2007 Internet Crime Report

ii |TableofConTenTs

Contents1. 2007 Internet Crime Report 1

Executive Summary 1

Overview 1

General IC3 Filing Information 2

Complaint Characteristics 5

Perpetrator Characteristics 7

Complainant Characteristics 10

Complainant - Perpetrator Dynamics 13

Additional Information About IC3 Referrals 14

Scams of 2007 14

Results of IC3 Referrals 15

Conclusion 17

2. Appendix 18

Appendix 1: Explaination of Complaint Categories 18

Appendix 2: Best Practices to Prevent Internet Fraud 19

Appendix 3: Complainant/Perprtrator Statistics, by State 22

Tables/Charts/Maps

Chart 1 2Chart 2 3Chart 3 3Chart 4 4Chart 5 5Chart 6 6Table 1 6Chart 7 7Map 1 8Table 2 8Map 2 9Chart 8 10Chart 9 10Map 3 11Table 3 11Map 4 12Table 4 12Table 5 13Chart 10 13Table 6 22Table 7 23Table 8 24Table 9 25

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1 2007InternetCrimereport

EXECUTIVE SUMMARYThe2007InternetCrimeReportistheseventhannualcompilationofinformationoncomplaintsreceivedandreferredbytheInternetCrimeComplaintCenter(IC3)tolawenforcementorregulatoryagenciesforappropriateinvestigativeaction.FromJanuary1,2007toDecember31,2007,theIC3websitereceived206,884complaintsubmissions.Thisisa0.3%decreasewhencomparedto2006when207,492complaintswere received.Thesefilingswere composedof fraudulent andnon-fraudulentcomplaintsprimarilyrelatedtotheInternet.

In2007,IC3processedmorethan219,553complaintsthatsupportInternetcrime investigationsby lawenforcementand regulatoryagencies nationwide.These complaints were composed of manydifferentfraudtypessuchasauctionfraud,non-delivery,andcredit/debitcardfraud,aswellasotherillegalbehavior,suchascomputerintrusions, spam/unsolicited e-mail, and child pornography. Allof these complaints are accessible to federal, state, and local lawenforcement to support active investigations, trend analysis, andpublicoutreachandawarenessefforts.

From the submissions, IC3 referred90,008 complaints of crimeto federal, state, and local law enforcement agencies around thecountry for further consideration. The vast majority of casesreferredallegedfraudandinvolvedafinanciallossonthepartofthe complainant.The total dollar loss from all referred cases offraudwas$239.09millionwithamediandollar lossof$680.00percomplaint.Thiswasanincreasefrom$198.44millionintotalreported losses in 2006. Other significant findings related to ananalysisofreferralsinclude:

Perpetrators were predominantly male (75.8%) and halfresidedinoneofthefollowingstates:California,Florida,NewYork,Texas,Illinois,PennsylvaniaandGeorgia.Themajority of reported perpetrators were from the UnitedStates. However, a significant number of perpetratorsalso were located in United Kingdom, Nigeria, Canada,Romania,andItaly.

Amongcomplainants,57.6%weremale,nearlyhalfwerebetweentheagesof30and50andone-thirdresided inoneofthefourmostpopulatedstates:California,Florida,Texas,andNewYork.WhilemostwerefromtheUnitedStates,IC3receivedanumberofcomplaintsfromCanada,UnitedKingdom,Australia,India,andMexico.

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Males complainants lost more money than females(ratioof$1.67toevery$1.00 lostperfemale).Thismaybe a function of both online purchasing differences bygenderandthetypeoffraudulentschemesbywhichtheindividualswerevictimized.

Electronicmail(e-mail)(73.6%)andwebpages(32.7%)werethetwoprimarymechanismsbywhichthefraudulentcontacttookplace.

Recent high activity scams commonly reported to theIC3in2007werethoseinvolvingpets,checks,spam,andonlinedating sites, allofwhichhaveproveneffectiveascriminaldevicesinthehandsoffraudsters.

OVERVIEWTheInternetCrimeComplaintCenter(IC3),beganoperationonMay8,2000astheInternetFraudComplaintCenter.InDecember2003,theInternetFraudComplaintCenter(IFCC)wasrenamedtheInternetCrimeComplaintCenter(IC3)tobetterreflectthebroadcharacterofsuchcriminalmattershavingacyber(Internet)nexus. IC3 established a partnership between the NationalWhiteCollarCrimeCenter(NW3C)andtheFederalBureauofInvestigation (FBI) to serveas a vehicle to receive,develop, andrefercriminalcomplaintsregardingtherapidlyexpandingarenaofcybercrime.IC3wasintendedandcontinuestoemphasizeservingthebroader lawenforcementcommunity, includingfederal, stateandlocalagencies,whichemploykeyparticipantsinthegrowingnumberofCyberCrimeTaskForces.Sinceitsinception,IC3hasreceivedcomplaintsacrossawidevarietyofcybercrimematters,includingonline fraud (in itsmany forms), intellectual propertyrights (IPR) matters, computer intrusions (hacking), economicespionage(theftoftradesecrets),childpornography,internationalmoneylaundering,identitytheft,andagrowinglistofadditionalcriminalmatters.

IC3givesthevictimsofcybercrimeaconvenientandeasy-to-usereporting mechanism that alerts authorities of suspected criminalor civil violations. For law enforcement and regulatory agenciesatthefederal,state,andlocal level,IC3providesacentralreferralmechanism for complaints involving Internet related crimes.Significantandsupplemental topartneringwith lawenforcementandregulatoryagencies,itwillremainapriorityobjectiveofIC3toestablisheffectiveallianceswithindustry.SuchallianceswillenableIC3toleveragebothintelligenceandsubjectmatterexpertresources,pivotalinidentifyingandcraftinganaggressive,proactiveapproachto combating cyber crime. In 2007, the IC3 saw an increase in

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severaladditionalcrimesthatwereexclusivelyrelatedtotheInternettheseincludedbutarenotlimitedtopetscams,checkcashingscams,online dating fraud, phishing, spoofing, and spam. Each of thesetypesofcomplaintshasincreasedinprevalenceoverthepastyear.

