people with the informant program. You'll have spouses –– or ex–spouses probably –– as well as ex–employees turning in their employers," said Raabe. "But you really have to think, 'is it worth my time to report that guy?'"

To weed out the bogus reports from bitter ex–husbands and disgruntled employees, the IRS requires informants to fill out a detailed form and provide intimate information about the tax evader, including the person's social security number, address and date of birth.

"That's a lot of information that I'm not sure the average person has available," said Gagnon. "They're kind of asking the person to be a detective or work for them and go hunt all this information down, and I don't know how comfortable people would feel trying to do that."

Big cheaters: In 2006, the IRS really started cracking down on big time cheaters and introduced a new whistle–blower program, in which informants are paid a minimum of 15% and a maximum of 30% of the amount owed.

But there's a catch: In order to collect a reward, the taxes, penalties and interest in dispute must add up to at least $2 million. And if the suspected tax evader is an individual, his or her annual gross income must exceed $200,000.

So far, the new incentives have been effective. The IRS has received tips from about 476 informants identifying 1,246 taxpayers in fiscal year 2008, the first full year the program was implemented.

"The program is already attracting an enormous number of quality tips," said Paul Scott, a former Department of Justice trial attorney and current owner of law firm Paul D. Scott, where he represents whistle–blowers. "The volume of claims and/or tips they have been receiving with really substantial documentation or support has increased dramatically since the inception of this program."

Scott said that since the new program began, his firm has received claims from whistle–blowers involving billions of dollars in taxes, penalties and interest.

Who snitches?: In this program, the most common informants tend to be dissatisfied middle–ranking employees in big companies, said Tim Gagnon, an academic specialist of accounting at Northeastern University.

"I think it happens more in middle management than upper management," he said. "They're workers in the middle ranks who feel frustrated about what's going on and are not advancing or don't think they have a shot of moving up, because otherwise, it's hard to break loyalty."

Stephen Whitlock, director of the IRS Whistleblower Office, said that informants have had some connection to the taxpayer but they are not always close acquaintances. They have typically been employees, investors or business associates.

He also said many claims are for substantially more than the $2 million threshold and involve businesses or very wealthy individuals.

While the names of informants aren't made public, Gagnon said that a person's identity often becomes obvious based on the proof provided.

"Certain records show up and they can figure out where they're coming from," he said. "It's gotten a lot more anonymous and there's a lot more hiding in the shadows, but can you really stay in the shadows when you come forward to claim your rewards?"

Despite the program's success and generous rewards, the exhaustive information required and fear of retaliation are still huge deterrents in recruiting IRS informants.

"Once you blow the whistle on your employer, yeah, they can't fire you for retaliation, but I'm not sure how many people are going to hire you after that," said Gagnon.

But it's not always just a hefty reward that motivates people, said Scott of his whistle–blowing clients, and not all of them are jilted employees. Some feel angry about other people being above the law and getting away with it. "They want to stop the fat cats from getting rich at the taxpayer's expense," he said.

Others simply feel morally obligated to let someone know what's going on, said Scott. "They really feel like they're doing the right thing," he said. "When they look back on their lives, they will know they made the right move."

Evil is never banal

2010-02-01T18:55:00.000-08:00

The Lure of the Dark Side
by Jeanette Friedman and David Gold
Evil is never banal.
Of course I am a doctor and I want to preserve life. And out of respect for human life, I would remove a gangrenous appendix from a diseased body. The Jew is the gangrenous appendix in the body of mankind.
SS Dr. Fritz Klein, a doctor at Auschwitz Concentration Camp
Have you ever asked yourself who educated Mengele, Freisler and the hundreds of well-trained doctors and lawyers who made the Nazi machine work? …They weren’t educated in Nazi universities. They were taught in world-renowned universities in a time when having a degree from a German university was as good as you could get.
Dr. Franklin H. Littell, Department of Religion, Temple University, Methodist minister, Holocaust scholar
Maimonides, the medieval Jewish philosopher and physician, taught that free will means that our moral and spiritual characters are never set in stone. At every moment we are able to renew ourselves and achieve great spiritual heights by doing the right thing and taking responsibility. At the same time, we are at every moment tempted by sin and can destroy a lifetime of good deeds by making even a few bad choices.
There are individuals who choose to go over to the Dark Side, a.k.a. Evil. Like Darth Vader in Star Wars, they can be vengeful, angry and bitter and work for people who use them for their own nefarious purposes. (In the end, Darth Vader sees the error of his ways and redeems himself by destroying the Empire that empowered him.)

Power corrupts; Absolute power corrupts absolutely. -- Lord Acton

Power is the central attraction of the Dark Side. People enjoy the power of controlling other people, and many times power that can be used for “good” is used instead to commit unethical and immoral acts. Most people who are evil feel that they are above the law, that they are exempt from mainstream societal mores and morals. Their sense of entitlement gives them a sense of superiority.
IS EVIL BANAL?
Hannah Arendt, a philosopher who fled the Nazis, decided during the Adolf Eichmann trial in Jerusalem, that evil was banal -- ordinary and humdrum because she thought Eichmann was banal.
She was wrong. Evil is never banal; the evildoer may sometimes be banal, if he is the one who is simply following orders. But Eichmann was not following orders. He was evil and led evil men who believed that every Jew on the planet needed to be destroyed.
Based on documents that are now available, historians agree that there was nothing banal about Eichmann and the bureaucracy of which he was a part. In Hitler's Bureaucrats: The Nazi Security Police and the Banality of Evil, author Yaacov Lozowick, clearly shows that Eichmann and his team were a group of people who were completely aware of what they were doing. They were people with high ideological motivation, who took the initiative and contributed far beyond what was necessary to achieve their murderous goals.
As he noted, “…there could be no doubt about it: they clearly understood that their deeds were not positive except in the value system of the Third Reich. They hated Jews and thought that getting rid of them would be to Germany’s good. ”
Hans Safrian, another historian (who wrote “Eichmann’s Maenner” in German) described how Eichmann was the man who sent his forces across the continent, to do their work there. He documented the conscious moral dedication that enveloped Eichmann and his men. They were anything but banal. They followed and executed their racist ideology by taking the initiative, using innovation, zeal and dedication. They may have been paper pushers for the most part, but when they made decisions, they were ruthless in condemning the Jews to their fates.
In an email to the authors, Yehuda Bauer wrote, “Eichmann managed to fool her (Hannah Arendt), and many others. He was no cog. He was part of the machine motor. He was an initiator, and a convinced and extreme Nazi ideologist and antisemite. The bureaucratic group he was part of was, the Reichssicherheitshauptamt (RSHA), was ideologically motivated and was the moving spirit of the Nazi terror machine. The RSHA was responsible only to Himmler and Hitler, and received their full support; it was the center of the terror regime. It was responsible for the Einsatzgruppen, for the Gestapo, for population movements, for the mass murders.”

All of us -- under the wrong circumstances -- have the capacity to do evil if we make the wrong choices.

In many cases the evil doer is a sociopath obsessed with the uses of power. But evil acts are not confined to sociopaths. All of us -- under the wrong circumstances -- have the capacity to do evil if we make the wrong choices.
POWER TOOLS
Power can be defined in many ways. It is the ability to get what you want because you have the talent, method or tools to do so, whether by right or might. The University of Colorado Conflict Research Consortium makes distinctions between three kinds of power—”power over,” “power to” and “power with.”
“Power over” means you control other people. Those in control can attempt to influence the masses with verbal persuasion. But if that doesn’t work, if people don’t want to do what they are told to do, the “controllers” can resort to using the violent tools of power: force, torture or threats. In most cases, when someone abuses his/her power, his/her victims become excessively dependent, and every aspect of their lives is controlled.
In a family dynamic this often manifests itself in domestic violence. In an organization or society, some leaders, usually the most charismatic, are given total power over their followers, who become their “subjects” and do as they are told. In addition to destroying their individuality, this absolves their followers from making choices and taking responsibility for their actions.
“Power to” means you have the ability, resources, and method to do whatever you want; it allows you to do things other people cannot or will not do.
“Power with” means that you bring together other entities or people who will help you accomplish your goals. In a positive world, it would be the equivalent of joining a neighborhood watch group, or founding a committee to build a park, or creating cooperation between groups or individuals to get something accomplished for the benefit of the community.
These same kinds of coalitions can be used to perpetrate evil. In communist and fascist countries, people spy on and report their neighbors for real and imagined acts. In these cases, as in Nazi Germany, children are taught to inform on their own parents and siblings. Family members who resist the party line can land in jail or worse.
DOCTORS PLAYING AT GOD
The role of a physician, a doctor, is to save life. A positive example of “power with” is Dr. Jonas Salk, who used his power to stop a dread disease, polio, from killing millions of children. Developing the polio vaccine, he used the power of persuasion to convince medical experts and government leaders that his discovery could save millions of lives. He used his power “with” the power of others to make the vaccine available worldwide. Edward R. Murrow the dean of CBS reporters, wanted to know if Salk did it for the money. In 1955, in televised interview, he asked Salk who owned the patent for the vaccine. The image shows Salk was surprised. He said, “Well, the people, I guess. There is no patent. Could you patent the sun?”
On the other hand, even before the establishment of the Third Reich, German doctors were the staunchest supporters of the Nazis. Starting in 1929, they were the first to kill “defective” German babies on Hitler’s orders. By 1942, 45 percent of non-Jewish German doctors were members of the Nazi Party, a higher percentage than any other group of German professionals. These 38,000 Nazi doctors viewed killing as a therapeutic imperative. None of the German doctors who worked on human medical experiments and were tried in Nuremberg ever admitted that what they did was wrong.
What could they have been thinking when they killed all those people?
The Hippocratic Oath, taken by doctors since ancient times, is a promise not to harm patients. During war crimes trials, 23 doctors who worked in Nazi concentration camps were found guilty of breaching the code of medical ethics by performing horrifying medical experiments on prisoners. This led to discussions regarding ethical treatment of human subjects, and outlined the ethics of medical research with regard to the human rights of these subjects.
In Auschwitz and other death and concentration camps, German doctors sold on Nazi ideology chose who would live long enough to be worked to death and who would be gassed, shot or hanged immediately. They also performed medical experiments on human beings without their consent, rarely using anesthetics. Among them were experiments to determine how quickly a poison or disease can kill, how long it takes a human being to freeze, and why twins do or don’t have the same traits. These experiments were mostly about discovering effective ways to kill. Ironically, some of the life-saving techniques used in medicine today came from some of those terrible, terrible experiments.
In the 1930s, when medical experiments based on race were conducted in the United States, no one admitted wrongdoing. On July 25, 1972, Associated Press reporter Jean Heller revealed the top-secret Tuskegee Syphilis Study that allowed a focus group of black men to go untreated for their disease. She wrote: “For 40 years, the U.S. Public Health Service has conducted a study in which human guinea pigs, not given proper treatment, have died of syphilis and its side effects…”
One of the results of the Nuremberg War Crimes Trials was the notion of “informed consent.” In the United States, doctors cannot perform a medical service or procedure on you unless they tell you what is going to happen to you, and you must agree, in writing, before they can proceed. You also have the right to stop a procedure or treatment.
Using humans for medical experiments raises ethical issues. We need to consider the ethical dilemmas when we carry out human medical experiments to save lives today. We have to ask ourselves if assisted suicide in cases of terminal illness is acceptable. We need to ask ourselves if abortion is acceptable, and under what circumstances. Should people participate in clinical trials or drug tests, when those tests might cause them harm? Furthermore, is it ethical to suppress negative information? For instance, how do we deal with corporations that refuse to link tobacco inhalation to lung cancer and other diseases or those who “fail” to recognize dioxin as contributing to diseases in Vietnam veterans exposed to Agent Orange? What do we do when the government fails to acknowledge troop exposure to airborne contaminants during the 1990 Gulf War and how this affected 25 percent of Gulf War veterans?7 What do we say to a government that refuses to extend health care benefits to wounded veterans and their families?
Mankind has been given the knowledge and ability to perfect the world. All we have to do is make ethical choices -- and that is not always an easy thing to do. Good and evil co-exist. If there is no sadness, how can we know happiness? If there is no disease, how can we appreciate good health? If there is no war, why would we work toward peace? And if we don’t know the difference between good and evil, how could we make the world a better place? Our responsibility is to resist the lure of the dark side.
Excerpted from: Why Should I Care? Lessons from the Holocaust, By Jeanette Friedman and David Gold
Visit their site at www.whyshouldicareontheweb.com

One-stop shop for cybercrime

2010-01-15T05:53:00.000-08:00

Welcome to DarkMarket – global one-stop shop for cybercrime and banking fraud

• Personal data and tutorials in hacking offered online
• Founder of site traced to London internet cafe

Renukanth Subramaniam, 33, is accused of being a key figure in running DarkMarket, a website where criminals exchanged information on stolen credit cards and other data. Photograph: Serious Organised Crime Agency/AP

To the casual observer, there was little to distinguish the Java Bean internet cafe in Wembley from the hundreds of others dotted around the capital. But to surveillance officers staking it out month after month, this unremarkable venue was the key to busting a remarkable and sophisticated network of cyber criminals.

From the bank of computers inside, a former pizza bar worker ran an international cyber "supermarket" selling stolen credit card and account details costing the banking industry tens of millions.

Renukanth Subramaniam, 33, was revealed today as the founder and a major "orchestrator" of the secret DarkMarket website, where elite fraudsters bought and sold personal data, after it was infiltrated by the FBI and the US Secret Service.

Membership was strictly by invitation. But once vetted, its 2,000 vendors and buyers traded everything from card details, obtained through hacking, phishing and ATM skimming devices, to viruses with which buyers could extort money by threatening company websites.

The top English language cybercrime site in the world, it offered online tutorials in account takeovers, credit card deception and money laundering. Equipment – including false ATM and pin machines and everything needed to set up a credit card factory – was available.

It even featured breaking-news-style updates on the latest compromised material available, while criminals could buy banner adverts to promote their wares.

So vast was its reach, with members in the UK, Canada, US, Russia, Turkey, Germany and France, the UK's Serious Organised Crime Agency (Soca), which helped bust it, said it was "impossible" to put a figure on how much it cost banks worldwide.

Subramaniam, who used the online soubriquet JiLsi, was remanded in custody at his own request at Blackfriars crown court today after pleading guilty to conspiracy to defraud and five counts of furnishing false information. Judge John Hillen warned it was "inevitable" he faced a "substantial custodial sentence".

A Sri Lankan-born British citizen, Subramaniam was a former member of ShadowCrew, DarkMarket's forerunner, which was uncovered by the US Secret Service in 2004. "JiLsi was one of the highest in cybercrime in this country with what he managed to achieve setting up a forum globally. No JiLsi, no DarkMarket," said one Soca investigator.

Its 2,000 members never met in real life. Quality, not quantity, was the key. DarkMarket was fastidious in banning "rippers" who would cheat other criminals. Honour among thieves was paramount.

It operated an "escrow" service, with payments and goods exchanged through a third party – "like a PayPal for criminals", the judge observed, and an arbitration service resolved disputes. To keep off the radar, the rules were strict: no firearms, drugs or counterfeit currency.

Built on a pyramid structure, administrators decided who joined, moderators ran specific site sections, and reviewers vetted wannabes – each demanding 5% or £250 per transaction as a fixer's fee.

To get on, criminals had to present details of 100 compromised cards free of charge - 50 to one reviewer, 50 to another. Reviewers would test the cards and write an online review of customer satisfaction – just like eBay customers. "If the cards did what they were supposed to … they would be recommended. If not they weren't allowed in," said the investigator.

Payment was via accounts on WebMoney, or E-Gold. "It was the QuickTime method of sending money anywhere."

Subramaniam was one of the top administrators. He kept his operating system on memory sticks. But when one was stolen, costing him £100,000 in losses and compromising the site's security, he was downgraded to reviewer. Surveillance officers caught him logging on to the website as JiLsi unaware the fellow criminal MasterSplyntr he was talking to was, in fact, an FBI agent called Keith Mularski.

Considerable money was exchanged, though actual transactions took place away from the site for security reasons. One buyer spent £250,000 on stolen personal information in just six weeks.

Described as "a very quiet man", Subramaniam worked at Pizza Hut and as a dispatch courier. "He owned three houses but was largely itinerant," said Sharon Lemon, Soca deputy director. "The key to investigations of this sort is finding the evidence to connect the online persona with a living, breathing person."

Harendra de Silva QC, defending Subramaniam, said the "evidence was unchallenged" but said the "question of interpretation does arise in certain areas" and there would be submissions on "nuance" of the fraud in so far as it applied to his client. He is charged alongside John McHugh, 66, known as Devilman, also a site reviewer who has pleaded guilty to conspiracy to defraud and at whose Doncaster home officers found a credit card-making factory. The two will be sentenced later.

