WASHINGTON—Attorney General Eric Holder, Treasury Secretary Tim Geithner, Housing and Urban Development (HUD) Secretary Shaun Donovan, and Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro today announced that President Barack Obama has established by Executive Order an interagency Financial Fraud Enforcement Task Force to strengthen efforts to combat financial crime. The Department of Justice will lead the task force and the Department of Treasury, HUD, and the SEC will serve on the steering committee. The task force’s leadership, along with representatives from a broad range of federal agencies, regulatory authorities and inspectors general, will work with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, address discrimination in the lending and financial markets and recover proceeds for victims.

The task force, which replaces the Corporate Fraud Task Force established in 2002, will build upon efforts already underway to combat mortgage, securities and corporate fraud by increasing coordination and fully utilizing the resources and expertise of the government’s law enforcement and regulatory apparatus. The attorney general will convene the first meeting of the Task Force in the next 30 days.

“This task force’s mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening,” Attorney General Eric Holder said. “We will be relentless in our investigation of corporate and financial wrongdoing, and will not hesitate to bring charges, where appropriate, for criminal misconduct on the part of businesses and business executives.”

“Through the Financial Fraud Task Force, we are making clear that the Obama Administration is going to act aggressively and proactively in a coordinated effort to combat financial fraud,” said Treasury Secretary Geithner. “It’s not enough to prosecute fraud only after it’s become widespread. We can’t wait for problems to peak before we respond. We’re seeking comprehensive financial reform to create a more stable, safer financial system and stepping up our enforcement strategy. Doing so will help to stop emerging trends in financial fraud before they’re able to cause extensive, system-wide damage to our economy.”

“To give American families the protection and peace-of-mind they need, it’s clear the federal response must be as interconnected and multi-dimensional as the challenges we face,” said HUD Secretary Shaun Donovan. “No one agency is going to be able to stop financial fraud. This Task force will build upon many of the inter-agency collaborations already underway to protect consumers and restore confidence.”

“Many financial frauds are complicated puzzles that require painstaking efforts to piece together. By formally coordinating our efforts, we will be better able to identify the pieces, assemble the puzzle and put an end to the fraud,” said SEC Chairman Mary Schapiro.

The task force is composed of senior-level officials from the following departments, agencies and offices:

• the Department of Justice;
• the Department of the Treasury;
• the Department of Commerce;
• the Department of Labor;
• the Department of Housing and Urban Development;
• the Department of Education;
• the Department of Homeland Security;
• the Securities and Exchange Commission;
• the Commodity Futures Trading Commission;
• the Federal Trade Commission;
• the Federal Deposit Insurance Corporation;
• the Board of Governors of the Federal Reserve System;
• the Federal Housing Finance Agency;
• the Office of Thrift Supervision;
• the Office of the Comptroller of the Currency;
• the Small Business Administration;
• the Federal Bureau of Investigation;
• the Social Security Administration;
• the Internal Revenue Service, Criminal Investigations;
• the Financial Crimes Enforcement Network;
• the United States Postal Inspection Service;
• the United States Secret Service;
• the United States Immigration and Customs Enforcement;
• relevant Offices of Inspectors General and related Federal entities, including without limitation the Office of the Inspector General for the Department of Housing and Urban Development, the Recovery Accountability and Transparency Board and the Office of the Special Inspector General for the Troubled Asset Relief Program; and
• such other executive branch departments, agencies, or offices as the President may, from time to time, designate or that the Attorney General may invite.

In addition, the attorney general will invite representatives of the National Association of Attorneys General, the National District Attorneys Association and other state, local, tribal, and territorial representatives to participate in the task force through its Enforcement Committee.