Overall, the “IC3 2007 Internet Crime Report” is the seventhannual compilation of information on complaints received andreferred by IC3 to law enforcement or regulatory agencies foraction.Thisreportprovidesanexaminationofkeycharacteristicsof1)complaints,2)perpetrators,3)complainants,4) interactionbetween perpetrators and complainants, 5) common Internetscams observed throughout the year and 6) success storiesinvolvingcomplaintsreferredbyIC3.TheresultsinthisreportareintendedtoenhanceourgeneralknowledgeaboutthescopeandprevalenceofInternetcrimeintheUnitedStates.Thisreportdoesnot representall victimsof Internetcrimeor fraudbecause it isderivedsolelyfrominformationprovidedbythepeoplewhofiledacomplaintwithIC3.

GENERAL IC3 FILING INFORMATIONInternetcrimecomplaintsareprimarilysubmittedtoIC3onlineatwww.ic3.gov.ComplainantswithoutInternetaccesscansubmitinformation via telephone. After a complaint is filed with IC3,the information is reviewed, categorized, and referred to theappropriatelawenforcementorregulatoryagency.

FromJanuary1,2007toDecember31,2007,therewere206,884complaintsfiledonlinewithIC3.Thisisa0.3%decreasecomparedto2006when207,492complaintswerereceived(seeChart1).Thenumberofcomplaintsfiledpermonth,lastyear,averaged17,240(seeChart2).Dollarlossofreferredcomplaintswasatanall-timehigh in2007, at$239.09million, as compared topreviousyears(seeChart3).

Chart 1

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Chart 3

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Chart 4

The number of referred complaints has increased slightly from86,279 in 2006 to 90,008 in 2007 (see Chart 4). The 116,876complaintsthatwerenotdirectlyreferredtolawenforcementareaccessibletolawenforcement,usedintrendanalysis,andalsohelpprovideabasisforfutureoutreacheventsandeducationalawarenessprograms.Typically,thesecomplaintsdonotrepresentdollarlossbutprovideapictureofthetypesofscamsthatareemergingviatheInternet.Thesecomplaintsinlargepartarecomprisedoffraudinvolvingreshipping,counterfeitchecks,phishing,etc.

During2007,therewere219,553complaintsprocessedonbehalfofthecomplainants.Thistotalincludesvariouscrimetypes,suchasauctionfraud,non-delivery,andcredit/debitcardfraud,othercriminalcomplaintsaswellasnon-fraudulentcomplaints,suchascomputerintrusions,spam,andchildpornography.

TheresultscontainedinthisreportwerebasedoninformationthatwasprovidedtoIC3throughthecomplaintformssubmittedonlineatwww.ic3.govorwww.ifccfbi.govbycomplainants;however,thedatarepresentsasub-samplecomprisedofthosecomplaintsreferredtolawenforcement.WhileIC3’sprimarymissionistoserveasavehicletoreceive,develop,andrefercriminalcomplaintsregardingcybercrime,thosecomplaintsinvolvingmoretraditionalmethodsof contact (e.g., telephone and mail) were also referred. Usinginformationprovidedbythecomplainants,itisestimatedthatover90%ofallcomplaintswererelatedtotheInternetoronlineservice.Criminal complaints were referred to law enforcement and/orregulatory agencies basedon the residenceof the subject(s) andvictims(s).In2007,therewere1MemorandumsofUnderstanding(MOUs) fromnon-NW3Cmember agencies added to the IC3database system and an additional 12 NW3C member agenciesaddedtothedatabase.


COMPLAINT CHARACTERISTICSDuring2007,Internetauctionfraudwasbyfarthemostreportedoffense, comprising 35.7% of referred crime complaints. Thisrepresentsa20.5%decreasefromthe2006levelsofauctionfraudreported to IC3. In addition, during 2007, the non-delivery ofmerchandiseand/orpaymentrepresented24.9%ofcomplaints(up31.1%from2006).Confidencefraudmadeupanadditional6.7%of complaints (seeChart 5).Credit anddebit card fraud, checkfraud, and computer fraud complaints represented 17.6% of allreferredcomplaints.Othercomplaintcategoriessuchasidentitytheft,financialinstitutionsfraud,threats,andNigerianletterfraudcomplaintstogetherrepresentedlessthan8.3%ofallcomplaints.

Statisticscontainedwithinacomplaintcategorymustbeviewedasasnapshotwhichmayproduceamisleadingpictureduetotheperceptionofconsumersandhowtheycharacterizetheirparticularvictimizationwithinabroadrangeofcomplaintcategories.ItisimportanttorealizeIC3hasactivelysoughtsupportfrommanykeyInternetE-Commercestakeholders.Aspartoftheseefforts,manyof thesecompanies, suchaseBay,haveprovided theircustomerswith links to the IC3website. Asadirect result, an increase inreferralsdepictedasauctionfraudhasemerged.

Through its relationships with law enforcement and regulatoryagencies,IC3continuestoreferspecificfraudtypestotheagencieswith jurisdiction over the matter. Complaints received by IC3included confidence fraud, investment fraud, business fraud, andotherunspecifiedfrauds.IdentitytheftcomplaintsarereferredtotheFederalTradeCommission(FTC)andalsoarebeingaddressedbyotheragencies.Nigerianletterfraudor419scamsarereferredtotheUnitedStatesSecretService(USSS)inadditiontootheragencies.

Comparedto2006,therewereslightlyhigherreportinglevelsofallcomplainttypes,exceptforauctionfraudandinvestmentfraud,in2007.ForamoredetailedexplanationofcomplaintcategoriesusedbyIC3,refertoAppendixIattheendofthisreport.

A key area of interest regarding Internet fraud is the averagemonetary loss incurred by complainants contacting IC3. Suchinformation is valuable because it provides a foundation forestimatingaverageInternetfraudlossesinthegeneralpopulation.Topresent informationonaverage losses, two formsofaveragesareoffered:themeanandthemedian.Themeanrepresentsaformofaveragingfamiliartothegeneralpublic:thetotaldollaramountdividedbythetotalnumberofcomplaints.Becausethemeancanbe sensitive to a small number of extremely high or extremelylow loss complaints, the median also is provided. The medianrepresentsthe50thpercentile,ormidpoint,ofalllossamountsforallreferredcomplaints.Themedianislesssusceptibletoextremecases,whetherthelossishighorlow.