But the battle against cybercrime continues. "This was one of the top 10 sites in the world, but there are more than 100 we know of globally, and another 100 we don't yet know of," said the investigators.
In the DarkMarket

DarkMarket price list

Trusted vendors on DarkMarket offered a smorgasbord of personal data, viruses, and card-cloning kits at knockdown prices. Going rates were:

Dumps Data from magnetic stripes on batches of 10 cards. Standard cards: $50. Gold/platinum: $80. Corporate: $180.

Card verification values Information needed for online transactions. $3-$10 depending on quality.

Full information/change of billing Information needed for opening or taking over account details. $150 for account with $10,000 balance. $300 for one with $20,000 balance.

Skimmer Device to read card data. Up to $7,000.

Bank logins 2% of available balance.

Hire of botnet Software robots used in spam attacks. $50 a day.

Credit card images Both sides of card. $30 each.

Embossed card blanks $50 each.

Holograms $5 per 100.

The 'Israelification' of airports: High security, little bother

2010-01-07T05:47:00.000-08:00

December 30, 2009

Cathal Kelly

While North America's airports groan under the weight of another sea-change in security protocols, one word keeps popping out of the mouths of experts: Israelification.

That is, how can we make our airports more like Israel's, which deal with far greater terror threat with far less inconvenience.

"It is mindboggling for us Israelis to look at what happens in North America, because we went through this 50 years ago," said Rafi Sela, the president of AR Challenges, a global transportation security consultancy. He's worked with the RCMP, the U.S. Navy Seals and airports around the world.

"Israelis, unlike Canadians and Americans, don't take s--- from anybody. When the security agency in Israel (the ISA) started to tighten security and we had to wait in line for — not for hours — but 30 or 40 minutes, all hell broke loose here. We said, 'We're not going to do this. You're going to find a way that will take care of security without touching the efficiency of the airport."

That, in a nutshell is "Israelification" - a system that protects life and limb without annoying you to death.

Despite facing dozens of potential threats each day, the security set-up at Israel's largest hub, Tel Aviv's Ben Gurion Airport, has not been breached since 2002, when a passenger mistakenly carried a handgun onto a flight. How do they manage that?

"The first thing you do is to look at who is coming into your airport," said Sela.

The first layer of actual security that greets travellers at Tel Aviv's Ben Gurion International Airport is a roadside check. All drivers are stopped and asked two questions: How are you? Where are you coming from?

"Two benign questions. The questions aren't important. The way people act when they answer them is," Sela said.

Officers are looking for nervousness or other signs of "distress" — behavioural profiling. Sela rejects the argument that profiling is discriminatory.

"The word 'profiling' is a political invention by people who don't want to do security," he said. "To us, it doesn't matter if he's black, white, young or old. It's just his behaviour. So what kind of privacy am I really stepping on when I'm doing this?"

Once you've parked your car or gotten off your bus, you pass through the second and third security perimeters.

Armed guards outside the terminal are trained to observe passengers as they move toward the doors, again looking for odd behaviour. At Ben Gurion's half-dozen entrances, another layer of security are watching. At this point, some travellers will be randomly taken aside, and their person and their luggage run through a magnometer.

"This is to see that you don't have heavy metals on you or something that looks suspicious," said Sela.

You are now in the terminal. As you approach your airline check-in desk, a trained interviewer takes your passport and ticket. They ask a series of questions: Who packed your luggage? Has it left your side?

"The whole time, they are looking into your eyes — which is very embarrassing. But this is one of the ways they figure out if you are suspicious or not. It takes 20, 25 seconds," said Sela.

Lines are staggered. People are not allowed to bunch up into inviting targets for a bomber who has gotten this far.

At the check-in desk, your luggage is scanned immediately in a purpose-built area. Sela plays devil's advocate — what if you have escaped the attention of the first four layers of security, and now try to pass a bag with a bomb in it?

"I once put this question to Jacques Duchesneau (the former head of the Canadian Air Transport Security Authority): say there is a bag with play-doh in it and two pens stuck in the play-doh. That is 'Bombs 101' to a screener. I asked Ducheneau, 'What would you do?' And he said, 'Evacuate the terminal.' And I said, 'Oh. My. God.'

"Take Pearson. Do you know how many people are in the terminal at all times? Many thousands. Let's say I'm (doing an evacuation) without panic — which will never happen. But let's say this is the case. How long will it take? Nobody thought about it. I said, 'Two days.'"

A screener at Ben-Gurion has a pair of better options.

First, the screening area is surrounded by contoured, blast-proof glass that can contain the detonation of up to 100 kilos of plastic explosive. Only the few dozen people within the screening area need be removed, and only to a point a few metres away.

Second, all the screening areas contain 'bomb boxes'. If a screener spots a suspect bag, he/she is trained to pick it up and place it in the box, which is blast proof. A bomb squad arrives shortly and wheels the box away for further investigation.

"This is a very small simple example of how we can simply stop a problem that would cripple one of your airports," Sela said.

Five security layers down: you now finally arrive at the only one which Ben-Gurion Airport shares with Pearson — the body and hand-luggage check.

"But here it is done completely, absolutely 180 degrees differently than it is done in North America," Sela said.

"First, it's fast — there's almost no line. That's because they're not looking for liquids, they're not looking at your shoes. They're not looking for everything they look for in North America. They just look at you," said Sela. "Even today with the heightened security in North America, they will check your items to death. But they will never look at you, at how you behave. They will never look into your eyes ... and that's how you figure out the bad guys from the good guys."

That's the process — six layers, four hard, two soft. The goal at Ben-Gurion is to move fliers from the parking lot to the airport lounge in a maximum of 25 minutes.

This doesn't begin to cover the off-site security net that failed so spectacularly in targeting would-be Flight 253 bomber Umar Farouk Abdulmutallab — intelligence. In Israel, Sela said, a coordinated intelligence gathering operation produces a constantly evolving series of threat analyses and vulnerability studies.

"There is absolutely no intelligence and threat analysis done in Canada or the United States," Sela said. "Absolutely none."

But even without the intelligence, Sela maintains, Abdulmutallab would not have gotten past Ben Gurion Airport's behavioural profilers.

So. Eight years after 9/11, why are we still so reactive, so un-Israelified?

Working hard to dampen his outrage, Sela first blames our leaders, and then ourselves.

"We have a saying in Hebrew that it's much easier to look for a lost key under the light, than to look for the key where you actually lost it, because it's dark over there. That's exactly how (North American airport security officials) act," Sela said. "You can easily do what we do. You don't have to replace anything. You have to add just a little bit — technology, training. But you have to completely change the way you go about doing airport security. And that is something that the bureaucrats have a problem with. They are very well enclosed in their own concept."

And rather than fear, he suggests that outrage would be a far more powerful spur to provoking that change.

"Do you know why Israelis are so calm? We have brutal terror attacks on our civilians and still, life in Israel is pretty good. The reason is that people trust their defence forces, their police, their response teams and the security agencies. They know they're doing a good job. You can't say the same thing about Americans and Canadians. They don't trust anybody," Sela said. "But they say, 'So far, so good'. Then if something happens, all hell breaks loose and you've spent eight hours in an airport. Which is ridiculous. Not justifiable

"But, what can you do? Americans and Canadians are nice people and they will do anything because they were told to do so and because they don't know any different."

Safety tips especially for women

2009-12-23T19:11:00.001-08:00

Crucial Because of recent abductions In daylight hours, refresh yourself Of these things to do In an emergency situation...

This is for you, And for you to share With your wife, Your children, Everyone you know.

After reading these 9 crucial tips, Forward them to someone you care about.

It never hurts to be careful In this crazy world we live in.

1. Tip from Tae Kwon Do : The elbow is the strongest point On your body. If you are close enough to use it, do!

2. Learned this from a tourist guide. If a robber asks for your wallet and/or purse, DO NOT HAND IT TO HIM. Toss it away from you.... Chances are that he is more interested In your wallet and/or purse than you, And he will go for the wallet/purse. RUN LIKE MAD IN THE OTHER DIRECTION!

3. If you are ever thrown into the trunk of a car, Kick out the back tail lights and stick your arm out the hole And start waving like crazy. The driver won't see you, but everybody else will. This has saved lives.

4. Women have a tendency to get into their cars after shopping, eating, working, etc., and just sit (doing their checkbook, or making a list, etc. DON'T DO THIS!) The predator will be watching you, and this Is the perfect opportunity for him to get in On the passenger side, put a gun to your head, And tell you where to go. AS SOON AS YOU GET INTO YOUR CAR, LOCK THE DOORS AND LEAVE.

If someone Is in the car With a gun To your head DO NOT DRIVE OFF, Repeat:DO NOT DRIVE OFF! Instead gun the engine And speed into anything, wrecking the car. Your Air Bag will save you. If the person is in the back seat They will get the worst of it. As soon as the car crashes Bail out and run. It is better than having them find your body In a remote location.

5. A few notes about getting Into your car in a parking lot, Or parking garage:

A.) Be aware: Look around you, Look into your car, At the passenger side floor , And in the back seat

B.) If you are parked next to a big van, Enter your car from the passenger door. Most serial killers attack their victims By pulling them into their vans while the women Are attempting to get into their cars..

C.) Look ! at th e car Parked on the driver's side of your vehicle, And the passenger side... If a male is sitting alone In the seat nearest your car, you may want to walk back Into the mall, or work, and get a Guard/policeman to walk you back out.. IT IS ALWAYS BETTER TO BE SAFE THAN SORRY. (And better paranoid than dead.)

6. ALWAYS take the elevator Instead of the stairs. Stairwells are horrible places to be alone And the perfect crime spot. This is especially true at NIGHT!)

7. If the predator has a gun And you are not under his control, ALWAYS RUN!

The predator! will only hit you (a running target) 4 in 100 times; and even then, It most likely WILL NOT be a vital organ. RUN, Preferably in a zig -zag pattern!

8. As women, we are always trying To be sympathetic: STOP It may get you raped, or killed. Ted Bundy, the serial killer, was a good-looking, Well educated man, who ALWAYS played On the sympathies of unsuspecting women. He walked with a cane, or a limp,! ;and often Asked 'for help' into his vehicle or with his vehicle, Which is when he abducted His next victim.

9. Another Safety Point: Someone just told me that her friend heard A crying baby on her porch the night before last, And she called the police because it was late And she thought it was weird. The police told her 'Whatever you do, DO NOT Open the door.' The lady then said that it sounded like the baby ! Had crawled near a window, and she was worried That it would crawl to the street and get run over. The policeman said, 'We already have a unit on the way, Whatever you do, DO NOT open the door.' He told her that they think a serial killer Has a baby's cry recorded and uses it to coax women out of their homes thinking that someone dropped off a baby. He said they have not verified it, but have had several calls by women saying that they hear baby's cries outside their doors when they're home alone at night.

10. Water scam! If you wake up in the middle of the night to hear all your taps outside running or what you think is a burst pipe, DO NOT GO OUT TO INVESTIGATE! These people turn on all your outside taps full ball so that you will go out to investigate and then attack.

Stay alert, keep safe, and look out for your neighbors!

Please pass this on This e-mail should probably be taken seriously because the Crying Baby Theory was mentioned on America 's Most Wanted when they profiled the serial killer in Louisiana

Correct Way to Arrest a Terrorist

2009-09-25T17:50:00.001-07:00

Why can't we all just get along?

2009-09-16T07:57:00.000-07:00

Smart thieves

2009-09-03T19:04:00.000-07:00

This gives us something to think about with all our new electronic technology.

GPS
A couple of weeks ago a friend told me that someone she knew had their car broken into while they were at a football game.. Their car was parked on the green which was adjacent to the football stadium and specially allotted to football fans. Things stolen from the car included a garage door remote control, some money and a GPS which had been prominently mounted on the dashboard.

When the victims got home, they found that their house had been ransacked and just about everything worth anything had been stolen.

The thieves had used the GPS to guide them to the house.

They then used the garage remote control to open the garage door and gain entry to the house. The thieves knew the owners were at the football game, they knew what time the game was scheduled to finish and so they knew how much time they had to clean out the house. It would appear that they had brought a truck to empty the house of its contents.

Something to consider if you have a GPS - don't put your home address in it. Put a nearby address (like a store or gas station) so you can still find your way home if you need to, but no one else would know where you live if your GPS were stolen.

MOBILE PHONES
This lady has now changed her habit of how she lists her names on her mobile phone after her handbag was stolen. Her handbag, which contained her cell phone, credit card, wallet.. Etc...was stolen. 20 minutes later when she called her hubby, from a pay phone telling him what had happened, hubby says 'I received your text asking about our Pin number and I've replied a little while ago.'

When they rushed down to the bank, the bank staff told them all the money was already withdrawn. The thief had actually used the stolen cell phone to text 'hubby' in the contact list and got hold of the pin number. Within 20 minutes he had withdrawn all the money from their bank account.

Moral of the lesson: Do not disclose the relationship between you and the people in your contact list. Avoid using names like Home, Honey, Hubby, Sweetheart, Dad, Mom, etc....

And very importantly, when sensitive info is being asked through texts, CONFIRM by calling back.

Also, when you're being texted by friends or family to meet them somewhere, be sure to call back to confirm that the message came from them. If you don't reach them, be very careful about going places to meet 'family and friends' who text you.

Failed robbery

2009-08-31T06:09:00.000-07:00

Backdating Likely More Widespread

2009-08-18T05:47:00.000-07:00

By MARK MAREMONT

The majority of companies that improperly backdated stock options never were caught by regulators or confessed to the practice, according to a new academic study.

Researchers at the University of Houston's C.T. Bauer College of Business used a sophisticated statistical test to sift through more than 4,000 publicly traded companies for those with patterns of granting options at abnormally favorable times, often at low points for their share prices.

The study identified 141 companies with such advantageous options-granting practices that the researchers concluded they were highly likely to have been involved in backdating. Ninety-two of those companies never were publicly linked to investigations or announced earnings restatements related to backdating.
Report

* A study of companies with abnormally favorable patterns of executive stock option grant timing

The companies include advertising giant Omnicom Group Inc., retailer Dress Barn Inc., trucking firm J.B. Hunt Transport Services Inc. and equipment-rental concern United Rentals Inc.

Officials at the companies, which showed some of the strongest signs of likely backdating in the study, had no comment or said they found no evidence of wrongdoing.

The unpublished study is the latest sign since the backdating scandal erupted in 2006 that the practice might have been more widespread than thought at the time. Other researchers have drawn a similar conclusion.

Scott Whisenant and Rick Edelson, authors of the University of Houston study, said such abnormally favorable options-granting patterns would be expected to occur by chance in only a couple of companies that they examined.

Still, the study cautioned that the findings are "purely statistical" and don't "claim to provide categorical or absolute legal proof that any specific company has engaged in backdating."

Backdating companies reached back in time by weeks or months to select a date when their shares were trading at low points, then represented that options had been awarded to executives at that time. The practice gave executives a head start on rich options profits, generally contravening accounting and disclosure rules.

Employee options allow the recipient to buy a particular stock at a preset price for a period of time, usually a decade.

In the wake of the scandal, scores of companies conducted internal probes, and the Securities and Exchange Commission launched investigations into more than 140 firms. The agency has filed civil charges against 24 companies and 66 individuals for backdating-related offenses, and at least 15 people have been convicted of criminal conduct.

Mr. Edelson said extrapolating from the study's findings suggests that only one-third of all companies that backdated were investigated or caught. That would mean "at least 500 are still undisclosed," according to the study. Mr. Edelson briefed the SEC on the research a year ago, providing a preliminary list of suspected companies.

An SEC spokesman said the agency "appreciated the input" but wouldn't confirm or deny whether it sparked any enforcement actions.

Stephen J. Crimmins, a securities lawyer at K&L Gates LLP in Washington, said the SEC devoted lots of resources to backdating cases but now is looking to other problems. "They came down like a ton of bricks on options backdating, and they believe the message has been sent and received," he said.

Plaintiffs' lawyers still could file fresh backdating lawsuits, but the statute of limitations may complicate claims involving grants made more than five years ago, Mr. Crimmins said.

The study doesn't name the companies that the researchers concluded were highly likely to have backdated options. But the authors provided a list of companies to The Wall Street Journal, which compared options-grant dates listed in the companies' securities filings with their stock prices.

At Dress Barn, based in Suffern, N.Y., securities filings show that top officials received options five times at unusual low points between 1996 and 2002, when backdating became difficult because of tighter rules.

A 1996 award was dated at that year's lowest stock price, while one in 1999 came at the bottom of a trough in the stock price. An April 2001 award came at the lowest price of that year's second quarter.

Some of the well-timed options went to Chairman Elliot S. Jaffe and Chief Executive David R. Jaffe, members of the family that has run Dress Barn since it was founded in 1962.