As part of a continuing effort to identify the latest cyber crime trends and warn the public, the FBI today released the following information:

Within the last several months, the FBI has seen a significant increase in fraud involving the exploitation of valid online banking credentials belonging to small and medium businesses, municipal governments, and school districts. In a typical scenario, the targeted entity receives a “spear phishing” e-mail which either contains an infected attachment, or directs the recipient to an infected website. Once the recipient opens the attachment or visits the website, malware is installed on their computer. The malware contains a key logger which will harvest each recipient’s business or corporate bank account login information. Shortly thereafter, the perpetrator either creates another user account with the stolen login information or directly initiates funds transfers by masquerading as the legitimate user. These transfers have occurred as both traditional wire transfers and as ACH transfers.

Further reporting has shown that the transfers are directed to the bank accounts of willing or unwitting individuals within the United States. Most of these individuals have been recruited via work-at-home advertisements, or have been contacted after placing resumes on well-known job search websites. These persons are often hired to “process payments,” or “transfer funds.” They are told they will receive wire transfers into their bank accounts. Shortly after funds are received, they are directed to immediately forward most of the money overseas via wire transfer services such as Western Union and Moneygram.

Customers who use online banking services are advised to contact their financial institution to ensure they are employing all the appropriate security and fraud prevention services their institution offers.

The United States Computer Emergency Readiness Team (US-CERT) has made information on banking securely online available at: http://www.us-cert.gov/reading_room/Banking_Securely_Online07102006.pdf

Protecting your computer against malicious software is an ongoing activity and, at minimum, all computer systems need to be regularly patched, have up-to-date anti-virus software, and have a personal firewall installed. Further information is available at: http://www.us-cert.gov/nav/nt01/

If you have experienced unauthorized funds transfers from your bank accounts, or if you have been recruited via a work-at-home opportunity to receive transfers and forward money overseas, please notify the Internet Crime Complaint Center by filing a complaint at: http://www.ic3.gov.

For a detailed analysis of this scam please visit http://www.ic3.gov/media/2009/091103-1.aspx

10/29/2009 Department of Justice Press Release via the FBI website:

SAN JOSE, CA—Khalid Shaikh, a former CEO of YouSendIt Inc., was indicted by a federal grand jury yesterday with four counts of mail fraud, United States Attorney Joseph P. Russoniello announced.

The indictment states that between December 2008 and June 2009 Shaikh used the ApacheBench software program to launch four denial of service (DOS) attacks against YouSendIt’s servers. Each DOS attack temporarily rendered the servers incapable of handling legitimate network traffic and deprived YouSendIt’s customers use of the company’s services.

YouSendIt is a company based in Campbell, Calif., that is engaged in the business of digital content delivery through the Internet. YouSendIt enables users to send, receive and track large files of digital data. YouSendIt’s Web servers are located in San Jose. These servers are also used to facilitate interstate and foreign commerce and communication.

According to the indictment, when the company was established in 2004, Shaikh was one of YouSendIt’s founders. He served as the company’s chief executive officer until August 2005. Thereafter, Shaikh served as the company’s chief technology officer until he departed from YouSendIt in November 2006.

The maximum statutory penalty for each count of mail fraud in violation 18 U.S.C. §§ 1030(a)(5)(A) & (c)(4)(A) is five years imprisonment, three years of supervised release and a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Hanley Chew is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Legal Assistant Lauri Gomez, and Law Clerks Traci Lee and Lily Robinton. The charges are the result of a referral to and an investigation by the Federal Bureau of Investigation.

Please note: An indictment contains only allegations against an individual and, as with all defendants, Shaikh must be presumed innocent unless and until proven guilty.

PHILADELPHIA—Neal D. Saferstein, 36, of Mount Laurel, NJ, pleaded guilty today to four counts of an indictment stemming from a multi-million dollar telemarketing scam that defrauded as many as 400,000 small businesses out of as much as $75 million, announced U.S. Attorney Michael L. Levy. Saferstein was the President and Chief Executive Officer of  GoInternet.net, Inc. (“GoInternet”), which did business at 20 N. Third Street, and 6 Strawberry Street, in Philadelphia. GoInternet allegedly derived more than $75 million in gross revenues from a fraudulent telemarketing scheme that lasted from 2001 to 2004. Co-defendant Tyrone L. Barr, 35, of Philadelphia, was Vice President of Customer Service and Regulatory Affairs. Co-defendant Billy D. Light, 41, of Voorhees, NJ, was Chief Information Officer. Saferstein pleaded guilty today to one count of wire fraud, one count of mail fraud, and two counts of filing false tax returns. Sentencing is scheduled for February 2010.