Ofthe90,008fraudulentreferralsprocessedbyIC3during2007,72,226 involved a victim who reported a monetary loss. Othercomplainantswhodidnotfilealossmayhavereportedtheincidentpriortovictimization(e.g.,receivedafraudulentbusinessinvestmentofferonlineorinthemail),ormayhavealreadyrecoveredmoneyfromthe incidentprior tofiling (e.g., zero liability in thecaseofcredit/debitcardfraud). OtherreferralsthatdonothaveadollarlosssuchaschildpornographyaresenttotheNationalCenterforMissingandExploitedChildren,terroristtipsaresenttoPACUandthreatswhicharereferredtostateandlocallawenforcement.

Thetotaldollarlossfromallreferredcasesoffraudin2007was$239.09 million. That loss was greater than 2006 when a total

Chart 5


lossof$198.44millionwasreported. Ofthosecomplaintswitha reported monetary loss, the mean dollar loss was $2,529.90and themedianwas$680.00.Nearly sixteenpercent (15.5%)ofthese complaints involved losses of less than $100.00, and fortyoneandahalfpercent (41.5%)reporteda lossbetween$100.00and$1,000.00.Inotherwords,overhalfofthesecasesinvolvedamonetarylossoflessthan$1,000.00.Nearlyathird(30.7%)ofthecomplainants reported losses between $1,000.00 and $5,000.00andonly12.2%indicatedalossgreaterthan$5,000.00(seeChart

Amount Lost by Selected Fraud Type for individuals Reporting Monetary Loss

Complaint Type % of Reported Total Loss

Of those who reported a loss the Average (median) $ Loss per Complaint

Investment Fraud 6.1% $3,547.94Check Fraud 9.9% $3,000.00Nigerian Letter Fraud 6.4% $1,922.99Confidence Fraud 12.6% $1,200.00Auction Fraud 22.4% $483.95Non-delivery (merchandise and payment)

17.8% $466.00

Credit/Debit Card Fraud 4.6% $298.00

Chart 6

Table1

6).ThehighestdollarlossperincidentwasreportedbyInvestmentFraud (median loss of $3,547.94). Check fraud victims, with amedianlossof$3,000.00andNigerianletterfraud(medianlossof $1,922.99) were other high dollar loss categories.The lowestdollarlosswasassociatedwithcredit/debitcardfraud(medianlossof$298.00).


PERPETRATOR CHARACTERISTICSEqually important to presenting the prevalence and monetaryimpactofInternetfraudisprovidinginsightintothedemographicsoffraudperpetrators.Inthosecaseswithareportedlocation,over75%oftheperpetratorsweremaleandoverhalfresidedinoneofthefollowingstates:California,Florida,NewYork,Texas,Illinois,Pennsylvania,andGeorgia(seeChart7andMap1).Theselocationsare among the most populous in the country. Controlling forpopulation,DistrictofColumbia,Nevada,Delaware,Florida,NewYork,andUtahhavethehighestpercapitarateofperpetratorsintheUnitedStates.Perpetratorsalsohavebeenidentifiedasresidingin United Kingdom, Nigeria, Canada, Romania, and Italy (seeMap2). Interstateand internationalboundariesare irrelevant to

Chart 7

Internetcriminals.Jurisdictionalissuescanimpedeinvestigationsduetoissueswithmultiplevictims,multiplestates/countries,andvaryingdollarlossthresholdsusedforinitiatinginvestigations.

The vast majority of perpetrators were in contact with thecomplainant through either e-mail or via the web. (Refer toAppendix III at the end of this report for more informationaboutperpetratorstatisticsbystate).ThesestatisticshighlighttheanonymousnatureoftheInternet.Thegenderoftheperpetratorwasreportedonly42%ofthetime,andthestateofresidencefordomesticperpetratorswasreportedonly35.1%ofthetime.


Top Ten States by Count: Individual Perpetrators

Perpetrators per 100,000 people

Rank State Per 100,000 People1 District of Columbia 99.102 Nevada 65.453 Delaware 41.984 Florida 40.735 New York 38.066 Utah 36.407 Washington 31.968 California 31.879 Alaska 28.5310 Rhode Island 28.45

Map 1 - Top Ten States (Perpetrators)1.California 15.8%2.Florida 10.1%3.NewYork 9.9%4.Texas 7.0%5.Illinois 3.6%

Table 2

6.Pennsylvania 3.5%7.Georgia 3.1%8.Ohio 2.8%9.Washington 2.8%10.NewJersey 2.8%


Top Ten Countries By Count: Perpetrators

Map 2 - Top Ten Countries By Count (Perpetrators)1.UnitedStates 63.2%2.UnitedKingdom 15.3%3.Nigeria 5.7%4.Canada 5.6%5.Romania 1.5%

6.Italy 1.3%7.Spain 0.9%8.SouthAfrica 0.9%9.Russia 0.8%10.Ghana 0.7%


COMPLAINANT CHARACTERISTICSThefollowinggraphsofferadetaileddescriptionoftheindividualswhofiledanInternetfraudcomplaintthroughIC3.Theaveragecomplainant was male, between 40 and 49 years of age, and aresident of one of the four most populated states: California,Florida,Texas, and New York (see Chart 8 and 9 and Map 3).Alaska,Colorado,andWashington,whilehavingarelativelysmallnumberofcomplaints(ranked24th,16th,and8threspectively),hadamongthehighestpercapitarateofcomplainantsintheUnitedStates (see Table 3). While most complainants were from theUnited States, IC3 has also received a number of filings fromCanada,theUnitedKingdom,andAustralia(seeMap4).