Dress Barn did an internal review of its options awards when the scandal erupted, and "we didn't feel there was an issue," said Armand Correia, the retailer's chief financial officer, who got options on two of those dates. The company's board and outside auditors were satisfied the grants were proper based on board minutes and other evidence, he said, and the firm didn't feel the need to disclose the review to shareholders.

At J.B. Hunt, CEO Kirk Thompson and other executives were granted options dated at low points in 1997, 2000 and 2001, according to securities filings. Other grants to top officials of the Lowell, Ark., company also came at unusual dips in the stock, including at the bottom of a V-shaped trough in 1998, a yearly low for J.B. Hunt shares.

In a statement, a J.B. Hunt official said "no backdating occurred," adding that the firm's internal auditors investigated the issue in 2006 and found nothing significant. The official said the findings were reviewed by the firm's outside auditors.

United Rentals has changed most of its top management following SEC allegations that the equipment-rental firm engaged in accounting misdeeds between 1998 and 2002.

A former chief financial officer, Michael J. Nolan, pleaded guilty to criminal charges and settled SEC allegations, while former United Rentals President John N. Milne is contesting criminal and civil charges.

Messrs. Nolan and Milne were among the United Rental executives who received a total of more than five million stock options in two favorably timed grants in 1998. One award in October was dated at the lowest price of the entire year. In 2002, four of the officers, including Messrs. Nolan and Milne, cashed in part of the October 1998 grant for a $14.1 million profit, securities filings show.

In a statement, United Rentals said the Greenwich, Conn., company in 2006 conducted a review of its historical options grants, including the October 1998 award, with the assistance of outside counsel. The review "found substantial evidence that these options were appropriately granted and approved on their recorded date."

A lawyer for Mr. Nolan declined to comment. A lawyer for Mr. Milne had no comment.

At Omnicom, a New York holding company for ad firms such as BBDO Worldwide, securities filings show that one options grant to top officials came in March 2000 at the lowest closing price of that year's first six months.

All three grants in 2001 came at unusually low points, including a giant award of four million options to CEO John Wren just as the stock dipped to a quarterly low. Mr. Wren still holds all of those options.

An Omnicom spokeswoman had no comment.

Special IRS rule for Ponzi victims.

2009-08-07T09:02:00.000-07:00

The Internal Revenue Service has begun sending out refund checks to victims of Bernie Madoff’s scheme who’ve taken advantage of a special IRS rule for Ponzi victims. The IRS is now repaying investors who’ve paid taxes on money they thought they made on investments with Madoff’s firm.
Ponzi victims can get expert tax help for maximizing their tax benefits to help them regain their financial welfare. Taxpayers can recover 30-40% of their losses by filing tax theft loss deductions and filing amended tax returns to recover some of their financial losses. For instance, if you’ve lost $100,00 million in this scheme, you can recoup $30 to $40 million of that in taxes.
The only way for these folks who lost out and got caught up in investment fraud to get some of their money back is to get specialized investment fraud representation. Madoff victims will have to amend their tax returns - which is a complicated and technical process.

The IRS has also denied tax refunds in some cases. If you don’t get specialized tax help to assist you in recovering your investment fraud losses, you could be leaving money behind on the table.
The Wall Street Journal reports:

An early trickle of refunds includes checks for substantial amounts, nearly half a million dollars in some cases. The very biggest sums haven’t materialized, however, according to certified public accountants. By some estimates, these could be for tens of millions of dollars.

The Madoff-related tax refunds are arriving after a lot of uncertainty over how the IRS would handle returns filed by burned investors. Tax advisers clashed over how best to retrieve money for clients as the scandal emerged. Some urged people to file amended returns, while others counseled them to hold off.

In March the IRS set the stage for large refunds with a generous reading of rules that let investors take a theft loss on their 2008 tax returns.

Those suing third parties get less-generous treatment because they have a better prospect of recovering money.

How to Keep Your Valuables Safe When You Travel

2009-08-01T10:21:00.000-07:00

CIA Had Secret Al Qaeda Plan

2009-07-12T18:14:00.000-07:00

* JULY 13, 2009

CIA Had Secret Al Qaeda Plan
Initiative at Heart of Spat With Congress Examined Ways to Seize, Kill Terror Chiefs

By SIOBHAN GORMAN

WASHINGTON -- A secret Central Intelligence Agency initiative terminated by Director Leon Panetta was an attempt to carry out a 2001 presidential authorization to capture or kill al Qaeda operatives, according to former intelligence officials familiar with the matter.

Sen. Dianne Feinstein said CIA Director Panetta, above, told lawmakers Vice President Cheney ordered information be withheld from Congress.

The precise nature of the highly classified effort isn't clear, and the CIA won't comment on its substance.

According to current and former government officials, the agency spent money on planning and possibly some training. It was acting on a 2001 presidential legal pronouncement, known as a finding, which authorized the CIA to pursue such efforts. The initiative hadn't become fully operational at the time Mr. Panetta ended it.

In 2001, the CIA also examined the subject of targeted assassinations of al Qaeda leaders, according to three former intelligence officials. It appears that those discussions tapered off within six months. It isn't clear whether they were an early part of the CIA initiative that Mr. Panetta stopped.

The revelations about the CIA and its post-9/11 activities have emerged amid a renewed fight between the agency and congressional Democrats. Last week, seven Democratic lawmakers on the House Intelligence Committee released a letter that talked about the CIA effort, which they said Mr. Panetta acknowledged hadn't been properly vetted with Congress. CIA officials had brought the matter to Mr. Panetta's attention and had recommended he inform Congress.

Neither Mr. Panetta nor the lawmakers provided details. Mr. Panetta quashed the CIA effort after learning about it June 23.

The battle is part of a long-running tug of war between the executive branch and the legislature about how to oversee the activities of the country's intelligence services and how extensively the CIA should brief Congress. In recent years, in the light of revelations over CIA secret prisons and harsh interrogation techniques, Congress has pushed for greater oversight. The Obama administration, much like its predecessor, is resisting any moves in that direction.

Most recently, House Speaker Nancy Pelosi, in a dispute over what she knew about the use of waterboarding in interrogating terror suspects, has accused the agency of lying to lawmakers about its operations.

Republicans on the panel say that the CIA effort didn't advance to a point where Congress clearly should have been notified.

CIA spokesman Paul Gimigliano said the agency "has not commented on the substance of the effort." He added that "a candid dialogue with Congress is very important to this director and this agency."

One former senior intelligence official said the program was an attempt "to achieve a capacity to carry out something that was directed in the finding," meaning it was looking for ways to capture or kill al Qaeda chieftains.

The official noted that Congress had long been briefed on the finding, and that the CIA effort wasn't so much a program as "many ideas suggested over the course of years." It hadn't come close to fruition, he added.

Michigan Rep. Pete Hoekstra, the top Republican on the House Intelligence Committee, said little had been spent on the efforts -- closer to $1 million than $50 million. "The idea for this kind of program was tossed around in fits and starts," he said.

Senior CIA leaders were briefed two or three times on the most recent iteration of the initiative, the last time in the spring of 2008. At that time, CIA brass said that the effort should be narrowed and that Congress should be briefed if the preparations reached a critical stage, a former senior intelligence official said.

Amid the high alert following the Sept. 11 terrorist attacks, a small CIA unit examined the potential for targeted assassinations of al Qaeda operatives, according to the three former officials. The Ford administration had banned assassinations in the response to investigations into intelligence abuses in the 1970s. Some officials who advocated the approach were seeking to build teams of CIA and military Special Forces commandos to emulate what the Israelis did after the Munich Olympics terrorist attacks, said another former intelligence official.

"It was straight out of the movies," one of the former intelligence officials said. "It was like: Let's kill them all."

The former official said he had been told that President George W. Bush and Vice President Dick Cheney didn't support such an operation. The effort appeared to die out after about six months, he said.

Former CIA Director George Tenet, who led the agency in the aftermath of the 2001 attacks, declined through a spokesman to comment.

Also in September 2001, as CIA operatives were preparing for an offensive in Afghanistan, officials drafted cables that would have authorized assassinations of specified targets on the spot.

One draft cable, later scrapped, authorized officers on the ground to "kill on sight" certain al Qaeda targets, according to one person who saw it. The context of the memo suggested it was designed for the most senior leaders in al Qaeda, this person said.

Eventually Mr. Bush issued the finding that authorized the capturing of several top al Qaeda leaders, and allowed officers to kill the targets if capturing proved too dangerous or risky.

Lawmakers first learned specifics of the CIA initiative the day after Mr. Panetta did, when he briefed them on it for 45 minutes.

House lawmakers are now making preparations for an investigation into "an important program" and why Congress wasn't told about it, said Rep. Jan Schakowsky, an Illinois Democrat, in an interview.

On Sunday, lawmakers criticized the Bush administration's decision not to tell Congress. Senate Intelligence Committee Chairman Dianne Feinstein, a Democrat from California, hinted that the Bush administration may have broken the law by not telling Congress.

"We were kept in the dark. That's something that should never, ever happen again," she said. Withholding such information from Congress, she said, "is a big problem, because the law is very clear."

Ms. Feinstein said Mr. Panetta told the lawmakers that Mr. Cheney had ordered that the information be withheld from Congress. Mr. Cheney on Sunday couldn't be reached for comment through former White House aides.

The Senate's second-ranking official, Democratic Sen. Dick Durbin of Illinois, and Vermont Democratic Sen. Patrick Leahy, chairman of the Senate Judiciary Committee, echoed those concerns and called for an investigation, an indication of how the politics of intelligence continues to bedevil the CIA.

Separately, Attorney General Eric Holder is considering whether to order a criminal probe into whether treatment of terrorism detainees exceeded guidelines set by the Justice Department, administration officials said.

President Barack Obama and Mr. Holder have said they don't favor prosecuting lawyers who wrote legal justifications for interrogation methods that the president and his attorney general have declared to be torture. They have sought to protect CIA officers who followed the legal guidelines.

"The Department of Justice will follow the facts and the law with respect to any matter," said Matthew Miller, a department spokesman. "We have made no decisions on investigations or prosecutions, including whether to appoint a prosecutor to conduct further inquiry."

Your SSN Can Now Be Accurately Guessed Using Date and Place of Birth

2009-07-08T18:54:00.000-07:00

It seems that nothing is safe any more. And now your Social Security Number, the lynchpin to you credit score, taxes, government benefits and more, is under attack. It can be guessed, with a staggering degree of accuracy, using simple information you probably have on sites like Facebook and MySpace.

We have all heard the stories about Identity Theft and we all take precautions to be careful with our SSN. In fact, these days I’ll only put it down on a form if I absolutely have to; that includes medical forms that you often have to fill out when you visit a GP or specialist. But that may now be a moot point, because two Carnegie Mellon researchers have basically reverse-engineered the SSN formula to gain access to that most precious and private number.

John Timmer of Arstechnica.com reported yesterday that these two bright sparks used two practices that had been designed to protect the number, and make it fraud-proof, as a way to discover the code from those two simple facts – date of birth, and place of birth; two facts that are on most public profiles.

To know how they did it, you need to know the basic structure of the SSN. As John describes it, it splits into three zones:

The first three digits are based on the state where the SSN was originally assigned, and the next two are what's termed a group number. The last four digits are ostensibly assigned at random. Since the late 1980s, the government has promoted an initiative termed "Enumeration at Birth" that seeks to ensure that SSNs are assigned shortly after birth, which should limit the circumstances under which individuals apply for them later in life (and hence, make fraudulent applications easier to detect).

From there, the article gets pretty heavily into some technical data and statistics that I won’t bore you with here. If you’re interested, read all the details of the algorithm that reconstructs your Social Security Number. But all you really need to know is that if the SSN code has been cracked, or hacked, then it won’t be long before that information gets into the wrong hands.

So, should you be worried, and what can you do?

Well, as John Timmer explains, although some of the SSN digits are relatively easy to obtain, others are more tricky:

Getting the last four digits right was substantially harder. The authors used a standard of getting the whole SSN right within 10 tries, and could only manage that about 0.1 percent of the time even in the later period. Still, small states were somewhat easier—for Delaware in 1996, they had a five percent success rate.

BUT, and this is a big but, it seems as though modern security systems and automated forms DO NOT REQUIRE the whole SSN. As long as it is cross-referenced with the date and place of birth, up to two numbers can be incorrect. John continues:

They often allow several failed verification attempts per IP address before blacklisting it. Given these numbers, the authors estimate that even a moderate-sized botnet of 10,000 machines could successfully obtain identity verifications for younger residents of West Virginia at a rate of 47 a minute.

Think about it: 47 a minute! Considering how prevalent ID theft is around the world, and how sophisticated thieves are becoming, I think this is enough to cause concern for the average US citizen. And as such, it may be time to start taking precautions.

First, see if you can remove your private information, or replace your place and date of birth with something more vague on your social networking sites and other public profiles. That one should be relatively easy, if a little time consuming.

Second, continue to practice good personal security. Shred any important documents that you are throwing out, and don’t leave sensitive data in a place where thieves could easily find it. I know a lot of people throw things in the car and forget about it, but if the car were stolen or broken into, it could be the start of much bigger problems.

Third, keep on top of your credit reports. You are allowed one free each year from each of the three major credit bureaus. DO NOT use freecreditreport.com, they charge. Instead, go to Annual Credit Report here. If you see anything suspicious or just plain wrong, contact the bureau immediately.

Finally, consider some ID theft protection. I use LifeLock because I got a great deal on it, and although not 100% effective, it does cover me if anything should happen. But LifeLock is basically just a method of putting 90-day fraud alerts on your credit reports, which you can do yourself for free. You can find the information for each bureau here:

EXPERIAN

EQUIFAX

TRANSUNION

For further reading, visit the FTC’s site. It has some great information. Stay safe folks.

The Improbable Rise and Fall of E-Gold

2009-06-10T06:01:00.000-07:00

MELBOURNE, Florida — In a sparsely decorated office suite two floors above a neighborhood of strip malls and car dealerships, former oncologist Douglas Jackson is struggling to resuscitate a dying dream.

Jackson, 51, is the maverick founder of E-Gold, the first-of-its-kind digital currency that was once used by millions of people in more than a hundred countries. Today the currency is barely alive.

Stacks of cardboard evidence boxes in the office, marked “U.S. Secret Service,” help explain why, as does the pager-sized black box strapped to Jackson’s ankle: a tracking device that tells his probation officer whenever he leaves or enters his home.

“It’s supposed to be jail,” he says. “Only it’s self-administered.”

Jackson, whose six-month house arrest ends this month, recently met with Wired.com for his first in-depth interview since pleading guilty last year to money laundering-related crimes, and to operating an unlicensed money transmitting service. His tale is one of countless upstarts and entrepreneurs who approached the internet with big dreams, only to be chastened by sobering realities. But his rise and fall also offers a unique glimpse at the web’s frontier halcyon days, and the wilderness landscape that still covers much of the unregulated and un-policed web, where fraud artists prospect for riches alongside pioneers, and sometimes stake, and win, a claim on their territory.

Despite the shackle, Jackson’s conviction isn’t black and white. In a twist still unacknowledged by prosecutors, Jackson turned E-Gold for a time into one of law enforcement’s most productive honey pots, providing information that helped lead to the arrest and conviction of some of the web’s most wanted credit card thieves and hackers. He’s now working with regulatory agencies to try to bring back E-Gold, steps he says he would have taken voluntarily years ago if authorities had given him a chance.

Following his story, the picture that emerges of Jackson is not a portrait of a calculating criminal. Rather it is one of a naive visionary who thought his dream was bigger than any financial regulations, who got in over his head, and who finally struggled, too late, to make up for his missteps.

“There was no indication at all that anyone had a problem with what he was doing,” says Richard Timberlake, a former economics professor at the University of Georgia and author of several books on U.S. banking. Timberlake visited Jackson at his E-Gold office in 1997 and vouches for Jackson’s innocent intentions. “He was always very honest and very forthright in what he was trying to do as a business. Even the Federal Reserve believed it was legitimate.”

—

The story of the first digital currency backed entirely by gold and silver began in 1995, while Jackson was still treating cancer patients. A longtime student of economic history, Jackson was convinced that gold was a superior currency to paper money, despite the consensus among professional economists that a gold-standard prevented governments from responding quickly to monetary crises; when an economy faltered, treasuries couldn’t easily manufacture gold bars to stimulate it.

The United States dropped its reliance on gold in 1971, but Jackson doubted the wisdom of this move. “Many a paper currency has spun out of orbit in a calamitous trajectory,” he once wrote. “There has never been an instance of gold or silver being discarded as worthless.”

It was time, Jackson mused, for a radical rethink of money. Had he been born in another era, he could scarcely have acted on his beliefs. But the nascent internet changed everything. The international, 24-hour churn of e-commerce cried out for a monetary system that transcended borders and time zones. So in early 1996, Jackson began programming a back-end system for a new electronic currency, practicing medicine by day, and coding by night.

He hired a software engineer to create the user interface, and four months later launched E-Gold.