According to the indictment, the entire GoInternet business model was designed to defraud customers and potential customers into making monthly $29.00 payments for Internet-related services without their knowledge or authorization. GoInternet’s telemarketers duped customers into receiving a welcome packet without disclosing that the mailing would trigger monthly bills unless the customer called to cancel. The packets were then designed to look like bulk business mail to prompt it to be disregarded or thrown away. GoInternet engaged in “cramming.” It would place monthly charges on its customers’ local telephone bills, without authorization, which customers routinely paid without noticing. By approximately 2003, GoInternet employed over 1,000 telemarketers and was signing on approximately 7,500 new customers every week. By the end of 2003, GoInternet’s customer base included more than 350,000 businesses.

Saferstein prevented customers from receiving notices disclosing the cost of services, and delayed and prevented refunds from going to customers that had been defrauded and were promised refunds. Barr created fake sales-verification tapes which were purported to contain the telemarketer’s call to the customer and the customer’s consent. Barr pleaded guilty to wire fraud and is awaiting sentencing.

In 2003, the Federal Trade Commission brought a civil proceeding regarding GoInternet’s practice of billing consumers for services without their authorization, which resulted in a $58 million judgment being imposed against Saferstein and GoInternet. Light admitted that Saferstein directed him to testify falsely before the federal district court in Philadelphia during the FTC proceedings. Light pleaded guilty to conspiracy to commit perjury and is awaiting sentencing.

Saferstein also used GoInternet corporate funds as if they were in his personal bank account, paying for significant personal expenses. He also failed to report income from the years 2000 to 2003 allegedly exceeding $1.7 million. In addition, the indictment charges defendant Saferstein with failing to pay over to the Internal Revenue Service more than $2.8 million in payroll taxes while he ran GoInternet.

Saferstein faces a maximum penalty of 46 years' imprisonment with a maximum fine of  $1 million.

Barr faces a maximum penalty of 20 years' imprisonment with a maximum fine of $250,000.

Light faces a maximum penalty five years' imprisonment with a maximum fine of $250,000.

The case was investigated by the Federal Bureau of Investigation, the Federal Trade Commission, the Federal Bureau of Investigation, the Internal Revenue Service and the U.S. Postal Inspection Service. It is being prosecuted by Assistant United States Attorneys Jennifer Arbittier Williams and Jason P. Bologna, and by FTC Special Assistant United States Attorney Larissa L. Bungo.

06/10/09—The FBI is currently aware of a nationwide attempt to extort ethnic business owners, mostly of Asian decent, through telephonic threats of violence. The telephone calls appear to be originating from foreign countries. The caller acquires an adequate amount of open source information about the victim through Internet searches. This misleads the victim into believing the subject has personal knowledge about the victim. There have been no reported incidents of violence actually perpetrated to date.

Individuals who receive phone calls or e-mails containing threats of violence and their personally identifiable information (PII) are encouraged to contact law enforcement as well as file a complaint at www.ic3.gov.

GREENBELT, MD—Charlotte Melissa Josephine Hardmon, age 39, of Bowie, Maryland, pleaded guilty today to conspiracy to commit wire fraud in connection with her participation in a massive mortgage fraud scheme which promised to pay off homeowners’ mortgages on their “Dream Homes,” but left them to fend for themselves, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

“Our investigation is continuing,” said U.S. Attorney Rod J. Rosenstein. “We aim to hold all perpetrators accountable and recover any remaining proceeds of the scheme.”