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Top Ten States By Count: Individual Complainants

Complainants per 100,000 people

Rank State Per 100,000 People1 Alaska 356.412 Colorado 90.653 Washington 86.764 Maryland 83.395 Nevada 81.906 Oregon 79.417 Arizona 78.588 District of Columbia 78.199 Florida 71.1810 California 70.87

Map 3 - Top Ten States (Complainant)1.California 14.4%2.Florida 7.2%3.Texas 7.2%4.NewYork 5.7%5.Pennsylvania 3.6%

Table 3 - based on 2007 Census figures

6.Illinois 3.5%7.Ohio 3.1%8.Washington 3.1%9.NewJersey 3.1%10.Virginia 2.9%


Table4comparesdifferencesbetweenthedollarlossperincidentand the various complainant demographics. Males reportedgreaterdollarlossesthanfemales(ratioof$1.67toevery$1.00).Individualsover60yearsofagereportedhigherorequalamountsoflossthandidotheragegroups.

Amount Lost per Referred Complaint by Selected Complainant Demographics Complainant

Demographics

Average (Median) Loss Per Typical Complaint

Male $765.00Female $552.00

Under 20 $384.9920-29 $610.0030-39 $699.9940-49 $760.0050-59 $750.40

60 and older $760.00

Top Ten Countries (Complainant)

Map 4 - Top Ten Countries (Complainant)1.UnitedStates 91.9%2.Canada 2.10%3.UnitedKingdom 1.1%4.Austrailia 0.60%5.India 0.36%

Table 4

6.Mexico 0.18%7.SouthAfrica 0.16%8.Germany 0.14%9.France 0.14%10.Philippines 0.11%

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COMPLAINANT-PERPETRATOR DYNAMICSOneofthecomponentsoffraudcommittedviatheInternetthatmakesinvestigationandprosecutiondifficultisthattheoffenderandvictimmaybelocatedanywhereintheworld.Thisisauniquecharacteristic not found with other types of “traditional” crime.Thisjurisdictionalissueoftenrequiresthecooperationofmultipleagencies to resolve a given case. Table 5 highlights this truly“borderless”phenomenon.EveninCalifornia,wheremostofthereported fraudcasesoriginated,only18.3%ofall cases involvedboth a complainant and perpetrator residing in the same state.Other states have an even smaller percentage of complainant-perpetrator proximity in residence. These patterns not onlyindicate“hotspots”ofperpetrators(Californiaforexample)thattargetpotentialvictimsfromaroundtheworld,butalsoindicatethatcomplainantsandperpetratorsmaynothavehadarelationshippriortotheincident.

AnotherfactorthatimpedestheinvestigationandprosecutionofInternetcrimeistheanonymityaffordedbytheInternet.Althoughcomplainantsinthesecasesmayreportmultiplecontactmethods,few reported interacting face-to-face with the vast majority ofperpetrators.Contactwithcomplainantspredominantlystemmedfrom e-mail (73.6%) or a webpage (32.7%) communication.Othersreportedlyhadphonecontact(18.0%)withtheperpetratoror corresponded through physical mail (10.1%). Interactionthroughchatrooms(2.3%)andin-person(1.7%)meetingsrarelywere reported.The anonymous nature of an e-mail address or awebsite allows perpetrators to solicit a large number of victimswithakeystroke(seeChart10).

Perpetrators from Same State as Complainant

State Percent 1 2 �1. California 18.3 (New York 9.1%) (Florida 8.0%) (Texas 5.7%)2. Florida 13.6 (California 13.4%) (New York 8.1%) (Texas 5.7%)3. New York 12.6 (California 12.9%) (Florida 9.1%) (Texas 5.9%)4. Nevada 10.9 (California 14.4%) (Florida 9.5%) (New York 9.5%)5. Texas 10.9 (California 11.7%) (Florida 9.5%) (New York 8.9%)6. Arizona 10.6 (California 12.9%) (Florida 8.8%) (New York 8.4%)7. Illnois 9.2 (California 12.9%) (Florida 8.9%) (New York 8.9%)8. New Mexico 8.8 (California 11.3%) (Florida 8.3%) (New York 8.0%)9. Washington 8.8 (California 13.6%) (New York 9.3%) (Florida 8.8%)10. Tennessee 8.7 (California 12.2%) (Florida 10.3%) (New York 9.5%)

Table 5 - Other top three locations in parentheses

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ADDITIONAL INFORMATION ABOUT IC3 REFERRALSAlthough IC3 is dedicated to specifically addressing complaintsabout Internet crime, it also receives complaints about othercrimes.Theseincluderobberies,burglaries,threats,aswellasotherviolentcrimesandotherviolationsoflaw.Thepeoplesubmittingthesetypesofcomplaintsaregenerallydirectedtomakeimmediatecontact with their local law enforcement agency in order tosecureatimelyandeffectiveresponsetotheirparticularneeds.Ifwarranted, the IC3 personnel may make contact with local lawenforcement authorities on behalf of the complainant. IC3 alsoreceivesasubstantialnumberofcomputer-relatedoffensesthatarenotfraudulentinnature.

Forthosecomplaintsthatarecomputer-relatedbutnotconsideredInternet fraud, IC3 routinely refers these to agencies andorganizationsthathandlethoseparticularviolations.Forexample,if IC3 receives information related to a threat on the Presidentof the United States, the complaint information is immediatelyforwardedtoPACU(FBItips)whoforwardsthemtotheUnitedStatesSecretService.Spam(USSS)complaintsandcasesofidentitytheftareforwardedtotheFederalTradeCommission(FTC)andreferredtoothergovernmentagencieswithjurisdiction.TheFTCalsoreceivesallothercomplaintsonamonthlybasisaswell.

SCAMS OF 2007AmongtheInternet-facilitatedscamscommonlyreportedtotheIC3in2007werethoseinvolvingpets,checks,spam,andonlinedatingsites,allofwhichhaveproveneffectiveascriminaldevicesinthehandsoffraudsters.Inanefforttoraisepublicawareness,thissectiondescribesthebasiccharacteristicsofthesescams,whilehighlightingtheirvariationsandthewaystheyoftenoverlap.