As Jackson envisioned it, E-Gold was a private, international currency that would circulate independent of government controls, and stand impervious to the market’s highs and lows. Brimming with evangelical enthusiasm, Jackson proclaimed it a cure for the modern monetary system’s ills and described it at one point as “an epochal change in human destiny” and “probably the greatest benefit to humanity that’s ever been thought of.”

Though E-Gold would fail to change the world, libertarians and privacy-conscious netizens liked the service, which allowed them to open accounts anonymously. And international sellers appreciated the ease with which they could transact across borders

Over the next few years, Jackson drained his retirement accounts, sold his medical practice and charged credit cards to raise more than $1 million to nurture the fledgling venture. Cynics might have considered him just another internet hustler looking to strike it rich, but those who knew him say he was a true believer. “He truly thinks that having a gold-backed currency is what’s needed in the world,” says James Clement, a libertarian attorney who met Jackson in 2003. “I don’t think anyone would have stuck with it … other than that he thinks it’s extremely important and somebody has to do this.”

Jackson drew his inspiration from economist Vera Smith’s influential 1936 treatise The Rationale of Central Banking and the Free Bank Alternative, which challenged the tenets of banking. “She wrote in the depths of the Depression, and poses some of the most compelling questions about central banking systems,” Jackson says. “Central banks should attenuate monetary disorder and prevent fluctuations, but ironically they sometimes amplify it.”

His commitment started to pay off in 2000, when some 50,000 transactions suddenly passed through his system in just two months — more than the previous three and a half years combined. By that November, E-Gold, now with 20 employees, had processed 1 million transactions, and Jackson’s business reputation was growing. He was invited to speak at the prestigious World Gold Council conference in Rome, the gold mining industry’s leading event. In 2001, the growth continued, with customer accounts expanding from 134,000 to nearly 288,000, holding about $16 million in value.

Initially, Jackson stored the company’s reserves of sovereign coins and ingots in safety deposit boxes in banks around town. When this proved inconvenient for auditing, the company bought an office safe to hold the gold and platinum. “The silver was just stacked around the office,” Jackson says. Ultimately, he converted the sovereigns and ingots to bars and moved them to bank vaults in London and Dubai. At E-Gold’s peak, the currency would be backed by 3.8 metric tons of gold, valued at more than $85 million
Despite the sudden burst of success, the venture was plagued with setbacks. E-Gold’s servers buckled under the growing traffic load, hanging transactions and frustrating users. Copycat entrepreneurs erected their own gold-backed systems — e-Bullion, GoldMoney and OSGold – and poached E-Gold customers. When Jackson finally scaled up his infrastructure in 2003, solving the performance problems, cyber scammers entered the scene, launching a sortie of phishing attacks against users, tricking thousands of them into disclosing their E-Gold passwords, then draining the accounts.

Eventually Jackson deployed an anti-phishing remedy, and business rebounded in September 2004. A year later, customer accounts numbered about 3.5 million in 165 countries, with 1,000 new accounts opening every day. Millions of dollars were zipping through E-Gold’s system 24-hours-a-day, bouncing between the U.S. and Europe, South America and Asia. E-Gold collected 1 percent of every transaction, with a cap at 50 cents.

E-Gold was now second only to PayPal in the online payment industry. At last, Jackson says, he felt relief.

“We had been stuck year-in and year-out on whatever crisis-du-jour required our immediate attention,” he says. Now “we felt like we’d finally achieved a turning point.”

But E-Gold’s increasing popularity with customers drew less-welcome attention as well.

The federal government began to take notice in 2003, when the Secret Service launched an undercover operation against a website called Shadowcrew — a legendary forum for “carders” who trafficked in stolen credit and debit card numbers. Cyber crooks in Eastern Europe were stealing millions of card numbers in phishing and skimming scams, then passing the data to accomplices around the world. The low-end cashers coded the numbers onto blank cards, then siphoned money from ATMs and transmitted the bulk of proceeds back to the former Soviet bloc.

When authorities monitored the criminals’ communications, they discovered that E-Gold was among the carders’ preferred money-transfer methods, because the system allowed users to open accounts and transfer funds anonymously anywhere in the world.

When the Shadowcrew investigation wrapped in October 2004 with the shuttering of the site — and the arrest of more than a dozen members — the Justice Department turned its sights on E-Gold. Its goal was to force the service to comply with regulations governing money-transmitting services like Western Union and Travelex. Federal regulations required those businesses to register with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), to be licensed in states that required it, to diligently authenticate the identity of customers and to file suspicious activity reports on shady-looking customers. But E-Gold wasn’t doing this.

Jackson believed E-Gold was exempt from regulation because it was a payment system not a money transmitter. And although it did transfer money, customers could park balances in their accounts, as with a bank.

But Jackson insisted E-Gold wasn’t a bank, either. It was something new — something the world and the U.S. government hadn’t seen before. He wasn’t alone in this view. Many internet-based payment services, including PayPal during its early years, believed they were exempt from regulation. They mostly flew under the radar of prosecutors until something brought them into the spotlight.

Jackson says he got the first inkling of the rampant, organized crime in his system when he read a June 2005 New York Times story about the growth of the carding forums. “To my horror … E-Gold is mentioned in this ghastly, horrible way of it being, you know, the bitch of criminals,” he says.

He concedes he knew that Ponzi schemers and other scammers sometimes used his system , but he’d always responded to government subpoenas for information about suspicious customer accounts. So he contacted the Secret Service to ask why the agency hadn’t sought his help to track the crooks in the Times story. The agency, which was already secretly targeting E-Gold, ignored him. (The Secret Service didn’t respond to interview inquiries for this story.)

The hammer dropped on E-Gold around 5 p.m. on a mild day in mid-December 2005. A herd of Chevy Suburbans wheeled up to Jackson’s house and expelled more than a dozen FBI and Secret Service agents. Simultaneously across town, the Justice Department’s “Operation Goldwire” unfolded with more agents raiding the offices of Gold and Silver Reserve, the company that operates E-Gold. A third group descended on a co-location facility in Orlando where E-Gold Limited, a holding company for E-Gold’s assets, racked its database servers.

The feds carted away more than 100 boxes of electronic records and paper files, including birth certificates, photos and a deed to the Jackson family burial plot. The gold and silver reserves remained safe overseas, but the government froze the company’s domestic bank accounts. Jackson’s venture was dissolving around him.

Jackson wasn’t sure what the feds hoped to find in all those records; once E-Gold got its systems back online he turned to his database for answers.
He scoured the system for suspicious transactions using key words like “cvv,” dumps” and “cob,” and the names of carders he’d read in the Times. He quickly discovered the disturbing truth about what his libertarian dream had become. “I found out there was quite a bit of stuff going on which law enforcement knew about, but wasn’t asking us about,” he says. “I found, holy smokes, there is a continuing pattern of these so-called carders. There’s, like, a ring that I can distinguish.”

One user named “Segvec” received more than half a million dollars from four others, including a Ukrainian named “Maksik” who sent a rapid stream of cash totaling $300,000. In the “memo” field of the transactions — where the sender can state a reason for the payment — Maksik noted that $17,000 was “for beer.” Another three transactions totaling $89,000 sent over a week’s time were supposedly for Sony Vaio computers.

A New York account-holder named “Potluck” had a pattern of buying $6,000 in postal money orders twice a month, then exchanging them for e-Gold to send to Ukraine. Over a year, he’d transmitted about $150,000.

Jackson had uncovered a constellation of shady accounts doing business with one another. He watched in amazement as the criminal activity expanded before his eyes, and balances in several accounts ballooned, with no sign that the account holder intended to move it out. Segvec alone amassed more than $700,000 in digital gold.

“They weren’t just using us as a good vehicle to trade their data, they were parking value in our system,” Jackson says. E-Gold had unwittingly become banker to the underworld.

Because users could sign up for E-Gold with aliases, there was no easy way for Jackson to determine the real identity of many of his suspects. But the criminals became vulnerable the moment they converted their virtual currency to local cash. This required them to do business with an E-Gold money exchanger — the online equivalent of currency exchangers at international airports — who’d ask for valid ID and contact information. Sometimes the criminals wanted their cash loaded to a debit card and mailed to a drop address, or wired to a traditional bank account; exchangers would have this data, too.

Jackson reached out to about a dozen exchangers in Europe and elsewhere with the account names he was tracking. Some criminals had provided the exchangers with fake credentials, but a surprising number had given their real names or addresses. Jackson soon had the identities of some of the most wanted figures in the underground.

One money exchanger in Northern Ireland revealed that “Segvec” routinely had packages sent to a Tokyo remailer, who forwarded them to a “Stephen Ceres” in Miami. The same exchanger also sold “Stephen Ceres” a Card One debit card with a daily load limit of $9,500. Jackson obtained a list of transactions on the card that linked it to a slew of ATM withdrawals in Miami suburbs. A storm of withdrawals during one five-minute period yielded the cardholder $8,000 in cash.

Jackson, who had been snubbed by the Secret Service and FBI, took the information he uncovered to the U.S. Postal Inspector Service, providing investigators with names, addresses and transaction histories. The postal inspectors passed the information to overseas allies, the FBI, and eventually to the Secret Service as well.

It was a devil’s bargain. Once the feds got a taste of what Jackson could provide, the postal agents began peppering him with requests for more data on other accounts, promising Jackson they’d follow up with a formal court order or subpoena later. He cooperated fully, despite the fact that it violated his user agreement with customers. “We never did get any legal cover whatsoever,” he says ruefully. “We never got our trap-and-trace. We never got our pen register.”

In March 2006, inspectors asked him for information on a carder named “Jilsi,” whom Jackson traced to a money exchanger in the United Kingdom. The exchanger gave him a real name — Renu Subramaniam — a 2-year-old confirmed phone number and the time and location of deposits Subramaniam had made to two London banks. Jackson passed the information to inspectors who told him that the phone number, if correct, would be “the break in the case we have been waiting for, for quite a long time.”

It wasn’t long before carders were being taken down. In May 2007, Markus Kellerer, aka Matrix 001, was arrested in Germany. In July 2007, Subramaniam, who had been an administrator on a carding site called DarkMarket, was arrested in Britain. That same month, authorities in Florida arrested Julio Lopez, aka Blinky, who was connected to a ring of Cuban carders. And last year in Miami, authorities arrested Albert Gonzalez, aka Segvec, allegedly one of the masterminds behind the hack of TJX and other businesses. Jackson had provided authorities with information on all of them.

An FBI agent who was involved in the arrest of a number of carders, but asked not to be identified because he wasn’t authorized to speak, acknowledged that information Jackson provided was “instrumental in helping track people down.”

A year after he began his probe, Jackson began blocking the accounts responsible for the suspicious activity, preventing suspected crooks from getting their loot. E-Gold was on its way to becoming clean, relatively speaking.

As far as the feds were concerned, however, it was too late. A few months later, in April 2007, the Justice Department wrapped up its four-year-long investigation by indicting Jackson and his colleagues on federal charges of money laundering, conspiracy and operating an unlicensed money transmitting business.

“Douglas Jackson and his associates operated a sophisticated and widespread international money remitting business, unsupervised and unregulated by any entity in the world, which allowed for anonymous transfers of value at a click of a mouse,” said U.S. Attorney Jeffrey A. Taylor for the District of Columbia in a press release. “Not surprisingly, criminals of every stripe gravitated to E-Gold as a place to move their money with impunity. As alleged in the indictment, the defendants in this case knowingly allowed them to do so and profited from their crimes.”

Clement, the attorney, disputes the government’s depiction of Jackson. “They automatically assume that E-Gold somehow made it easy for these people involved in money laundering, or [sought criminals] as clients,” says Clement. “But that’s completely the opposite of Doug’s attitude toward any kind of illegal behavior. It would be crazy for somebody to seek out that kind of business.”

Jackson, who’d hocked his future to start E-Gold, now faced the potential of a federal prison term. He was frustrated and confused.

“It never crossed my mind that anyone could seriously want people like us in prison,” he says. “But I guess my bigger fear was that we would go bankrupt, and there would be a train wreck of people that had trusted value to us who couldn’t get their money.”

Timberlake, the economics professor, is convinced that Jackson’s radical dream, his goal of upsetting the economic status quo and overturning the government’s monopoly on money, is what really got E-Gold targeted.

“No matter how innocent a person is you can always find a law that government agents can use to convict him of something,” Timberlake says, “And this is a perfect example of it. Any time anybody tries to produce money, the federal government is going to be on their tail.”
After a year-and-a-half of court wrangling and negotiations, Jackson pleaded guilty last year to conspiracy to operate an unlicensed money transmitting service and conspiracy to commit money laundering. In November he was sentenced to 36 months of supervised released — including six months of house arrest and electronic monitoring, and 300 hours of community service. In addition to forfeiting about $1.2 million to the government, his two companies — Gold and Silver Reserve and E-Gold Limited — were fined $300,000, to be paid in $10,000 monthly installments beginning last month.

The plea agreement is conditional on Jackson revamping his business to comply with regulations governing money-transmitting services — a goal that, Jackson concedes, faces many hurdles. To begin the process of compliance, he suspended the creation of new accounts. Existing customers are now required to submit a government-issued photo ID and proof of residence to authenticate their name, address and other details, and are limited to $1,000 to $3,000 a month in transactions until they pass muster. Customers in high-risk countries — such as Nigeria, Russia and Ukraine — are suspended from making any transactions at all for now. Their money is locked indefinitely in E-Gold’s servers.

Jackson, who always considered himself one of the good guys, acknowledges today that he might have done a better job of policing his system from the start. “In hindsight there’s any number of things that would have been a smarter or better way of approaching things,” he says.

Back in his Melbourne office, the blinds are drawn against the harsh sun, and a wall calendar serves as the room’s sole decor. A belt and freshly dry-cleaned dress shirt, still swathed in plastic wrap, hang from a metal shelf. A one-pound plastic jug of protein powder on Jackson’s desk serves as a reminder of the weight he’s lost since his legal troubles began. When asked what toll the trouble has taken on his family – Jackson and his wife are currently living in different states — there’s a long silence before he clears his throat.

“It’s been a source of distress,” he says finally. “Ten years ago I was an affluent physician.”

Although E-Gold was occasionally profitable, Jackson only drew a salary, like his employees. The two upscale homes he once owned with his wife are long gone. Now his wife and 12-year-old son occupy half a duplex in Pennsylvania near her family, and Jackson lives in a one-bedroom apartment in Melbourne with his 17-year-old son, while the latter finishes high school, and Jackson and his staff attempt to rebuild the business.

Jackson has finally registered E-Gold with FinCEN, and has begun applying to states for money transmitting licenses. The company is also blocking people who appear on the Treasury Department’s list of Specially Designated Nationals and plans to follow bank procedures for verifying customer income and sources of transmitted funds. There are other plans in works to clean up the system as well.

There’s a daunting hill to climb before E-Gold will be operational again, and it remains to be seen whether there will be a market for a scrubbed-down, government-compliant E-Gold. But Jackson seems relieved to be headed in this direction.

“One of the biggest results of this is that we’re getting to the place we wanted to be anyway, which is to have some sort of an explicit set of standards to build against,” he says.

He maintains that he would have done what authorities now want him to do, if they’d just worked with him to devise a plan, instead of treating him like a criminal.

Now, after all of E-Gold ups and down, Jackson hasn’t lost his optimism for the venture, or his knack for florid prose. As he wrote on his blog last year, he looks forward to transforming E-Gold from a marginal player to a respected institution — one, he says, that will serve to “advance the material welfare of mankind.”

How A Thief Opens Your Suitcase

2009-06-02T06:05:00.001-07:00

Stalking Goes High Tech (and How to Protect Yourself)

2009-05-06T15:46:00.000-07:00

It’s easier than ever to stay in touch with people you know — including the ones you really don’t want to hear from.

Growing numbers of men and women report being pursued by stalkers via cell phones, Internet services, GPS systems, wireless video cameras, and other technologies, according to law-enforcement agencies and victims’ groups.

“Technology is more widely available, and so stalkers have more tools to use against their victims,” says Will Marling, executive director of the National Organization for Victim Assistance.

Of the 3.4 million Americans who reported being stalked between 2005 and 2006 — up from 1.4 million annual cases a decade earlier — according to the U.S. Department of Justice, 27% reported being cyberstalked, or stalked through computer programs, while one in 13 said their stalkers used tracking devices to monitor their locations.

E-mail and instant messaging are the most common stalking methods, according to the Justice Department— 83% of victims reported getting unwanted e-mails from their stalkers and 35% reported getting instant messages.

Six percent said that their stalkers stole their identities to open or close financial accounts in their names, steal funds from their existing accounts, or make unauthorized charges to their credit cards.

Marling recalls one man whose ex-girlfriend infiltrated his computer via a Wi-Fi account and repeatedly posted content onto his Web site in his name.