According to her plea agreement, beginning in 2005, co-conspirators targeted homeowners and home purchasers to participate in a purported mortgage payment program called the “Dream Homes Program.” In exchange for a minimum of $50,000 initial investment and an “administrative fee” of up to $5,000, the conspirators promised to make the homeowners’ future monthly mortgage payments, and pay off the homeowners’ mortgage within five to seven years. Dream Homes Program representatives explained to investors that the homeowners’ initial investments would be used to fund investments in automated teller machines (ATMs), flat screen televisions that would show paid business advertisements and electronic kiosks that sold goods and services. To give investors the impression that the Dream Homes Program was very successful, Metro Dream Homes spent hundreds of thousands of dollars making presentations at luxury hotels such as the Washington Plaza Hotel in Washington, D.C., the Marriott Marquis Hotel in New York, New York and the Regent Beverly Wilshire Hotel in Beverly Hills, California.

In February 2006, the Dream Homes Program added a second program called “POS Dream Homes” that offered similar promises of paying off investor mortgages in five to seven years in exchange for an upfront investment of $50,000 or more. Collectively, these programs had offices in Maryland, the District of Columbia, Virginia, North Carolina, New York, Delaware, Florida, Georgia, and California. The Dream Homes Program successfully recruited over 1,000 investors who invested over $70 million.

Hardmon was hired in December 2006 at an annual salary of $200,000 as a business consultant for digital advertising for Metro POS. Her salary was two and one-half times her prior salary as a marketing executive in Boston, Massachusetts. Hardmon received a Christmas bonus of $16,000 just two weeks after she began work.

Shortly after starting work, Hardmon saw that Metro POS had little organization. Personnel decisions as to hiring and salary were often made without consulting division heads such as Hardmon. Hardmon’s sales staff was being paid on salary, despite the fact that the sales staff had generated no material revenue.  Hardmon imposed a commission structure and laid off most of the staff in her division in an attempt to improve the disorganization.

Hardmon bought a home for $899,000 in June 2007 and enrolled her home in the Dream Homes Program.

At no time throughout her employment did Hardmon see any evidence of material revenue being generated from the digital advertising. She saw no evidence of any revenue being generated by any division of the company.

Hardmon attended a meeting of Metro Dream Homes senior executives in June 2007 in which they were told that the company was accumulating much more debt than revenue, and that the companies which Metro Dream Homes had been in “partnership” with also were generating no revenue.

After a cease and desist order was issued by a Maryland court against Metro Dream Homes, Hardmon participated in meetings in which investors were told that the company’s legal difficulties were the result of either misunderstandings or racial animus against company leaders. Hardmon knew the purpose of the meetings was to calm investor fears. She participated in these meetings, despite her knowledge that the company was generating no revenue. In a meeting on September 8, 2007, Hardmon stated that the digital advertising side of the company was viable. In addition, she stood by and gave audible support while senior Metro Dream Homes employees stated that the company was doing well.

From December 2006 to October 2007 while Hardmon was employed by Metro POS, she received approximately $167,000 in salary and one mortgage payment.

Hardmon faces a maximum sentence of 30 years in prison and a fine of $1 million or twice the value of the transaction, whichever is greater. U.S. District Judge Roger W. Titus scheduled sentencing for September 24, 2009, at 8:30 a.m. As part of her plea agreement, Hardmon has agreed to pay restitution for the full amount of the victims’ losses.

Carole Nelson, age 50, of Washington, D.C., pleaded guilty to money laundering on April 28, 2009 in connection with this scheme. Judge Titus scheduled her sentencing for August 6, 2009, at 8:30 a.m. As part of her plea agreement, Nelson has agreed to forfeit two homes in Virginia and Washington, D.C.