Pet ScamsPetscamscantargeteitherbuyersorsellers.Inpetscamstargetingbuyers, fraudstersadvertisepets forsale inonline(orhardcopy)publications and agree to sell to buyers. Buyers, in turn, sendpayment to the fraudsters, often covering delivery costs as well.Then, having parted with their money, the buyers wait for theirpetstobedelivered;butthepetsneverarrive.

Whenpetscamstargetsellers,thefraudsteragreestobuythepetand sends the seller a bad check (or some other illicit paymentinstrument)foranamountthatexceedstheaskingprice.Whenaskedabouttheoverpayment,thefraudsterexplainsthattheextramoneyis intendedforanotherpersonwhowillbereceivingandtemporarily caring for thepet. The fraudster then instructs thesellertodepositthecheckandwirethedifferenceimmediatelytothisotherperson.Ifthescamissuccessful,thesellerwiresmoneytothefraudster,andthefraudstermakesoffwiththecashbeforethebankreturnstheinitialpaymentasinvalid,atwhichpointthesellerabsorbsthefinancialloss.

Secret Shopper and Funds Transfer ScamsAnotherkindofscaminvolvingtheuseofbadchecksisthesecretshopperscam.Inthisscam,victimsareledtobelievethattheyhavebeenhiredtoshopordineoutandtosubmitevaluationsoftheirconsumerexperiences.Asequenceoffinancialtransactions,similartotheonecharacterizingseller-targetedpetscams,thenfollows:Victims receive bad checks, are instructed to deposit them, andthenareaskedtowireapercentageofthemoneytoathirdparty,whileusingtherestofthemoneytocompletetheirassignments.As intheseller-targetedpetscams, thisscamissuccessfulwhenthefraudsterisabletoconvertthevictim’swiretransferintocashbeforethebankrealizesthattheinitialpaymentiscounterfeit.

Inordertogivethesecretshopperscamtheappearanceofalegitimateemploymentopportunity,manyfraudsterscommitanothercrime:they misappropriate brand logos and place them on letters or ine-mailscontaininginstructionsfor“newhires,”thusviolatingU.S.copyrightlaw.Forinstance,thelogosofWal-Mart,FedEx,Target,McDonalds,Gap,Pepsi,Kmart,andMoneyGramallhaveappearedonsuchletters.Theuseoftheselogosgivesthedocumentanofficialappearanceandofteniseffectiveindeceivingrecipients.

Several variations of this overpayment scam have surfacedin the past year, including one in which people advertise rentalproperties—particularlyapartmentsandotherkindsofresidentialunitsInthesescams,thefraudstersendstherenteranamountofmoneythatexceedstheamountofrentdueandinstructstherentertowirethedifferencetoathirdparty.Inaslightlydifferentversionofthisscam,victimsareledtobelievethattheyhavebeenhiredbya company to receivepaymentson the company’sbehalf andto redistribute funds via wire transfers to other people affiliatedwiththecompany(e.g.,employees,clients,contactpersons,etc.).Here,thesamesequenceoffinancialtransactionsispresent,onlythehookisnotanoverpayment;itisthejobdescriptionitselfthatrequiresvictimstoreceiveandredistributemoney.

Adoption Fraud (Charity Fraud)Anotherprevalent scamreported to the IC3 involves theuseofunsolicitede-mails,orspam.Thespecificformtakenbythisscamvaries,butessentiallythescamincludese-mailsthatappealtothemorecompassionateandcharitableamongus,oftenannouncingin the subject field, “URGENT ASSISTANCE IS NEEDED.”Suchscamsarecommonlyknownas“charityfrauds.”

AcharityfraudthatcametotheIC3’sattentionin2007involvedspamwhere senders claimed tobe representativesof theBritishAssociationforAdoptionandFostering(BAAF),alegitimateUK-registeredcharity;however,accordingtotheBAAF,thespammerswerenotcollectingmoneyontheorganization’sbehalf;theywereout to defraud people. The content of the spam was generallydevotedtoexplainingthepredicamentofanorphanorabandonedchildandtoconvincetherecipienttofileforadoption.Thespamthensolicitedtherecipientformoneytocoverapplicationfees.


Anotherversionofthisscaminvolvesaslightlydifferentapproach.Itcastsamuchwidernetbyaddingafinanciallure.Inthisversion,thespamcontainsapoignantaccountofachildwhoseonlyparentisabouttodieduetosomeincurableillness.Moreover,thedyingparentisrichandhaspromisedtoleaveasmallfortunetowhoeveradopts thechild. Here,again, theBAAFis invoked togive thesolicitationanairoflegitimacyandtherecipientisaskedtosendmoneyfortheadoptionpapers.

Spam, of course, is thepreferred instrument in awide variety ofotherscams.Perhapsforemostamongthesescamsisthe“phishing”expeditionthatcanleadtoidentitytheft.Phishingreferstothepracticeofelicitingidentityinformationfromvictimsunderfalsepretenses.Forinstance,theintendedvictimreceivesane-mailthatpurportstocollectpersonalinformationonbehalfofafinancialinstitutioninordertoupdatepersonalfiles.Here,again,themisappropriationofabrandlogooftenisusedtogivethecommunicationalegitimateappearance.Ifthephishingissuccessful,thevictimdiscloseshisorheridentityinformationtothefraudster,who,inturn,cansellthisinformationorassumetheperson’sidentitywhiletakingoutbankloansorapplyingforcreditcards.

Romance FraudOnlinedatingandsocialnetworkingsitesalsohavefiguredprominentlyinscamsreportedtotheIC3.Fraudstersusethesesitesasspringboardsfor meeting people and committing what is commonly known as“romancefraud.”Here’showitworks:Aftermeetingsomeoneatoneofthesesites,thefraudstertriestogainaperson’strustthroughfalsedisplaysofaffection.Inmostcases,thefraudsterlivesfaraway,usuallyinanothercountry.Thefraudsterexpressesanardentdesiretovisittheperson,butthefraudstercannotaffordtomakethetrip.Thescamissuccessfulwhenthetwoagreetomeetandthefraudsterconvincesthevictimtosendmoneytocoverhistravelexpenses.Then,invariably,an unforeseen event (often an accident of some sort) prevents thefraudster frommaking the trip (or, at least, so goes the fraudster’slie).Thefraudsterlandsinthehospital,andnowthevictim’smoneyhastobeusedtocovermedicalexpenses.Thefraudster’sbrotherhasbeenkidnapped,andnowthemoneyhastobeusedtosethimfree.Thefraudsterwasmuggedonherwaytotheairport,andnowshehasnomoneyatall.Inanyevent,thefraudsteralwaysneedsmoremoney;and,ifthefraudster’ssuccesscontinues,heisabletoobtainmoremoneyfromthevictimwhilemakingmorepromisestovisit.Thefraudster,however,alwayshasanexcuse formissingtheplane,andtheroundsoffalsepromisesandexcusescontinueuntilthevictimlosespatienceandstopssendingmoney.