“People who become tech-savvy, as perpetrators they can find weak spots,” he says.

High-tech stalking comes in many forms:

• Caller ID. The Caller ID systems on many new phones reveal callers’ names and locations. Using an online phone directory, a stalker can pinpoint a victim’s new place of residence.

• Cell phones. Whenever a victim’s cell phone is in analogue mode, a radio scanner can intercept it.

• GPS services. A Wisconsin woman wondered at her ex-boyfriend’s ability to continually find her whenever she was driving her car. Then she discovered the global positioning device he had installed beneath her car ’s front grill. Many stalkers use these devices, which pinpoint carriers’ exact locations, to track victims. Telephone-based instant-messenger services and some cell phones’ location services are also potential tracking tools.

“Every cell phone has its own identifier, so you can theoretically know the location someone is in,” says Marling. “It’s definitely a growing problem.”

• Spyware. A Michigan man remotely installed a software program on his estranged wife’s computer; the program would e-mail him daily notifications listing all the sites she visited and the contents of every e-mail she sent or received. Stalkers can also use keystroke loggers, which record every key typed and thus disclose passwords, PINs, Web sites, and e-mails.

• Cameras. Cameras today are more powerful, less expensive, smaller, and easier than ever to secretly place inside a wall. A New Jersey man monitored his ex-wife daily through a video camera in her bedroom.

• Public databases. A surprising amount of information about individuals is public record. For example, the court system of Montgomery County, Pennsylvania, publishes the names and addresses of individuals who obtain protective orders.

• Headers on fax documents. One woman fled an abusive partner, but had to send him papers. She faxed her attorney papers from her shelter’s fax machine, and he in turn faxed them to the abusive partner’s attorney, who passed them along to him. The woman’s partner spotted the shelter location on the fax head and tracked her down, forcing her to relocate a second time.

• E-mail and instant messages. Stalkers send their victims abusive messages. They can also impersonate their victims by sending out messages in the victims’ names. One abuser changed his wife’s e-mail password and sent threatening messages to himself from her e-mail account. Then he took the messages to the police and convinced them to arrest her.

Defending against Stalkers.

Stalkers who use e-mail and other electronic means are sometimes harder for law enforcement to stop. Michelle Garcia, executive director of the Stalking Resource Center, notes that many investigators don’t know how to prove that a stalker’s e-mails came from the stalker — consequently, they don’t count e-mails as evidence.

“We have to get our responders up to speed on how to trace those technologies back to the offenders,” she says.

Technology can also protect victims, however. The Internet is a means to find counselors, employment agencies, housing opportunities, shelters, and support services. It also provides forums for victims to share their stories with each other.

Meanwhile, communities have become much better-equipped to confront stalking. In the last 10 years, new programs for training law enforcement officers, new victims’ support services, and tougher laws have all been introduced.

The Justice Department report offers some advice for keeping safe from stalkers:

• Know who calls you. Use per call (*67) when you get an unknown call, and make sure your phone has caller ID.

• Keep your contact information private. Clear your name from any database that might be published or sold from one company to another.

• Do not send any confidential information via a personal computer. Use a library computer, which a stalker will not be able to track. Marling further advises destroying as much personal information as possible and routinely checking your computer for viruses and intruder programs.

“You have to be smarter than your stalker,” says Marling.

Live Piracy Maps

2009-04-21T15:31:00.000-07:00

Live piracy maps (see samples below) and live piracy reports are available from the ICC International Maritime Bureau, a specialised division of the International Chamber Of Commerce (ICC).

790 Million Reasons The Madoff Feeder Funds Stayed Quiet

2009-04-13T16:00:00.001-07:00

Why was it so easy for Bernie Madoff to pull off a massive Ponzi scheme? Because the funds who led their clients to slaughter fattened up on almost $800 million in fees and really didn’t think it was a good idea to ask too many questions.

This tasty nugget came out of the court documents as prosecutors and plaintiffs’ attorneys try to hunt down ill-gotten gains of Madoff and the cadre of people around him who got rich. Whether any of that money comes back to Madoff clients is another story.

Among the big fee winners, according to the WSJ:
•Banco Santander earned $52.7 million in 2007 and $43.3 million in 2006 in "investment manager's fees."

•A unit of Tremont Group Holdings could have collected as much as $34 million in fees annually.

•J. Ezra Merkin took in almost $170 million from Madoff vehicles over 12 years, according to a complaint against him.

•The granddaddy of Madoff feeder funds, Fairfield Greenwich, collected at least $400 million between 2005- 2008, according to Massachusetts securities regulators.

The Latest Shoe Security for Airport Travelers: MagShoe

2009-03-20T14:19:00.000-07:00

Jon Stewart performed a public service in gutting Jim Cramer

2009-03-13T16:11:00.000-07:00

"As Stewart assumed the role of stern and angry prosecutor that he maintained through most of the 25 minute conversation, Cramer became more and more pathetic," says David Zurawik. "At one point, he tried to slow Stewart's assault by promising to be better in the future. But Stewart reminded him about how much damage had already been done to the economy, the country and citizens' lives by what Cramer blithely referred to as 'shenanigans' last night."
Watch the uncut interview

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 2

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Obama's Housing Plan Creates Opening for Scammers

2009-03-11T07:42:00.000-07:00

Borrowers Who Hire Firms to Renegotiate Mortgages Rarely Come Out Ahead

By JAMES R. HAGERTY

President Barack Obama's foreclosure-prevention plan, announced last week, is designed to give several million troubled borrowers another chance to lower their mortgage payments. But government officials and counseling agencies warn that it also presents a golden opportunity for firms to fleece unsuspecting borrowers.

Over the past few years, there has been a proliferation of firms that charge fees for what they promise will be quick results in negotiating with banks to get easier loan terms. In many cases, the firms take the homeowner's money but never deliver the services promised. Even when the firms do deliver what they promise, they charge fees -- often more than $1,000 -- for services borrowers can receive free. In July, Congress increased to $360 million the funds it has allocated for foreclosure-prevention counseling to organizations that provide the service without charging consumers.

"Borrowers don't need to pay anybody," says William Apgar, a senior adviser to Shaun Donovan, President Obama's new secretary of housing and urban development. But Mr. Apgar and others fear that the recent headlines about the Obama housing plan will prompt more consumers to seek help in the wrong places.

Under the Obama plan, the government will offer incentives and subsidies to persuade mortgage-servicing companies to offer lower monthly payments to borrowers in danger of losing their homes to foreclosure.

The publicity about the plan could be "the greatest advertisement of all for these scamsters," says John Ryan, an executive vice president of the Conference of State Bank Supervisors, which helps coordinate bank regulators. But he adds that his group is working with state and federal regulators to alert consumers and crack down on scams.
Home Truths

The Federal Reserve recently issued advice for people seeking to modify their mortgage:

* Work only with HUD-approved nonprofit counselors. (See www.hud.gov.)
* Don't agree to pay a fee before you are provided with the promised service.
* Beware of people offering "guaranteed" results.
* Don't sign blank forms or documents you haven't read.

In the meantime, fee-charging loan-modification firms "are popping up everywhere," says John Snyder, a manager at NeighborWorks, a nonprofit group formed by Congress to support community-revitalization organizations. In California alone, the state Department of Real Estate has reviewed fee-agreement forms submitted by nearly 300 firms touting loan-modification or similar services and has posted them on its Web site. (The department says it doesn't endorse the firms or their services.) Cable-television stations also have been running ads for services that charge fees, many designed to look as if they come from government agencies or other trusted entities.

Consider the case of Marilyn Elias, a retired medical-records manager in Tempe, Ariz. Last September, when she was exploring ways to reduce her mortgage payments, Ms. Elias's son told her about a company called GSA Mortgage in Phoenix that he thought might be able to help her. She says she paid upfront fees totaling $1,455. "All they did was take my money," says Ms. Elias, a widow. "They haven't done one thing."

In addition, she says, an employee of the firm advised her to skip payments on her mortgage while waiting for a loan modification. That, she says, caused her credit score to plunge, even though she has since caught up with the payments. GSA Mortgage didn't respond to repeated requests for comment.

Wendy Brooks, a mortgage broker for Scout Mortgage in Scottsdale, Ariz., is trying to help Ms. Elias get a loan modification from the company that sends out her monthly mortgage bill, Aurora Loan Services. Ms. Brooks says she won't charge Ms. Elias anything for that help. A spokeswoman for Aurora declined to comment on Ms. Elias's loan.

Jeff Pasquale, an aircraft technician who lives in Lancaster, Calif., says he first tried to deal directly with his mortgage lender, Wells Fargo & Co., to negotiate lower payments. "I tried to handle it myself, and they started jamming me around," he says. He says he didn't seek a free HUD-approved counselor because a colleague had tried that without success.

Instead, Mr. Pasquale says he paid $1,100 about a month ago to a firm called U.S. Loan Assistance Center in Orange, Calif., which he found on the Internet. He says he believes the firm will deliver on its promises and is awaiting the results.

Eric Dena, processing manager at U.S. Loan Assistance Center, says Mr. Pasquale's payment is being held in a trust account until the firm's work is completed. He said his firm works faster than nonprofit counselors.

A spokeswoman for Wells said she couldn't discuss the specifics of Mr. Pasquale's situation, but added: "Wells Fargo encourages borrowers to work with us directly or a nonprofit housing counselor. We see no advantage to hiring third-party companies."

Borrowers are tempted by these firms partly because banks often don't have enough trained staff to cope with all of the calls they get from desperate homeowners and because nonprofit counselors don't always provide good service, says Jack Guttentag, a professor of finance emeritus at the University of Pennsylvania's Wharton School. He operates a Web site that offers free mortgage information called mtgprofessor.com.

In theory, Mr. Guttentag says, it might make sense for some people to pay a modest fee for help in negotiating with banks. But he has found no way to determine which of the fee-charging firms are legitimate. Mr. Guttentag suggests that borrowers first try calling their loan servicers for help. If that doesn't work, he says, borrowers can try to get a free, government-approved counselor. One way to find those is to call the mortgage industry's "Hope Hotline" at 888-995-4673 or click on www.hopenow.com.

Firms that charge big fees for helping with loan modifications are just the latest potential trap for people facing foreclosure. In recent years, many distressed borrowers have fallen for "foreclosure rescue" schemes in which firms or individuals promise to help them avoid foreclosure through arrangements that involve transferring the title of their home to the supposed rescuers.

Rather than solving the problem, the deals typically resulted in the rescuer stripping the remaining equity in the home. As many of today's troubled borrowers have little or no equity remaining in their homes, fee-based loan-modification schemes have eclipsed foreclosure-rescue ones, says Mark Kaufman, Maryland's deputy commissioner of financial regulation.

The Federal Reserve and the Federal Trade Commission have published warnings about what they call "foreclosure scams." State attorneys general also are issuing warnings and in some cases prosecuting firms alleged to have cheated borrowers. U.S. Sen. Herb Kohl, a Wisconsin Democrat, has introduced legislation that would bar "foreclosure consultants" from collecting fees before they complete promised services. Some states, including California, Maryland, Iowa and Florida, already have laws with restrictions on upfront fees for these services.

Madoff Aide Allegedly Got Fake 'Tickets' of Trading

2009-03-09T06:06:00.000-07:00

* MARCH 9, 2009

Madoff Aide Allegedly Got Fake 'Tickets' of Trading

By AMIR EFRATI

A longtime aide to disgraced financier Bernard Madoff instructed two assistants to generate trading tickets, now believed to be bogus, for Mr. Madoff's investing clients, according to information the assistants gave the government in the investigation.

The assistants told prosecutors that their supervisor, Annette Bongiorno, a four-decade veteran of the Madoff firm, would ask them to research daily share prices for blue-chip stocks from the previous month or several months, according to a person familiar with their statements.
[Bernard Madoff]

Bernard Madoff

Using the data of past share prices, Ms. Bongiorno would then instruct the assistants to generate "tickets" showing purported trades, which resulted in gains that were in line with Mr. Madoff's steady annual returns, this person said. Ms. Bongiorno couldn't be reached for comment.

The development comes as Mr. Madoff signaled last week that he will plead guilty to numerous crimes during a scheduled hearing in federal court on Thursday, people familiar with the case say. Mr. Madoff's attorney, Ira Sorkin, declined to comment.

The charges against Mr. Madoff are expected to include securities fraud, wire fraud, mail fraud and money laundering, according to one person familiar with the case. Mr. Madoff waived a grand-jury indictment and prosecutors will instead file a document called a criminal information to charge him.

The document is expected to be detailed and will lay out the story of how the alleged fraud was committed. It will shine a light on the alleged fraud back to the 1980s, though it actually may have started earlier, according to the person familiar with the case.

If Thursday's hearing goes as planned, prosecutors will be able to devote more time to other people who might have been involved in the alleged fraud. Though Mr. Madoff has told prosecutors he acted alone, his account is doubted by investigators, given the scope and the duration of the alleged fraud, according to several people familiar with the matter.

View Interactive

A look inside the Bernard L. Madoff Investment Securities offices in the Lipstick Building in Manhattan.

The two assistants to Ms. Bongiorno, Semone Anderson and Winnie Jackson, did clerical work and helped generate stock-trade confirmations for client accounts, which purported to show gains that were later applied to client accounts. The confirmations are now believed to have been fictitious, according to a court-appointed trustee who is liquidating the Madoff firm. Ms. Bongiorno, 60 years old, was once Mr. Madoff's personal secretary and later oversaw some of the firm's oldest accounts.

The two assistants were interviewed by the U.S. attorney's office for the Southern District of New York through what are called proffer agreements, in which prosecutors agree not to use their statements against them as long as they tell the truth, according to people familiar with the matter.

Prosecutors also have begun interviewing employees from a group that was separate from Ms. Bongiorno and oversaw accounts for many of Mr. Madoff's institutional accounts. That group was headed by Frank DiPascali Jr., 52, who hasn't yet been asked to speak with prosecutors, according to a person familiar with the matter. Mr. DiPascali's lawyer declined to comment on his client's behalf.

Mr. DiPascali referred to himself as the "director of options trading" at the firm and Mr. Madoff told investors he executed trades, despite the fact that a court-appointed trustee found that no trading occurred for at least the past 13 years. Prosecutors have asked at least three employees who worked under Mr. DiPascali about his role in the firm, according to a person familiar with the matter. The employees, Eric Lipkin, JoAnn Crupi and Robert Cardile, who is Mr. DiPascali's brother-in-law, also had proffer agreements with prosecutors.

Prosecutors' approach so far has been typical of other large fraud investigations: begin with lower-level employees to find out what they knew about the work of their supervisor or other managers, then continue to climb up the ladder. Much of the alleged fraud is believed to have occurred on the 17th floor of the Manhattan high-rise where Mr. Madoff kept his offices. Many of the employees on that floor had little or no financial expertise and started working there at a very young age, according to several people familiar with the firm.

Prosecutors' strategy to start with lower-level employees is one explanation why higher-level employees and other Madoff relatives have yet to be interviewed by prosecutors. Authorities haven't interviewed Mr. Madoff's sons, Andrew or Mark Madoff since Dec. 11 after the two brought them information on Dec. 10 their father confessed to the scheme, touching off the current investigation. The sons helped run the market-making side of the Madoff firm, which was separate from its fraudulent investment operation.

The lawyer for Mark and Andrew Madoff said in a statement that the two "had no knowledge whatsoever of the fraud before their father informed them ... and they immediately reported the fraud to the U.S. Department of Justice and the SEC."

It isn't known whether prosecutors have spoken to Mr. Madoff's brother, Peter, who was the firm's chief compliance officer or to Bernard Madoff's wife, Ruth, who is being looked at by prosecutors because she once had a role in overseeing the Madoff firm's bank accounts, according to a person familiar with the matter. A lawyer for Peter Madoff didn't return calls for comment. The lawyer has said in recent months that his client didn't know about the fraud. Mr. Sorkin, who represents Ruth Madoff, had no comment.

To be sure, such fact-gathering doesn't mean that prosecutors will determine there was any criminal liability. No employees of the Madoff firm have been accused of wrongdoing, save for Mr. Madoff.

New E-Scams & Warnings from the FBI

2009-03-06T11:21:00.000-08:00

FAKE MILITARY TWIST ON VEHICLE SALE SCAMS

03/05/09—The FBI continues to receive reports of individuals victimized while attempting to purchase vehicles via the Internet. Victims find attractively priced vehicles advertised at different Internet classified ad sites. Most of the scams include some type of third-party vehicle protection program to ensure a safe transaction. After receiving convincing e-mails from the phony vehicle protection program, the victims are directed to send either the full payment, or a percentage of the payment, to the third-party agent via a wire payment service. No vehicles are delivered to the victims.

In a new twist, scammers are posing as members of the United States military. The fictitious military personnel in the scam have either been sent to a foreign country to improve military relations, or they need to sell a vehicle quickly and cheaply because of their upcoming deployment to either Iraq or Afghanistan.