This prosecution is being brought jointly by the Maryland and Washington, D.C. Mortgage Fraud Task Forces, which are comprised of federal, state and local law enforcement agencies in Maryland, Washington, D.C. and Northern Virginia. The Task Forces were formed to promote the early detection, identification, prevention and prosecution of various kinds of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Forces, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and help to ensure the integrity of the mortgage market and other credit markets. Information about mortgage fraud prosecutions is available on the internet at http://www.usdoj.gov/usao/md/Mortgage-Fraud/index.html.

United States Attorney Rod J. Rosenstein praised the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, the Maryland Attorney General’s Office – Securities Division and the Federal Deposit Insurance Corporation – Office of Inspector General for their investigative work.  Mr. Rosenstein thanked Assistant U.S. Attorneys for the District of Maryland Jonathan C. Su and Bryan E. Foreman, who are prosecuting the case.

The company had all the trappings of success—its top
officials lived lavish lifestyles, kept a fleet of chauffeur-driven
cars, and donated generously to charities. And it used slick marketing
to sell its “Dream Homes Program,” which promised to pay homeowners’
mortgages in return for an up-front fee that would be invested in
profitable business ventures.

But the dream turned into a $70 million nightmare for more than a thousand investors—among the latest victims of mortgage fraud.

According to federal grand jury indictments unsealed today, the five
people behind Metro Dream Homes and the bogus mortgage payment program
were actually running an elaborate deception—one eventually unraveled
through the cooperative efforts of federal and state law enforcement
agencies.

“The effects of this wide-ranging mortgage fraud scheme are
particularly disturbing against the backdrop of today’s economic
environment,” said Thomas J. Harrington, Executive Assistant Director
of our Criminal, Cyber, Response, and Services Branch.

Here’s how the scam worked:

• Between 2005 and 2007, victims were persuaded into investing at
  least $50,000 with Metro Dream Homes, either by refinancing their
  existing homes or buying new homes at inflated prices.
• Investors
  were told not to worry about high mortgages because Metro Dream Homes
  would pay their future monthly payments and pay off their mortgages
  within five to seven years using returns on the homeowner’s original
  investment. Then the homeowner and Metro Dream Homes would own an equal
  interest in the home.
• Victims were told that their $50,000—not
  including an administrative fee of up to $5,000—would be used to fund
  investments in automated teller machines, flat-screen TV displays that
  carried commercial advertisements, and Touch-N-Buy electronic kiosks
  that sold telephone calling cards and other items.
• To make the
  scam seem more legitimate, the company marketed its program through
  live presentations at posh hotels in Washington, D.C.; Baltimore; and
  even Beverly Hills, California.

In the end, it was a classic Ponzi scheme: the proceeds from later investors went to pay the mortgages of earlier investors. The ATM machines, flat-screen TVs, and electronic kiosks never generated any meaningful revenue, federal prosecutors contend.

And the bulk of the money? It lined the defendants’ pockets—with
$200,000-a-year salaries, luxury cars, and travel to major sporting
events like the 2007 Super Bowl.

By the time law enforcement shut down the company, homeowners had
already invested about $70 million. When Metro Dream Homes stopped
making the mortgage payments, the homeowners were left holding the bag.
The defendants, meanwhile, are facing long prison terms for multiple
counts of fraud, conspiracy to commit money laundering, and other
charges.

At a press conference today at the Department of Justice to announce
the indictments, Harrington said that to combat the recent “exponential
rise in mortgage fraud investigations,” the FBI has increased the
number of agents who investigate mortgage fraud from 120 in 2007 to
more 250 today. We participate in 18 mortgage fraud task forces and 47
working groups across the country.

“One of the best tools the FBI has in its arsenal for combating
mortgage fraud,” he said, “is its long-standing partnerships with other
federal, state, and local law enforcement.”

If you have been the victim of a mortgage fraud scheme or have information about one, call your local FBI office or submit a tip electronically.

Resources:
- Press release 
- Mortgage fraud webpage

04/27/09—A spam e-mail claiming to be from former CBP Assistant Commissioner Thomas S. Winkowski is currently being circulated. This attempt to defraud is the typical e-mail scam using the name and reputation of a federal government official to create an air of authenticity.