Scam Synopsis The scams detailed above are just a sample of scams that werefrequentlyreportedtotheIC3in2007.Althoughinthisreportwehavefocusedonpets,checks,spam,andonlinedatingsites,wewouldberemisstoleavetheimpressionthattheInternetfraudster’stoolboxis limited to these devices. The Internet presents fraudsters withmyriadopportunitiestomultiplythedevicesattheirdisposal.Somefraudsters,aswehaveseen,haveevenusedthereputationsofcharitableorganizationstoexploitthemostbenevolentofhumanimpulses.

PerhapsthebestwaytoguardagainstInternet-facilitatedscamsistosimplystayinformed.KeepinginformedofthelatestscamsontheInternetmayenableInternetuserstorecognizeandreportthesescamsinsteadoflosingmoneyinoneofthem.Tolearnaboutthenewscams,werecommendperiodicallycheckingtheFBI,andIC3andlookstoogoodtobetrue.comwebsitesforthelatestupdates.

RESULTS OF IC3 REFERRALSIC3routinelyreceivesupdatesonthedispositionofreferralsfromagencies receiving complaints.These includedocumentedarrestsandrestitution,aswellasupdatesrelatedtoongoinginvestigations,pendingcases,andarrestwarrants.However,IC3canonlygatherthis data from the agencies that voluntarily return enforcementresults, and it has no authority to require agencies to submit orreturnstatusforms.

IC3 has assisted law enforcement with many successful caseresolutions.Someofthecasesincludethefollowing:

TheColoradoAttorneyGeneral’sOfficeannouncedtheyhavereacheda$40,000out-of-courtsettlementwithUzedEnterprisesandtheircompanypresident,SteveBonneau.The company, which has been the subject of more thanahundredcomplaintsfiledwiththeIC3inthepasttwoyears, operated theUzed.comwebsite. The site solicitedconsumerstosendtheirusedCDs,DVDs,videogamesandelectronicstotheBroomfield-basedbusinessinexchangeforanadvertisedpayment.TheColoradoAttorneyGeneral’sOfficereceivedmorethan200complaintsfromtheBetterBusinessBureauandtheIC3whenthecompanyfailedtopayconsumersinatimelyfashion.Someconsumersstatedtheyhadnotbeenpaidatall.

Prior to the settlement, Consumer Protection IntakeManagerNancyBullis,contactedtheIC3andrequesteda search of the complaint database to identify as manyvictimsaspossible.Thissearchuncovered127consumerswhohadfiledagainstthesitewiththeIC3.ThesettlementrequiresUzedandBonneautopaybacknearly$40,000tomorethan400consumersacrossthecountry.Inaddition,thecompanyandBonneauarebarredfromoperatinganybusiness in Colorado in which they are responsible forpayingconsumers,unlessabondisinplace.

TwoHouston,TXmenhavebeenfoundguiltyofsettingup a bogus Salvation Army website that collected morethan $48,000 in the name of Hurricane Katrina relief.Brothers Steven and Bartholomew Stephens set upthe site in September 2005, which collected money viaPayPal,inSeptember2005,butithadnoaffiliationwiththe Salvation Army. According to testimony from FBIAnalystTonyYurkovich(assignedtoIC3),thesitefeaturediconsassociatedwiththeChristianorganizationincludingtheredshieldandkettle.Thebrothersusedotherpeople’sidentitiestosetupthePayPalaccounts,buthadthemoneysenttotheirbankaccounts.Thebrothershadadozenbankaccounts,sixofwhichreceivedhurricanereliefdonations.Theaccountswerefrozenafterfraudreportsweremade.

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1� | InternetCrimeComplaintCenter

Thebrotherswerefoundguiltyonninecountsofconspiracy,wirefraud,andaggravatedidentitytheft.Theyfaceuptotwentyyearsinprisonandfinesupto$250,000.

The New Jersey Attorney General reports that John G.Messinawassentencedtothreeyearsinstateprisonandrestitution of $35,500 for perpetrating an online fraudand check kiting scheme. Messina advertised online atvFinance.com,claimingthathecouldobtaininvestorsandinvestmentcapital forbusinesses. Hesubsequentlytook$14,900 from victims while promising to either securemoney from investors for the client or to release fundsthathehadalreadyraisedfortheclient;heneverobtainedinvestorsorraisedmoneyforthevictims.Messinaalsowasorderedtopay$20,600toBankofAmericaforcheckkitingwhereinhedepositedthisamountintohismother’sBankofAmericaaccountusingfraudulentchecks,withdrawingthemoneybeforethecheckhadtimetobounce.

FourdefendantshavebeenarraignedinAtlanta,Georgiaon Internet fraud charges. Jonathan Rembert, DwayneBarrow,ClarenceShelton,andAndweleButler,alongwiththree others, face federal wire fraud and conspiracy tocommitwirefraudchargesrelatedtoaneBayfraudring.ThechargesstatethatthedefendantsusedeBayauctionstosellcustomcartiresandrimsaswellasvehicles.Interestedcustomers negotiated a price with the defendants andpaymentwasmadeviawiretransferorWesternUnion;itisallegedthatthemerchandisewasneversenttothevictims.From July 2003 to October 2006, 215 individuals paidthedefendants approximately$539,000 fornon-existentmerchandise. This case is currently being investigatedbytheFBIandisbeingprosecutedbytheUnitedState’sAttorneysOfficefortheNorthernDistrictofGeorgia.