Consumers are advised to do as much due diligence as possible before engaging in transactions to purchase vehicles advertised online. Consumers are also cautioned to be aware of the rules of or warnings posted by the Internet sites they visit. If someone is asking you as a consumer to break or avoid the rules of the website, it is possible that person is trying to scam you.

If you have fallen victim to this type of scam, please notify the IC3 by filing a complaint at www.ic3.gov.

WORK-AT-HOME SCAMS

02/04/09—Consumers need to be vigilant when seeking employment online. The IC3 continues to receive numerous complaints from individuals who have fallen victim to work-at-home scams.

Victims are often hired to “process payments,” “transfer funds,” or “reship products.” These job scams involve the victims receiving and cashing fraudulent checks, transferring illegally obtained funds for the criminals, or receiving stolen merchandise and shipping it to the criminals.

Other victims sign up to be a “mystery shopper,” receiving fraudulent checks with instructions to cash the checks and wire the funds to “test” a company’s services. Victims are told they will be compensated with a portion of the merchandise or funds.

Work-at-home schemes attract otherwise innocent individuals, causing them to become part of criminal schemes without realizing they are engaging in illegal behavior.

Job scams often provide criminals the opportunity to commit identity theft when victims provide their personal information, sometimes even bank account information, to their potential “employer.” The criminal/employer can then use the victim’s information to open credit cards, post on-line auctions, register websites, etc., in the victim’s name to commit additional crimes.

If you have been a victim of Internet crime, please file a complaint at www.ic3.gov.

FLURRY OF SPAM TARGETING THE FEDERAL BUREAU OF INVESTIGATION

12/11/08—Consumers continue to be inundated by spam purportedly from the FBI. As with previous spam attacks, the latest versions use the names of several high ranking executives within the FBI and even the IC3 to attempt to defraud consumers.

Many of the spam e-mails currently in circulation claim to be an “official order” from the FBI’s Anti-Terrorist and Monetary Crimes Division, from an alleged FBI unit in Nigeria, confirm an inheritance, or contain a lottery notification, all informing recipients they have been named the beneficiary of millions of dollars. To claim the large sum, recipients are instructed to furnish their personally identifiable information (PII) and are often threatened with some type of penalty, such as prosecution, if they fail to do so. Specific PII information requested includes, but is not limited to, the recipient’s name, banking information, telephone number, and a copy of their passport.

The spam e-mail allegedly from the IC3 states that the recipient has extorted money and will be given a limited amount of time to refund the money or face prosecution.

Do not respond. These e-mails are a hoax.

The FBI does not send unsolicited e-mails of this nature. FBI executives are briefed on numerous investigations but do not personally contact consumers regarding such matters. In addition, the IC3 does not send threatening letters to consumers demanding payments for Internet crimes.

Consumers should not respond to any unsolicited e-mails or click on any embedded links associated with such e-mails, as they may contain viruses or malware.

It is imperative consumers guard their PII. Providing your PII will compromise your identity.

If you have been a victim of Internet crime, please file a complaint at www.ic3.gov.

NEW TECHNIQUE UTILIZING PRIVATE BRANCH EXCHANGE (PBX) SYSTEMS TO CONDUCT VISHING ATTACKS

12/09/08—The FBI has received information concerning a new technique used to conduct vishing (1) attacks. The recent attacks were conducted by hackers exploiting a security vulnerability in Asterisk software. Asterisk is free and widely used software developed to integrate PBX (2) systems with Voice over Internet Protocol (VoIP) digital Internet voice calling services; however, early versions of the Asterisk software are known to have a vulnerability. The vulnerability can be exploited by cyber criminals to use the system as an auto dialer, generating thousands of vishing telephone calls to consumers within one hour.

The vulnerability referred to in this alert is a known vulnerability. Digium, the original creator and primary developer of Asterisk, released a Security Advisory, AST-2008-003, in March of 2008, which contains the information necessary for users to configure a system, patch the software, or upgrade the software to protect against this vulnerability.

If a consumer falls victim to this exploit, their personally identifiable information (PII) will be compromised. To prevent further loss of consumers’ PII and to reduce the spread of this new technique, it is imperative that businesses using Asterisk upgrade their software to a version that has had the vulnerability fixed.

Further, consumers should not release personal information in response to unsolicited telephone calls. Providing your PII will compromise your identity!

If you have been a victim of Internet crime, please file a complaint at www.ic3.gov.

(1) Vishing utilizes caller ID spoofing via VoIP to contact potential victims in order to gain access to their PII by convincing the victim that the criminal is associated with a legitimate business with a need to know the victim’s PII.

(2) PBX Systems are used by companies to allow telephone calls between VoIP enterprise users on local lines while allowing all users to share a limited number of external lines

FRAUDULENT SPAM E-MAIL PURPORTEDLY FROM
FBI DEPUTY DIRECTOR JOHN S. PISTOLE

10/16/08—A spam e-mail claiming to be from FBI Deputy Director John S. Pistole is currently being circulated. This attempt to defraud is the typical e-mail scam using the name and reputation of an FBI official to create an air of authenticity.

As with many scams, the e-mail advises the recipient that they are the beneficiary of a large sum of money which they will be permitted to access once fees are paid and personal banking information is provided. The appearance of the e-mail leads the reader to believe that it is from FBI Deputy Director John S. Pistole.

This e-mail is a hoax. Do not respond.

The IC3 continues to receive and develop intelligence regarding fraud schemes misrepresenting the FBI and/or FBI officials. The scam e-mails give the appearance of legitimacy through the use of pictures of FBI officials, seal, letterhead, and/or banners.

These fraud schemes claim to be from domestic as well as international FBI offices. The typical types of schemes utilizing the names of FBI officials and/or the FBI are lottery endorsements and inheritance notifications, but can cover a range of scams from threats and malicious computer program attachments (malware) to online auction scams.

These scams use the social engineering technique of employing the FBI's name to intimidate and convince the recipient the e-mail is legitimate.

Please be cautious of any unsolicited e-mail referencing the FBI, Director Mueller, Deputy Director Pistole, or any other FBI official claiming that the FBI is endorsing any type of Internet activity.

Always be cautious when responding to requests or special offers delivered through unsolicited e-mail:

* Guard your personal information and your account information carefully.
* You should never give any personal, credit, or banking information in response
to unsolicited e-mails.

If you have received this e-mail, or a similar e-mail, please file a complaint at www.ic3.gov.

HIT MAN E-MAIL SCAM RETURNS

08/28/08—The IC3 continues to receive thousands of reports concerning the hit man e-mail scheme. The e-mail content has evolved since late 2006; however, the messages remain similar in nature, claiming the sender has been hired to kill the recipient.

Two new versions of the scheme began appearing in July 2008. One instructed the recipient to contact a telephone number contained in the e-mail and the other claimed the recipient or a “loved one” was going to be kidnapped unless a ransom was paid. Recipients of the kidnapping threat were told to respond via e-mail within 48 hours. The sender was to provide the location of the wire transfer five minutes before the deadline and was threatened with bodily harm if the ransom was not received within 30 minutes of the time frame given. The recipients’ personally identifiable information (PII) was included in the e-mail to promote the appearance that the sender actually knew the recipient and their location.

Perpetrators of Internet crimes often use fictitious names, addresses, telephone numbers, and threats or warnings regarding the failure to comply to further their schemes.

In some instances, the use of names, titles, addresses, and telephone numbers of government officials and business executives, and/or the victims’ PII are used in an attempt to make the fraud appear more authentic.

Below are links for the two previous public service announcements published by the IC3 concerning the hit man scheme:

*
http://www.ic3.gov/media/2007/070109.aspx
*
http://www.ic3.gov/media/2006/061207.aspx

Consumers always need to be alert to unsolicited e-mails. Do not open unsolicited e-mails or click on any embedded links, as they may contain viruses or malware. Providing your PII will compromise your identity!

Individuals who receive e-mails containing threats of violence and their PII are encouraged to contact law enforcement as well as file a complaint at www.ic3.gov.
STORM WORM VIRUS

07/30/08—Be on the lookout for spam e-mail spreading malicious software (malware) which mentions “F.B.I. vs. facebook.” The e-mail directs the recipient to click on a link to view an article about the FBI and Facebook. Once the user clicks on the link, the “Storm Worm”malware is downloaded to the Internet-connected device, causing it to become infected with the virus and part of the Storm Worm botnet. A botnet is a network of compromised machines under the control of a single user. Botnets are typically set up to facilitate criminal activity such as spam e-mail, identity theft, denial of service attacks, and spreading malware to other machines on the Internet.

The Storm Worm virus has capitalized on various holidays and fictitious world events in the last year by sending millions of e-mails advertising an e-card link within the text of the spam e-mail.

Be wary of any e-mail received from an unknown sender. Do not open any unsolicited e-mail and do not click on any links provided.

If you have received this, or a similar e-mail, please file a complaint at www.ic3.gov.

TIPS ON AVOIDING FRAUDULENT CHARITABLE CONTRIBUTION SCHEMES

07/08/08—Since late May and early June 2008, there have been several natural disasters throughout the country—including tornadoes, wildfires, and floods—that have devastated lives and property. In the wake of these events, which cause emotional distress and great financial loss to numerous victims, individuals across the nation often feel a desire to help, frequently through monetary donations.

Tragic incidents such as 9/11, Hurricanes Katrina and Rita, and the recent earthquake in China have prompted individuals with criminal intent to solicit contributions purportedly for a charitable organization and/or a good cause. Therefore, before making a donation of any kind, consumers should adhere to certain guidelines, to include the following:

*
Do not respond to unsolicited (spam) e-mail.
*
Be skeptical of individuals representing themselves as officials soliciting via e-mail for donations.
*
Do not click on links contained within an unsolicited e-mail.
*
Be cautious of e-mail claiming to contain pictures in attached files, as the files may contain viruses. Only open attachments from known senders.
*
To ensure contributions are received and used for intended purposes, make contributions directly to known organizations rather than relying on others to make the donation on your behalf.
*
Validate the legitimacy of the organization by directly accessing the recognized charity or aid organization's website rather than following an alleged link to the site.
*
Attempt to verify the legitimacy of the non-profit status of the organization by using various Internet-based resources, which also may assist in confirming the actual existence of the organization.
*
Do not provide personal or financial information to anyone who solicits contributions: providing such information may compromise your identity and make you vulnerable to identity theft.

To obtain more information on charitable contribution schemes and other types of online schemes, visit www.lookstoogoodtobetrue.com. If you are a victim of an online scheme, please notify the IC3 by filing a complaint at www.ic3.gov.

PHISHING AND VISHING ATTACKS TARGETING USERS OF EPPICARDS

06/13/08—The IC3 has received reports of phishing attacks targeting users of EPPICards. The EPPICard is similar to a debit card. EPPICards are issued by a state agency for the purpose of receiving child-support payments. The cards are currently used in 15 states.

Individuals have reported receiving e-mail or text messages indicating a problem with their account. They are directed to follow the link provided in the message to update their account or correct the problem. The link actually directs the individuals to a fraudulent web site where their personal information, such as account number and PIN, is compromised.

Individuals have also reported receiving an e-mail message asking them to complete an online survey. At the end of the survey, they are asked for their EPPICard account information to allow funds to be credited to the account in appreciation for completing the survey. Providing this information will allow criminals to compromise the account.

EPPICard providers indicate they are not affiliated with survey web sites and do not solicit personal information via email or text messages.

Please be cautious of unsolicited e-mails. Do not open e-mails from unknown senders because they often contain viruses or other malicious software. Also, avoid clicking links in e-mails received from unknown senders as this is a popular method of directing victims to phishing websites.

If you have received an e-mail similar to this, please notify the IC3 by filing a complaint at www.ic3.gov.

FRAUDULENT REFUND NOTIFICATION PURPORTEDLY FROM THE IC3

06/06/08—Consumers need to be aware of e-mail schemes containing various versions of fraudulent refund notifications purportedly from the IC3 and the government of the United Kingdom. The e-mails claim the refunds are being made to compensate the recipients for their losses as victims of Internet fraud.

The perpetrators of this fraud use the names of people not associated with the IC3 but give them titles in an attempt to make the e-mails appear official. The perpetrators use the IC3’s logo and the former name of the IC3, the Internet Fraud Complaint Center (IFCC), as well as the names of the Bank of England and the Metropolitan Police in the e-mails.

The e-mails promise refunds of thousands of dollars which are to be sent via bank wire transfer from the “bank of England” once the victim signs a “fund release order.” The e-mails contain warnings that failure to sign the order will place the funds on hold and a penalty will be applied.

As with most spam, the content contains elements which are evidence of fraud such as: multiple spelling errors, poor grammar, agency names, signatures of officials and titles to appear authentic, and a warning for failure to comply. In some of the e-mails, the names of the officials do not match the signatures.

Consumers always need to be alert when they receive an unsolicited e-mail. Remember: do not open unsolicited e-mail or click on any links embedded in the e-mail, as they may contain a virus or malware.

If you have received an e-mail similar to this, please file a complaint at www.ic3.gov.
PHISHING RELATED TO ISSUANCE OF ECONOMIC STIMULUS CHECKS

05/08/08—The FBI warns consumers of recently reported spam e-mail purportedly from the Internal Revenue Service (IRS) which is actually an attempt to steal consumer information. The e-mail advises the recipient that direct deposit is the fastest and easiest way to receive their economic stimulus tax rebate. The message contains a hyperlink to a fraudulent form which requests the recipient's personally identifiable information, including bank account information. To convince consumers to reply, the e-mail warns that a failure to complete the form in a timely manner will delay the issuance of the rebate check.

One example of this IRS spam e-mail message is as follows:

"Over 130 million Americans will receive refunds as part of President Bush's program to jumpstart the economy.

Our records indicate that you are qualified to receive the 2008 Economic Stimulus Refund.

The fastest and easiest way to receive your refund is by direct deposit to your checking/savings account.

Please follow the link and fill out the form and submit before May 10th, 2008 to ensure that your refund will be processed as soon as possible.

Submitting your form on May 10th, 2008 or later means that your refund will be delayed due to the volume of requests we anticipate for the Economic Stimulus Refund.

To access Economic Stimulus refund, please click here."

Consumers are advised that the IRS does not initiate taxpayer communications via e-mail. In addition, the IRS does not request detailed personal information via e-mail or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.

Please be cautious of unsolicited e-mails. It is recommended not to open e-mails from unknown senders because they often contain viruses or other malicious software. It is also recommended to avoid clicking links in e-mails received from unknown senders as this is a popular method of directing victims to phishing websites.

If you have received an e-mail similar to this, please notify the IC3 by filing a complaint at www.ic3.gov.
FRAUDULENT GRAND JURY SUMMONS CONTAINING MALWARE

04/17/08—The IC3 warns consumers of recently reported spam e-mail containing a fraudulent subpoena notifying recipients they are commanded to appear and testify before a Grand Jury. The e-mail attempts to appear authentic by containing a court case number, federal code, name and address of a California federal court, court room number, issuing officers’ names, and a court seal. Recipients are directed to click the link provided in the e-mail in order to download and print associated information for their records. If the recipient clicks the link, malicious code is downloaded onto their computer.

The e-mail also contains language threatening recipients with contempt of court charges if they fail to appear. Recipients are also told the subpoena will remain in effect until the court grants a release. As with most spam, the content contains multiple spelling errors.

If you receive this type of notification and are unsure of its authenticity, you should contact the issuing court for validation.

Be aware; if you receive an unsolicited e-mail, especially from an unknown sender, it is recommended you do not open it. If you do open the e-mail, do not click any embedded links, as they may contain a virus or malware.

If you have received an e-mail similar to this, please file a complaint at www.ic3.gov.
STORM WORM VIRUS

02/11/08—With the Valentine's Day holiday approaching, be on the lookout for spam e-mails spreading the Storm Worm malicious software (malware). The e-mail directs the recipient to click on a link to retrieve the electronic greeting card (e-card). Once the user clicks on the link, malware is downloaded to the Internet-connected device and causes it to become infected and part of the Storm Worm botnet. A botnet is a network of compromised machines under the control of a single user. Botnets are typically set up to facilitate criminal activity such as spam e-mail, identity theft, denial of service attacks, and spreading malware to other machines on the Internet.

The Storm Worm virus has capitalized on various holidays in the last year by sending millions of e-mails advertising an e-card link within the text of the spam e-mail. Valentine's Day has been identified as the next target.

Be wary of any e-mail received from an unknown sender. Do not open any unsolicited e-mail and do not click on any links provided.

If you have received this, or a similar e-mail, please file a complaint at www.ic3.gov.
FBI IDENTIFIES RECURRING FRAUDULENT E-MAIL SCAM

02/01/08—The FBI has recently developed information indicating cyber criminals are attempting to once again send fraudulent e-mails to unsuspecting recipients stating that someone has filed a complaint against them or their company with the Department of Justice or another organization such as the Internal Revenue Service, Social Security Administration, or the Better Business Bureau.