The spam e-mail indicates the CBP has stopped a Diplomat who is carrying a consignment to be delivered to the recipient’s residence. This consignment allegedly contains millions of dollars, which is revealed to be an inheritance for the e-mail recipient.

As with many other scams, this e-mail advises the recipient they will be permitted to access this inheritance once the recipient has given the sender of the e-mail their personal information.

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

The U.S. CBP does not send unsolicited e-mails. Consumers should not respond to unsolicited e-mails or click on any embedded links, as they may contain viruses or malware.

It is imperative consumers guard their personally identifiable information (PII). Examples of a person’s PII include, but are not limited to: date of birth; social security number; and bank account numbers. Providing your PII will compromise your identity.

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

Given current market conditions, there has been no shortage of Ponzi investment schemes, perpetrators, and victims. These schemes are varied in their methods, but usually lure investors with the false promise of high financial returns or dividends not available through traditional investments.

This type of fraud is named after Charles Ponzi, who operated an enticing scheme in the early twentieth century that guaranteed investors a 50 percent return on their investment in postal coupons. Instead of investing the money he received, Ponzi simply used it to pay “dividends” to initial investors and pocketed the rest himself. The scheme fell apart when investors grew suspicious and funds dried up, making it impossible to make additional payouts and keep the ruse going.

“Too often investors are blinded by dreams of untold wealth,” said Assistant Director Kenneth W. Kaiser of the FBI’s Criminal Investigative Division. “These schemes highlight the need for law enforcement and regulatory agencies to be ever vigilant of white-collar crime both in boom and bust years. We also want to remind the public to exercise due diligence in selecting investments and the people with whom you entrust your money.”

“The bottom line is that individuals must approach investment opportunities with a dose of healthy skepticism,” said Supervisory Special Agent Stephen Kodak of the FBI’s National Press Office. “People are often to willing to suspend their disbelief if they think they will receive a fantastic payout. Just remember: if it sounds too good to be true, it probably is.”

There is no need to look much further than recent “Ponzi” scheme investigations to realize the scope of this matter. Recent press releases are listed below, with more available at www.fbi.gov.

• On 01/05/2009, four Florida defendants were charged in a $1 billion Ponzi investor fraud scheme.
• On 01/23/2009, a Broomall, Pennsylvania man was charged in a large-scale investment fraud that he used as a pyramid, or “Ponzi,” scheme to defraud investors of tens of millions of dollars between 1996 and 2008.
• On 01/26/2009, a Heber Springs, Arkansas man was sentenced to federal prison for defrauding investors of $43 million in a Ponzi scheme.
• On 01/26/2009, a North Haven, Connecticut man was sentenced to 48 months of in prison, followed by three years of supervised release, for operating a multi-million dollar Ponzi scheme in which he solicited investments for fictitious investment programs.
• On 01/27/2009, the President of a Long Island, New York investment firm was charged in a $370 million Ponzi scheme.
• On 02/05/2009, a grand jury in Seattle, Washington indicted three men for operating a $65 million Ponzi scheme.
• On 02/24/2009, the New York FBI Field Office arrested an individual based on the operation of an international, Internet-based "gold unit" Ponzi scheme.
• On 02/24/2009, a Forest Lake, Minnesota man was sentenced for his role in defrauding 519 people nationwide out of approximately $30 million in a Ponzi scheme operated under the name of the Joshua Tree Group.
• On 02/27/2009, a former Brentwood, Tennessee financial advisor and owner of Park Capital Management Group (“PCMG”) admitted to operating an elaborate Ponzi scheme to defraud investors who deposited funds with PCMG for investment in brokered stocks and other marketable securities.
• On 02/27/2009, a Chicago businessman was charged with luring two dozen investors into investing $4.7 million in commodity trading pools and using the money instead to fund two nightclubs, to pay gambling debts and other living expenses, and to make Ponzi-type payments to earlier investors.
• On 03/04/2009, two Arizonans and two others were indicted for a Ponzi fraud scheme. A 90-count indictment alleges at least 300 victims invested $8 million during the scheme.
• On 03/09/2009, a Marblehead, Massachusetts investment advisor was charged with wire fraud in connection with a Ponzi scheme to defraud two of his clients of more than $750,000.
• On 03/12/2009, Bernard L. Madoff pled guilty to an 11-count criminal information and was remanded into custody related to a massive multi-billion dollar Ponzi scheme.
• On 03/12/2009, Dennis R. Bolze was arrested in State College, Pennsylvania on federal wire fraud and money laundering charges associated with a Ponzi scheme.
• On 03/18/2009, an Atlanta, Georgia currency trader was charged with operating a $25 million Ponzi scheme.
• On 03/20/2009, Anthony Vassallo of Folsom, California was charged for his role in a massive Ponzi investment fraud scheme that brought in more that $40 million from 150 investors, many of whom he met in his church.
• On 03/31/2009, Manyu Ogale was sentenced to 10 years in prison on a federal charge of mail fraud arising out of a Ponzi scheme under the guise of a foreign currency “hedge fund” that defrauded investors out of more than $23 million.