InFebruaryof2007,theUnitedStatesAttorney’sOfficefor the Southern District of Florida announced thatthree defendants, Steven Michael May, Jr., ChristopherWilliam Cook, and Joseph JohnVaquera, pled guilty tomailfraudchargesina$2millionschemetodefraudretailbusinessesthroughouttheUnitedStates.Thedefendantsused false and fraudulent financial information toestablishbusiness-to-businesslinesofcreditwithover30businesses. Thiscredit thenwasusedtoobtainassortedhigh-end merchandise (including computer monitors,flat-screen televisions, DVD camcorders, electronicequipmentandcameras). Themerchandisewasshippedtovariouscommercialmailboxesorvirtualbusinessoffices(setupbythedefendants)acrosstheUnitedStates.Oncemerchandisewasreceivedatthemailboxorvirtualoffice,thedefendantswouldhavethemerchandisere-shippedtoa different commercial mailbox, virtual office, or storagefacility located in Palm Beach County. The defendantssubsequently sold the high-end merchandise througheBayauctionsforaprofit.

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TerranceJ.HolmesofVermillion,Ohiowassentencedto37monthsinprisonandthreeyearsofsupervisedreleasefor wire fraud charges. Holmes owned and operatedGPS Computer Services from January 2001 to February2002. Thecompanyofferedvarious laptopandnotebookcomputersforsaleviaanInternetwebsiteforthecompanyand through eBay auctions. The computers, retailing for$1,100to$1,600each,weresoldfor$400to$700.Orderswereaccepted fromat least1,187customersvia Internet,phone, and in-person, with sales totaling approximately$964,560.Themerchandise,however,wasnotdelivered.Inadditiontoprisontime,Holmeshasalsobeenorderedtopayrestitutiontothevictimsintheamountof$867,340.09.

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National White Collar Crime Center, The National Public Survey on White Collar Crime, August 2005.1.


CONCLUSIONThe IC3 report has outlined many of the current trends andpatterns in Internet crime. The data indicates that fraud isincreasing;however,reportedcomplaintsremainedrelativelylevelwith206,884complaintsin2007,downfrom207,492complaintsin 2006, 231,493 complaints in 2005, and 207,449 complaintsin 2004. This total includes many different fraud types, non-fraudulentcomplaints,aswellascomplaintsofothertypesofcrime.Yet, research indicates that onlyone in seven incidents of fraudevermaketheirwaytotheattentionofenforcementorregulatoryagencies.1Thetotaldollarlossfromallreferredcasesoffraudwas$239.09millionin2007upfrom$198.44millionin2006.

Internet auction fraud again was the most reported offensefollowedbynon-deliveredmerchandise/paymentandconfidencefraud.Amongthose individualswhoreportedadollar loss fromthe fraud, the highest median dollar losses were found amonginvestmentfraudvictims($3,547),checkfraudvictims($3,000),and Nigerian letter fraud victims ($1,922). Male complainantsreportedgreaterlossesthanfemalecomplainants,whichmaybeafunctionofbothonlinepurchasingdifferencesbygenderandthetypeoffraud.Comparingdatafromthe2006andthe2007reports,e-mailandwebpageswerestillthetwoprimarymechanismsbywhichthefraudulentcontacttookplace.

Although this report can provide a snapshot of the prevalenceandimpactofInternetfraud,caremustbetakentoavoiddrawingconclusions about the “typical” victim or perpetrator of thesetypesof crimes.Anyonewhoutilizes the Internet is susceptible,and IC3 has received complaints from both males and femalesranginginagefromtentoonehundredyearsold.Complainantscanbefoundinallfiftystates,indozensofcountriesworldwide,andhavebeenaffectedbyeverythingfromwork-at-homeschemesto identity theft.Althoughtheability topredictvictimization islimited,particularlywithout theknowledgeofother related riskfactors (e.g., the amount of Internet usageor experience),manyorganizationsagreethateducationandawarenessaremajortoolsto protect individuals. Despite the best proactive efforts, someindividualsmayfind themselves thevictimsof computer-relatedcriminalactivityevenwhenfollowingthebestpreventionstrategies(seeAppendixII).

Overthetwoyears,theIC3hasbeguntoupdate/changeitsmethodof gathering data regarding complaints, in recognition of theconstantlychangingnatureofcybercrimeandtomoreaccuratelyreflectmeaningfultrends.Withthisinmind,changestotheIC3websiteandcomplaintformhavebeenimplemented,withmanyofthosechangestakingeffectasofJanuary,2006.Alongwiththesechanges,theIC3anditspartnerscontinuetohostapublicwebsite,www.lookstoogoodtobetrue.com, which educates consumers withvariousconsumeralerts,tips,anddescriptionoffraudtrends.

Inreviewingstatisticscontainedinthisreport,itisrecognizedthatconsumersmaycharacterizecrimeproblemswithaneasier“broad”character, which may be misleading. For instance, a consumerthatgets lured toanauctionsitewhichappears tobeeBaymaylaterfindthattheywerevictimizedthroughacyberscheme.Thescheme may in fact have involved SPAM, unsolicited e-mail

invitingthemtoasite,anda“spoofed”websitewhichonlyimitatedthetruelegitimatesite.TheaforementionedcrimeproblemcouldbecharacterizedasSPAM,phishing,possibleidentitytheft,creditcardfraud,orauctionfraud.Insuchscenarios,manycomplainantshavedepictedschemessuchasauctionfraudeventhoughthatlabelmaybeincompleteormisrepresentthescopeofthescheme.

ItalsoisimportanttonotethattheIC3hasactivelysoughtsupportfrom many key Internet E-Commerce stake holders over the pastseveralyears.Withtheseefforts,companieslikeeBayhaveadoptedaverypro-activepostureinteamingwiththeIC3toidentifyandrespondto cyber crime schemes. As part of these efforts, eBay and othercompanieshaveprovidedguidanceand/orlinksfortheircustomerstotheIC3website.Thisactivityalsohasnodoubtalsocontributedtoanincreaseinreferralsregardingschemesdepictedas“auctionfraud.”