Information obtained during the FBI investigation has been provided to the Department of Homeland Security (DHS). DHS has taken steps to alert their public and private sector partners with the release of a Critical Infrastructure Information Notice (CIIN).

The e-mails are intended to appear as legitimate messages from the above departments, and they address the recipients by name, and other personal information may be contained within the e-mail. Consistent with previous efforts, the scam will likely be an effort to secure Personally Identifiable Information. The nature of these types of scams is to create a sense of urgency for the recipient to provide a response through clicking on a hyperlink, opening an attachment, or initiating a telephone call.

It is believed this e-mail refers to a complaint that is in the form of an attachment, which actually contains virus software designed to steal passwords from the recipient. The virus is wrapped in a screensaver file wherein most anti-virus programs are unable to detect its malicious intent. Once downloaded, the virus is designed to monitor username and password logins, and record the activity, as well as other password-type information, entered on the compromised machine.

Be wary of any e-mail received from an unknown sender. Do not open any unsolicited e-mail and do not click on any links provided. If you have received a scam e-mail please notify the IC3 by filing a complaint at www.ic3.gov.
VISHING ATTACKS INCREASE

01/17/08—Are you one of many who have received an e-mail, text message, or telephone call, supposedly from your credit card/debit card company directing you to contact a telephone number to re-activate your card due to a security issue? The IC3 has received multiple reports of different variations of this scheme known as "vishing". These attacks against US financial institutions and consumers continue to rise at an alarming rate.

Vishing operates like phishing by persuading consumers to divulge their Personally Identifiable Information (PII), claiming their account was suspended, deactivated, or terminated. Recipients are directed to contact their bank via a telephone number provided in the e-mail or by an automated recording. Upon calling the telephone number, the recipient is greeted with "Welcome to the bank of ……" and then requested to enter their card number in order to resolve a pending security issue.

For authenticity, some fraudulent e-mails claim the bank would never contact customers to obtain their PII by any means, including e-mail, mail, or instant messenger. These e-mails further warn recipients not to provide sensitive information when requested in an e-mail and not to click on embedded links, claiming they could contain "malicious software aimed at capturing login credentials."

Please beware—spam e-mails may actually contain malicious code (malware) which can harm your computer. Do not open any unsolicited e-mail and do not click on any links provided.

A new version recently reported involves the sending of text messages to cell phones claiming the recipient's on-line bank account has expired. The message instructs the recipient to renew their on-line bank account by using the link provided.

Due to rapidly evolving criminal methodologies, it is impossible to include every scenario. Therefore, be cognizant and protect your PII. Beware of e-mails, telephone calls, or text messages requesting your PII.

If you have a question concerning your account or credit/debit card, you should contact your bank using a telephone number obtained independently, such as from your statement, a telephone book, or other independent means.

If you have received this, or a similar hoax, please file a complaint at www.ic3.gov.

AN INCREASE IN INTERNET SCHEMES CLAIMING TO BE FROM THE FBI

01/04/08—We have increasingly received reports of fraudulent schemes misrepresenting FBI agents, officials, and/or FBI Director Robert S. Mueller, III. The fraudulent e-mails give the appearance of legitimacy due to the usage of pictures of the FBI Director, seal, letterhead, and/or banners. The e-mails may also claim to come from our domestic or overseas offices.

The types of schemes utilizing the names of FBI agents, officials, or the Director’s name are typically lottery endorsements and inheritance notifications. However, other fraudulent schemes include threat and extortion e-mails, website monitoring containing malicious computer program attachments (malware), and online auction scams.

The social engineering technique of utilizing the FBI’s name is to intimidate and convince the recipient the e-mail is legitimate.

The FBI does not send out emails soliciting information from citizens.

Please be cautious of any unsolicited e-mail referencing the FBI, FBI Director Mueller, or any other FBI official endorsing any type of Internet activity.

If you have experienced this situation please notify the IC3 by filing a complaint at www.ic3.gov.
NEW TWIST CONCERNING THREAT AND EXTORTION E-MAILS

01/09/07—There is a new twist to the IC3 alert posted on December 7, 2006 regarding e-mails claiming that the sender has been paid to kill the recipient and will cancel the contract on the recipient's life if that person pays a large sum of money. Now e-mails are surfacing that claim to be from the FBI in London. These e-mails note the following information:

* An individual was recently arrested for the murders of several United States and United Kingdom citizens in relation to this matter.
* The recipient's information was found on the subject identifying the recipient as the next victim.
* The recipient is requested to contact the FBI in London to assist with the investigation.

It is not uncommon for an Internet fraud scheme to have the same overall intent but be transmitted containing variations in the e-mail content, e.g., different names, e-mail addresses, and/or agencies reportedly involved. See our related top story on the hitman scam.

Please note, providing any personal information in response to an unsolicited e-mail can compromise your identity and open you to identity theft.

If you have experienced this situation please notify the IC3 by filing a complaint at www.ic3.gov.

Due to the threat of violence inherent in these extortion e-mails, if you receive an e-mail that contains personally identifiable information that might differentiate your e-mail from the general e-mail spam campaign, we encourage you to contact the police.
E-MAILS CONTAINING THREATS AND EXTORTION

12/07/06—We have recently received information concerning spam e-mails threatening to assassinate the recipient unless the individual pays several thousand dollars to the sender of the e-mail.

The subject claims to have been following the victim for some time and was supposedly hired to kill the victim by a friend of the victim. The subject threatens to carry out the assassination if the victim goes to the police and requests the victim to respond quickly and provide their telephone number.

Warning! Providing any personal information can compromise your identify and open you to identity theft.

If you have experienced this situation, please notify your local, state, or federal law enforcement agency immediately. Also, please notify the IC3 by filing a complaint at www.ic3.gov.

Store owner turns tables on robbers...shoots both of them

2009-01-30T11:50:00.000-08:00

Violence Roils Black Funeral Parlors

2008-06-21T13:40:00.000-07:00

Clarence Glover has a surveillance camera in the chapel of his funeral home. Joseph Garr sometimes carries a revolver in his hearse. Carl Swann Jr. is contemplating leaving the business.

The three directors of black funeral parlors here have been assaulted at services and each has had gunshots fired during burials. Concealed-weapons, pre-funeral intelligence briefings, cameras, panic buttons and armed security guards are becoming as much a part of services as the eulogy.

"I've been in this business 42 years and I'm jittery now," Mr. Glover says.

Across the country, black morticians are changing the way they operate. The reason: a spike in African-American murders -- and the violence that sometimes follows victims to the grave. In an echo of more volatile parts of the world, such as Iraq and Afghanistan, African-American morticians report seeing an increase in violent behavior, and occasional killings, at funerals.

The violation of the once-sacrosanct funeral is one byproduct of a little-noticed upswing in the murder rate of African-Americans. The number of blacks killed in America, mostly by other blacks, has been edging up at a time when the rate for other groups has been flat or falling.

As a result, the black murder-victim toll exceeds that of the far larger white population. According to the most recent statistics from the Federal Bureau of Investigation, the number of whites murdered dropped slightly, to 6,956 from 7,005 between 2004 and 2006. The number of blacks killed rose 11%, to 7,421 from 6,680.

African-Americans, who make up 13% of the population, have long had a higher homicide rate than other groups. And the total number of black murders is still significantly lower than in the early 1990s, when the U.S. was hit by a wave of drug-related killings. At that time, though, "funeral homes used to be the most respected places you could walk into beside the church," says Jeff Gardner, a co-owner of A.D. Porter & Sons in Louisville, Ky., and a third-generation undertaker. "Nobody respects life and the young folks nowadays don't mind dying."

What worries law enforcement, criminologists and sociologists is that there's no unifying theme to explain today's increase. Some killings are drug related. Researchers trace others to a glut of ex-felons re-entering society. Others correlate the rise in murders to the lack of a proper education.

Black funeral homes, long a fixture of African-American communities, offer a stark perspective from which to view the trend. There are no comprehensive statistics on assaults or other crimes at funerals. And the violence has not touched all black communities. Still, the topic has become a hot one in the industry.

Rising Incidence of Violence

Last year, the National Funeral Directors & Morticians Association -- a black trade group -- held a panel discussion at its Philadelphia convention about the rising incidence of violence on funeral premises. Among some strategies recommended: increasing security and not publicizing funerals.

Since 2006, police in Boston, Goldsboro, N.C., Louisville, Los Angeles and St. Louis have investigated black murders that occurred at or immediately after funeral services. Of five cases reviewed for this article, four were at the funerals of other murder victims. Two were gang related. One was a revenge killing. Two remain unexplained.

Sitting in the office of his funeral parlor on Reading Road in Cincinnati, funeral director Mr. Glover, 58 years old, can see images from three cameras at once. They allow him to view all the public areas inside the House of Glover Funeral Service as well as the back door. He's had the system up and running for three months.

On at least two occasions, he says, gunfire at grave sites forced him to dive into the dirt. "Bullets don't have names," he says.

If a funeral has the possibility of "drama," as he puts it, Mr. Glover hires security at $25 to $50 an hour per guard. He also assembles his staff two hours prior to a wake for a briefing. "We have a meeting so you know who is who, what to look for and watch out for each other," he says.

Cincinnati is a microcosm of the national picture. Here, black morticians meet regularly. In past months the primary discussion has been about safety. Recently, funeral directors went on local radio talk shows in three one-hour sessions. The subject: escalating violence at funerals.

According to the National Funeral Directors & Morticians Association, the average cost of an African-American funeral is about $4,500. In many cases, the specter of violence is driving costs up. In Cincinnati, security firms make regular appearances at services, adding as much as $500 to the bill. Surveillance systems can cost $2,000 or more just to install.

"We've had to alternate funeral procession routes because we have been tipped off," says Duane Weems, president of Elite Protective Services, a local security firm. "Attendees to the church service will tell us that this gang is waiting down there."

Since funerals and wakes draw family and friends of the deceased, they also provide a ready stage for anyone with violent intentions toward the mourners.

Family and friends of Frank Sherley Jr., who died at the age of 70 of natural causes, were arriving at A.D. Porter & Sons Funeral Home in Louisville for his wake May 21, 2006. It was "a perfect day," recalls John Curd, an employee there that Sunday evening. "There was no expectation of violence."

At services for Mr. Sherley, two gunmen appeared in the parking lot and began firing. Mr. Curd dialed 911. He recalls thinking: "This isn't supposed to be happening at a funeral home." One man was killed and four other people were wounded. Police say they don't have a motive and the crime is unsolved.
TROUBLED HOMES

• The Issue: As the murder rate among African-Americans edges up, morticians are noticing more incidents of violence at funeral services.
• The Challenge: Undertakers can beef up security, but their costs rise and profits dwindle.
• The Outlook: Black funeral homes may lose their safe-haven status in some communities.

In his first four years on the job, Mr. Curd rarely tended to homicide victims. In recent years, he sees one to two each month.

Harrowing Experience

Mr. Swann, of Cincinnati, says his family has been burying the dead since the early 1900s. "I caught the school bus in front of the funeral home and I got off the bus in front of the funeral home," he says. Now, at age 37, he's thinking of getting out of the business.

One particularly harrowing experience was the funeral of Raeshaun Hand Jr. The ex-convict had continued to deal drugs after being released from prison, according to police, and was wanted at the time of his murder. Mr. Hand, 27, was found shot inside his car in February 2005.

Mr. Hand's father tried to keep the service private, but word got out. The father stood guard at the church door, trying to limit access. Some mourners made it in, drinking and smoking in the church bathroom, Mr. Swann says. Later as he prepared to close the casket, a large group rushed inside, pinning the undertaker.

"One dude punched me in front of the casket. The dead man's son was there and he got punched and his father was punched. My professionalism went out the window," Mr. Swann says. "I started fighting back, throwing punches. This wasn't in the job description and it doesn't come with the job."

Evacuation Plan

Debora Kellom, director of Wade Funeral Home in St. Louis and a spokeswoman for the National Funeral Directors Association, similarly recalls how a fight broke out during the wake of a murder victim in January. Word spread that there were guns present. Panic erupted. Ms. Kellom ordered the casket closed, moved everyone outside and called 911.

Thirty police arrived on the scene, complete with a paddy wagon. "So many emotions came over me that night," she said. "I was angry because I had to do that. Telling the mother who was crying we have to get you out and protect you."

At least she was prepared. Ms. Kellom has an evacuation plan for the funeral home. At its core is an electronic switch that allows her to put the facility in lockdown mode.

Mr. Gardner, the co-owner of A.D. Porter & Sons, has also installed electronic surveillance cameras. On occasion, he hires extra security for a funeral that's likely to attract violence. Mr. Gardner says he sometimes must absorb the extra cost, which can amount to hundreds of dollars per funeral. "There's no price too high for safety but it costs and that just eats into my bottom line."

Gayle Graham locks the door to her establishment, W.T. Shumake & Daughters Funeral Home, Louisville, unless a service is under way. "The open door policy is gone even though we're a business. You have to ring the doorbell," says Ms. Graham. Other policies include changing venues for some funerals and not publicizing wakes. Ms. Graham also reports that her insurance costs are rising because of liability concerns.

In some cases, police are shadowing mourners. On the West Coast, funeral directors are now working closely with the Los Angeles Police Department, from planning procession routes that avoid gang territory to coordinating burials so rivals aren't interred in the same cemeteries at the same time.

Detective Sal LaBarbera, a homicide supervisor with the LAPD, says the department routinely attends high-risk funerals to offer security and gather intelligence.

Earlier this year, the family of a gang-related murder victim had difficulty finding a funeral home that would take the body. "This poor family, it took five or six days before they could find a place that would even accept this kid," recalls Mr. LaBarbera.

Once arrangements were set, LAPD suggested that the wrong location and time be disseminated "so the family could have a private service," says Mr. LaBarbera. "On the face of it, it sounds ridiculous but it's real life here."

Anthony Felder, of Los Angeles's Spalding Mortuary, says he routinely faxes basic information to the police if he's handling a homicide case. He also faxes images of tattoos on the body to help the police identify gang members -- and assess any specific risks associated with the deceased. The police in return send plainclothes officers for security.

In St. Louis, Ms. Kellom, 43, says she has gone so far as to ask that the local police department set up a substation inside her facility. She argues that such an arrangement would give her establishment -- and the neighborhood -- a much-needed, visible police presence. She has promised a body-free zone for officers, who she expects will soon be dropping by on a regular basis to monitor the area.

Mr. Garr, 77, has largely taken matters into his own hands. The Cincinnati funeral director obtained his license to carry a concealed weapon in late 2005. His next step is to increase liability coverage in case he has to use one of his two .38-caliber pistols.

The 'S'

At a recent service, mourners driving in the funeral procession began zigzagging in what is known as the "S," says Mr. Garr, weaving so dramatically that they covered three lanes instead of one. He stopped the hearse and asked the participants to stop because they were creating a hazard. When they continued, he began pulling the funeral flags off their cars.

One man grabbed him, Mr. Garr recalls, and said he couldn't prevent them from making such a display, which they called a homage to the dead man.

"I could feel myself reaching for my gun, but then I'm showing the same attitude as the knuckleheads," he says. The young man stepped away, defusing the situation.

As funeral security evolves, Ms. Kellom says the business of burial insurance -- policies sold by directors to help customers pay in advance for funeral costs -- is also morphing. Rather than purchase policies for just themselves, mothers and grandmothers are now taking out policies for younger family members, too.

Says Ms. Kellom: "They come in and say, 'I know I'm going to be responsible for burying him when something happens.'"

The Polygraph Paradox

2008-06-19T20:49:00.000-07:00

Lie detectors aren't perfect. But, convicted sex offenders concede, they may be good enough.

The lie detector won't die.

Polygraphy, the attempt to ferret out deception by monitoring changes in subjects' breathing, sweating or pulse, has long been derided as "voodoo science." Confessions made under polygraph aren't admitted as evidence in a vast majority of U.S. courts without the consent of the accused. The National Academy of Sciences says the technology isn't accurate enough to be used for employee security screening.

Yet polygraph use is at the highest level in two decades. Government agencies from local police departments to the CIA are increasingly using the technology for job interviews. In U.S. courts lately, judges have expanded the instances in which polygraph testing is mandated or admitted as evidence.
[Click to see a polygraph test]1

In law enforcement, this lie-detector paradox is clearly on display. Polygraphy is a centerpiece in an expanding range of parole and probation programs that are designed to dissuade sex offenders and other felons from committing more crimes.

The recent experience of convicted gay pedophile Paul Duncan shows the polygraph's contradictions and, its proponents argue, its promise. Last November, as part of a program in this southern Oregon town to monitor paroled sex offenders, Mr. Duncan sat in a small windowless room in a corrections center with polygraph sensors on his palm, chest, stomach and arm. Under the program, a parolee who fails the test, or admits to parole violations under the threat of a test, can be sent back to prison.