Everyone’s seen them—seductive work-at-home opportunities hyped in flyers tacked to telephone poles, in newspaper classifieds, in your e-mail, and all over the web, promising you hundreds or thousands of dollars a week for typing, stuffing envelopes, processing medical billing, etc. And it’s just a phone call or mouse click away…

Might be tempting during these uncertain economic times, but beware of any offers that promise easy money for minimum effort—many are scams that fill the coffers of criminals.

Here are a few of the most common work-at-home scams.

• Advance-fee: Starting a home-based business is easy! Just invest a few hundred dollars in inventory, set-up, and training materials, they say. Of course, if and when the materials do come, they are totally worthless…and you’re stuck with the bill.
• Counterfeit check-facilitated "mystery shopper:" You’re sent a hefty check and asked to deposit it into your bank account, then withdraw funds to shop and check out the service of local stores and wire transfer companies. You keep a small amount of the money for your “work,” but then, as instructed, mail or wire the rest to your “employer.” Sound good? One problem: the initial check was phony, and by the time your bank notifies you, your money is long gone and you’re on the hook for the counterfeit check.
• Pyramid schemes: You’re hired as a “distributor” and shell out big bucks for promotional materials and product inventories with little value (like get-rich quick pamphlets). You’re promised money for recruiting more distributors, so you talk friends and family into participating. The scheme grows exponentially but then falls apart—the only ones who make a profit are the criminals who started it.
• Unknowing involvement in criminal activity: Criminals—often located overseas—sometimes use unwitting victims to advance their operations, steal and launder money, and maintain anonymity. For example, they may “hire" you as a U.S.-based agent to receive and re-ship checks, merchandise, and solicitations to other potential victims…without you realizing it’s all a ruse that leaves no trail back to the crooks.

Add identity theft to the mix. As if these schemes aren’t bad enough, many also lead to identity theft. During the application process, you’re often asked to provide personal information that can be used to steal from your bank account or establish new credit cards in your name.

On the job. A host of law enforcement and regulatory agencies, including the FBI, investigate these schemes and track down those responsible. But the most effective weapon against these fraudsters is you not falling for the scams in the first place.

A few tips:

• Contact the Better Business Bureau to determine the legitimacy of the company.
• Be suspicious when money is required up front for instructions or products.
• Don’t provide personal information when first interacting with your prospective employer.
• Do your own research into legitimate work-at-home opportunities, using the “Work-at-Home Sourcebook” and other resources that may be available at your local library.
• Ask lots of questions of potential employers—legitimate companies will have answers for you!

And if you think you’ve been the victim of a work-at-home scam, file a complaint with the Federal Trade Commission’s Consumer Sentinel or our Internet Crime Complaint Center.