The machine's operator asked: "Have you had sexual contact with a minor during the last six months?"

Mr. Duncan said he hadn't. The polygrapher judged him to be lying. Mr. Duncan was sent to jail for 15 days.

In an interview after his release, the 33-year-old Mr. Duncan said reality had been more complicated. Mr. Duncan said he hadn't, in fact, had contact with a minor. But he admitted he had violated his parole in another way -- viewing online pornographic photos of young males, an activity he says had sparked his past pedophilic episodes. Mr. Duncan says he believes that while the polygraph got the specifics wrong, it revealed a broader truth: His conscience was guilty.

"I didn't disclose my deviant fantasies -- and I deserved to fail," Mr. Duncan said of the test. "Don't believe anyone who tells you polygraph doesn't work."
[Paul Duncan]

Mr. Duncan's unusual endorsement is consistent with those provided by other paroled felons. In interviews with The Wall Street Journal, a dozen convicted sex offenders in Klamath Falls and Denver, Colo., said lie-detector sessions exposed their parole violations. More importantly, they say, the threat of upcoming tests serves as a deterrent to future crimes. Polygraph proponents argue that this is a benefit the ongoing polygraphy debate misses: The question shouldn't be whether the technology is always accurate, they say, but whether it is useful.

Polygraphs have long been used as a tool to keep sex offenders from relapsing, typically as part of maintenance programs that combine polygraphy with group therapy and parole-officer supervision. Today, a majority of jurisdictions use such programs for convicted sex offenders. Now, post-conviction polygraphy appears poised to spread: Probation officers have recently started deploying lie detectors in programs tailored to domestic-abuse and drunk-driving offenders, as well.

Last July, Klamath Falls expanded its sex-offender program to cover domestic-violence offenders. Two East Texas counties, Van Zandt and Wood, recently began monitoring drug and alcohol offenders with lie detectors, and polygraphy has also been used in monitoring drug and alcohol offenders in Dallas and Houston.

Eric Holden, a psychologist and Dallas polygraph examiner, says that as courts become familiar with how lie detectors are used with sex offenders, the tests will be increasingly applied to other offenders. Polygraph testing "will become a standard for supervising probationers of all kinds," says Mr. Holden, who was one of the first to use polygraphy with sex offenders in the early 1980s.

That tracks the lie detector's expanding use overall. The number of federal polygraph programs has grown 53% in the past decade, according to the Defense Academy of Credibility Assessment, which trains polygraph examiners for the government. There are roughly 5,000 polygraph examiners in the U.S., conducting some 1.6 million tests a year -- both up about 50% from a decade ago, estimates the industry's largest trade group, the American Polygraph Association. This year, APA membership reached its highest level since 1988, when Congress outlawed pre-employment lie-detector testing by most nongovernmental employers.

Unlicensed Operators

Critics remain vocal. The idea behind polygraphy is that physiological changes often accompany lying. But subjects can fool the machine, detractors say. While subjects are supposed to sit still to ensure an accurate reading, some may try to distort results by squeezing muscles in the buttocks, for example, or lightly biting the tongue. Precise polygraphy also depends on the ability of the machine's operator to formulate questions and analyze results; nearly half of U.S. states, including California, don't require examiners to be licensed.

Even with trained polygraphers, the technology fails to detect those telling lies, or wrongly implicates those telling the truth, about 10% of the time, according to field studies reviewed by the National Academy of Sciences. Such reliability levels are too low for many uses. In making employment decisions about thousands of people, for example, lie detectors could wrongly implicate hundreds of them, the academy wrote in a 2003 study. Polygraphy performs "well above chance, though well below perfection," the study concluded.

High-profile cases have spotlighted these imperfections. Polygraph testing failed to raise suspicions about Aldrich Ames, the former CIA agent who spied for the Soviets. The Federal Bureau of Investigations' interpretation of Los Alamos scientist Wen Ho Lee's exam results wrongly implicated him of being an agent for China.

Proponents say accuracy rates have improved. Increasingly, hand-scoring by examiners has been replaced by computerized algorithms that proponents say filter out human errors and biases. Examiners have also tried to counter polygraph-foiling techniques, employing, for example, what they call "butt pads" to detect muscle squeezing.

When it comes to dissuading released offenders from relapsing, polygraphy is superior to other methods, adherents say. It beats self-reporting -- simply asking parolees whether they've violated their parole terms -- a method previously employed by many jurisdictions that have switched over to post-conviction polygraphy.

Eighty Offenders

In Klamath Falls, a town of 20,000 people and the seat of Oregon's mountainous Klamath County, some 80 convicted sex offenders are required to attend weekly therapy sessions and probation-officer meetings. They're also required to submit to lie-detector testing. Initially, they undergo an extensive screening of their sexual history, meant to provide a baseline of behaviors and flag activities that tend to provoke deviant behavior. Offenders also undergo so-called maintenance polygraphs at least every six months.

Klamath Falls's corrections office requires the offenders to pay $200 for the sexual-history exam and $150 apiece for maintenance tests. Some money is available for those who can't afford to pay.

Michael Collier, a convicted offender in Klamath Falls, says the polygraph pushed him to admit what he wouldn't otherwise have disclosed. Imprisoned in 1999 for sexually assaulting a young female cousin, Mr. Collier was released in 2006. Afterward, he submitted to the mandatory sexual-history exam.

Mr. Collier says he "failed miserably" twice. Because flunked polygraphs are regarded as noncompliance with treatment, a parole violation, Mr. Collier was ordered to serve 68 days in the county jail. After his release, he admitted he had withheld information during the tests: He had been drinking alcohol and had been in the home of a woman with young children, both parole violations. (Oregon grants offenders immunity from prosecution for these kinds of confessions.)

Mr. Collier's experience isn't unusual, according to a 2000 survey conducted by the Colorado Division of Criminal Justice for the National Institute of Justice. In a study of 180 convicted sex offenders in three states, its authors determined that the subjects confessed to more crimes, and a wider variety of offenses, under polygraph than they otherwise would have. Ten percent admitted to having male victims before they took a post-conviction polygraph exam. After the polygraph exam, 36% admitted to having male victims.

Hands-Off Behaviors

The study also suggests that polygraphs can help reveal activities that could lead to relapse. In pre-polygraph questioning, 3% of offenders disclosed so-called hands-off behaviors -- including exhibitionism, voyeurism, placing obscene phone calls and viewing pornography on the Internet -- that for some offenders often precede assaults. Under the polygraph, more than 10 times as many offenders -- 35% -- disclosed hands-off offenses.

The report's lead author, Kim English, says that without the polygraph, therapists and probation officers might falsely conclude a group of offenders presented a relatively low risk to the community. "People will divulge victims and behaviors they would otherwise withhold," Ms. English says. "With polygraph, they know they're going to be found out."

Lawyers for sex offenders have argued that subjecting a suspect to such polygraph tests violates the U.S. Constitution's protection against self-incrimination. Dozens of federal and state courts, however, have ruled that post-conviction tests don't violate these Fifth Amendment rights. Polygraph testing "produces an incentive to tell the truth, and thereby advances the sentencing goals," the 2nd U.S. Circuit Court of Appeals in Manhattan said in a 2006 ruling.

The First Polygraph

Polygraphy dates back almost a century. William Moulton Marston -- a Harvard psychologist and lawyer better known for creating the "Wonder Woman" cartoon character -- published a paper in 1917 that argued that deception could be detected by measuring systolic blood pressure. In the 1920s, John Larson, a police officer in Berkeley, Calif., adapted Mr. Marston's method to the interrogation of criminal suspects, building a device that measured blood pressure and breathing patterns. His colleague Leonarde Keeler updated the design, wringing confessions from criminals with a mechanical box that also measured palm sweat and pulse rate. Mr. Keeler called it a polygraph, a device that records multiple measurements.

The basic idea has changed little. Polygraphs now typically consist of a set of probes that feed into a laptop computer and use scoring based on computerized algorithms. Four manufacturers in the U.S. and Canada offer polygraphs that cost roughly $7,000 to $11,000.

Entrepreneurs are racing to develop alternatives. Functional magnetic resonance imaging, also called brain fingerprinting, uses MRI technology to detect areas of the brain that are said to be activated when a subject lies. Brain fingerprinting is only now being tested, and is currently too expensive for widespread use: Machines cost $3 million or more, with single tests costing about $10,000 each. For now, old-school polygraphs remain the standard.
[Robert Lundell]

In Klamath Falls, testing is conducted by Robert Lundell, a former Oregon state trooper who left the force in 1980 to attend polygraph school. He started conducting post-conviction testing in 1982 in Oregon, one of the first states to deploy lie detectors this way.

Mr. Lundell, who owns a polygraphy business in nearby Medford, Ore., typically spends three days a week with convicted sex and violence offenders in Klamath Falls. He works in a small, unadorned room, designed to minimize distractions. During a typical session, he conducts a pre-polygraph interview that runs about an hour. Then comes a brief polygraph segment, lasting about 10 minutes. It incorporates a handful of control questions, to which the responses are obvious or known, plus five or fewer "yes" or "no" questions. Next is a post-polygraph interview, where subjects may come clean on questions they failed.

Calling his work "40% science and 60% art," Mr. Lundell says the key to polygraphy is asking the right questions. Specific and unambiguous inquiries about past behavior, he says, are best. "Have you been alone in a home with any minors since your last test," he says, is preferable to "Have you done anything wrong in the last six months."

Mr. Lundell says he shares the information he gleans with David Robinson, the psychotherapist who treats the Klamath Falls offenders. "Polygraph verifies the information I already have or thought," Dr. Robinson says.

'An Eye Opener'

Subjects are typically skeptical of the tests at first, say Mr. Lundell and offenders. But Mr. Lundell says polygraphs eventually become a strong deterrent. Simply knowing they will be tested, Mr. Lundell says, makes offenders less likely to commit new crimes.
[Jose Villenueva]

Jose Villaneuva believed he could beat the machine. First arrested at age 15 for stealing a car, Mr. Villanueva had spent five years in a juvenile facility in California before graduating to what he terms "a life of crime" and illegal drug use. The married father of two from Klamath Falls took his first polygraph in 2005, after he pleaded guilty to having sex with a 15-year-old girl.

When asked in his initial polygraph whether he was engaging in behavior that violated his probation, he says he didn't confess his continued theft and drug use. He failed. In a second test three months later, Mr. Villanueva confessed his past criminal activities and said he'd discontinued them. He passed. "It was an eye opener," says Mr. Villanueva, now 35 years old. "If I wouldn't have had to take polygraphs, I'd be in prison now. I had to stop doing all my criminal activity to pass them."

It is possible that polygraphy is effective in such cases in part because offenders believe the technology works. "The value of the polygraph in eliciting true admissions and confessions is largely a function of an examinee's belief that attempts to deceive will be detected and will have high costs," the National Academy of Sciences said in its 2003 report. "Such beliefs are not necessarily dependent on the validity of the test."

Sean Morrison, a 25-year-old convicted of raping a college classmate in 2000, was one of eight sex offenders interviewed during a therapy session in Denver. The others declined to be identified. Mr. Morrison says that while he has completed treatment and is no longer on probation, he volunteers to attend weekly therapy sessions and take two polygraph exams a year. "They keep me honest," he says.

Vince Garner, first convicted in 1990 of an offense against his three-year-old daughter, also credits the polygraph with keeping him out of trouble.

For his 43rd birthday last November, Mr. Garner received a gift box from a family member. In it, according to Mr. Garner and Klamath Falls law-enforcement officials familiar with his case, were a handgun and a bag of crystal meth.

"I like handguns, so I picked it up and touched it," he says. Handling a gun was a parole violation. As he held the gun, Mr. Garner says, he realized he was scheduled for his twice-annual polygraph two days later. "I said, 'You've got to get this out of here,' " he recalls.

At the outset of his next exam, Mr. Garner told the Klamath Falls polygrapher, Mr. Lundell, what he'd done. "If you have even the smallest little detail you didn't tell, you're going to fail," says Mr. Garner, whose confession enabled him to pass that exam.

As it stands now, Mr. Garner says he will have to continue taking the tests until his probation ends in 2020. He adds: "I wouldn't keep taking polygraphs if I didn't have to."

DNA Evidence Gains Acceptance As a Key Tool in Robbery Cases

2008-06-19T09:13:00.000-07:00

When David and Dina Weller robbed yet another home in Denver in 2006, investigators traced the couple by analyzing saliva left on a cigarette butt at the crime scene. That DNA evidence connected the pair to a string of burglaries, and each got a 36-year sentence.

The payoff was immediate and huge: The annual burglary rate for the neighborhood they operated in fell 40%.
[Chart]

For years, DNA forensic techniques have largely been used for serious crimes such as rape or murder. Now they are also being applied to lesser felonies -- such as car theft and burglary -- often with dramatic results.

That success also poses a dilemma for cash-strapped police agencies and local governments: Is an expansive new high-tech infrastructure worth the price for solving relatively minor crimes?

Some think law-enforcement agencies have more pressing needs for such sophisticated sleuthing. "Many jurisdictions have a backlog for solving rapes and other violent crimes," and typically those should be tackled first, says David Lazer, a professor at Harvard's John F. Kennedy School of Government and an expert in the use of DNA for crime-solving.

Still, that hasn't stopped a five-city pilot project that revealed promising results earlier this week, notably that DNA evidence can significantly increase the chance of netting a burglar. Though burglaries and car thefts have dropped in many U.S. cities because of better policing and other measures, a study suggests that DNA evidence can make a huge difference in helping capture and convict those guilty of property crimes.

"We found that twice as many suspects were identified, twice as many were arrested and more than twice as many were prosecuted," says David Hagy, director of the National Institute of Justice, part of the U.S. Department of Justice, which funded the scientifically-conducted and randomized study.

Research suggests that habitual burglars commit on average more than 240 burglaries each year, and often don't stop there. "People committing serious crimes usually start on smaller ones. So through this process you can get these people identified and in the system earlier," says Steve Allison of the National Law Enforcement and Corrections Technology Center at the University of Denver.

The university recently teamed up with five regional Colorado law-enforcement agencies and a prosecutor to create a DNA lab that deals exclusively with property crimes. The latest statistics from the Federal Bureau of Investigation show property crimes, including burglary, larceny, motor-vehicle theft and arson, were down 1.1% nationally in 2007.

Britain was one of the first countries to embrace the broader use of DNA evidence. Its Forensic Science Service has even tested mobile vans that can analyze samples from a crime scene in six hours, far faster than a traditional lab. That may help quickly identify and nab a burglar still lurking in the vicinity. In some areas, police have given DNA swab kits to victims of hate crimes, in case they are spat on or otherwise attacked again.

Inspired by Britain's example, the Justice Department funded its project in Orange County, Calif.; Topeka, Kan.; Phoenix; Los Angeles and Denver. For the study, biological evidence was collected at as many as 500 burglary and similar crime scenes in each location, between November 2005 and July 2007. Detectives investigated half of the cases -- the control group -- by traditional means. The other half was investigated using DNA leads as well.

Two key results: DNA is at least five times as likely to result in a suspect identification compared with fingerprints. Plus, suspects identified by DNA were found to have at least twice as many prior felony arrests and convictions as those identified in the control group.

There are considerable hurdles to expanding the use of DNA sampling in crime fighting. Civil-liberties groups fret that the rapid growth in DNA databases -- which studies say include innocent people along with offenders -- threatens to erode citizens' privacy. And DNA-based investigations are expensive and require trained police and high-tech equipment.

"What kind of bang for the buck are you getting?" says Tania Simoncelli, science advisor to the American Civil Liberties Union. "It's not a responsible use of our resources."

Another problem is more mundane: logistics. In a typical investigation, experts take a DNA sample obtained from a crime scene and try to identify the culprit by matching the sample with DNA profiles already stored in a database from previous crimes. But in forensic labs nationwide, a crush of DNA samples has caused huge backlogs. In many states, Harvard's Mr. Lazer estimates that it takes four to six months from when a rape or murder is committed to when investigators run a DNA sample through the database.

In Denver, property crimes had risen 5% annually for several years before the project started. Since then, police say they have used DNA to trap 95 prolific burglars, leading to a 13% annual decline in burglaries in each of the last two years. DNA evidence also more than quintupled the rate of case prosecution.

Were other factors responsible for the decline? As it turned out, one of Denver's six police districts didn't get involved in the project, "and it was the only area where crime levels rose," says Mitchell Morrissey, the city's district attorney and an advocate of DNA-based technology.

Bob Arno, world's Fastest-Fingered Pickpocket

2008-03-27T13:15:00.000-07:00

Ripley's fastest fingers steal everything! Bob Arno is a stage pickpocket and films real thieves. Here he steals in the street.