Whetheraconsumerhasbecomeavictimofabogusinvestmentoffer,adishonestauctionseller,orahostofotherInternetcrimes,theIC3isinthepositiontoofferassistance.Throughtheonlinecomplaint and referral process, victims of Internet crime areprovidedwithaneasywaytoalertauthorities,atmanydifferentjurisdictionallevels,ofasuspectedcriminalorcivilviolation.

National White Collar Crime Center, The National Public Survey on White Collar Crime, August 2005.1.

1� | InternetCrimeComplaintCenter-appendix 2007InTerneTCrImereporT-appendIx | 1�

Explanation of Complaint TermsIC3 Internet Fraud Analysts determined a fraud type for eachInternetfraudcomplaintreceivedandsortedcomplaintsintofraudandcrimecategories.Belowarethedefinitionsforthecategoriesandtermsusedwithinthisreport:

FinancialInstitutionFraud-Knowingmisrepresentationofthetruthorconcealmentofamaterialfactbyapersontoinduceabusiness,organization,orotherentitythatmanagesmoney,credit,orcapital toperforma fraudulentactivity.2Credit/debit card fraud is an example that ranks amongthe most commonly reported offenses to IC3. Identitytheftalsofallsintothiscategory;casesclassifiedunderthisheading tend tobe thosewhere theperpetratorpossessesthecomplainant’struenameidentification(intheformofasocialsecuritycard,driver’slicense,orbirthcertificate),buttherehasnotbeenacreditordebitcardfraudcommitted.

Gaming Fraud - To risk something of value, especiallymoney, for a chance to win a prize when there is amisrepresentationoftheoddsorevents.3Sportstamperingandclaimingfalsebetsaretwoexamplesofgamingfraud.

CommunicationsFraud-Afraudulentactorprocess inwhichinformationisexchangedusingdifferentformsofmedia.Theftsofwireless,satellite,orlandlineservicesareexamplesofcommunicationsfraud.

UtilityFraud-Whenanindividualorcompanymisrepresentsorknowinglyintendstoharmbydefraudingagovernmentregulated entity thatperforms an essential public service,suchasthesupplyofwaterorelectricalservices.4

Insurance Fraud - A misrepresentation by the provideror the insured in the indemnity against loss. Insurancefraudincludesthe“padding”orinflatingofactualclaims,misrepresenting facts on an insurance application,submitting claims for injuries or damage that neveroccurred,and“staging”accidents.5

Government Fraud - A knowing misrepresentation ofthetruth,orconcealmentofamaterialfacttoinducethegovernment to act to its own detriment. Examples ofgovernmentfraudincludetaxevasion,welfarefraud,andcounterfeitcurrency.

Investment Fraud - Deceptive practices involving the useof capital to create more money, either through income-producing vehicles or throughmore risk-oriented venturesdesignedtoresultincapitalgains.7Ponzi/Pyramidschemesandmarketmanipulationaretwotypesofinvestmentfraud.

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2 appendix-1

Business Fraud - When a corporation or businessknowinglymisrepresentsthetruthorconcealsamaterialfact.8 Examples of business fraud include bankruptcyfraudandcopyrightinfringement.

ConfidenceFraud -The relianceon another’sdiscretionand/or a breach in a relationship of trust resulting infinancialloss.Aknowingmisrepresentationofthetruthorconcealmentofamaterialfacttoinduceanothertoacttohisorherdetriment.9Auctionfraudandnon-deliveryofpaymentormerchandisearebothtypesofconfidencefraud and are the most reported offenses to IC3. TheNigerian letter scam is another offense classified underconfidencefraud.

Credit/Debit Card Fraud – Any t unauthorized use ofa credit card with the purpose of obtaining anything ofvaluewiththeintenttodefraud.

CheckFraud -The forgery, alteration, counterfeiting,orknowingissuanceofacheckonanaccountthathasbeenclosedorhas insufficient funds to cover the amount forwhichthecheckwaswritten.

ComputerFraud-Inthebroadestsense,computercrimeisaviolationoflawinvolvingacomputer.Asdefinedbythe U.S. General Accounting Office, Office of SpecialInvestigations,computerscanbe“usedastoolstocommittraditionaloffenses.”Thismeansthatthefunctionsspecificto computers, such as software programs and Internetcapabilities, can be manipulated to conduct criminalactivity.This broad category of crime is often discussedintermsoftwosubcategories:“true”computercrimeandcomputer-relatedcrime.“True”computercrimerefers tothosecrimesthattargetthecontentofcomputeroperatingsystems,programs,ornetworks.

Identity Theft -Simply put, identity theft is the illegaluse of another person’s identifying information (suchas a name, birth date, social security and/or credit cardnumber),anditisoneofthefastestgrowingcrimesintheUnitedStates.

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Black’s Law Dictionary, Seventh Ed., 1999.Ibid.Ibid.Fraud Examiners Manual, Third Ed., Volume 1, 1998.Black’s Law Dictionary, Seventh Ed., 1999. The Merriam Webster Dictionary, Home and Office Ed., 1995.Barron’s Dictionary of Finance and Investment Terms, Fifth Ed., 1998.Black’s Law Dictionary, Seventh Ed., 1999.Ibid.

2.3.4.5.6.

7.8.9.


Nigerian Letter Fraud – Any scam that involves anunsolicited email message, purportedly from Nigeria oranotherAfricannation, inwhich the sender promises alargesumofmoneytotherecipient.Inreturntherecipientisaskedtopayanadvancefeeorprovideidentity,creditcardorbankaccountinformation.Subsequently,therecipientlosesallmoniestheyhaveentrustedtothesenderofthemessageandtheygetnothinginreturn.

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2 appendix-2

Best Practices to Prevent Internet CrimeInternetAuctionFraudPreventiontips:

Understand as much as possible about how Internetauctionswork,whatyourobligationsareasabuyer,andwhattheseller’sobligationsarebeforeyoubid.

Findoutwhatactionsthewebsitetakesifaproblemoccursandconsiderinsuringthetransactionandshipment.

Donotallowthesellerorbuyertoconvinceyoutoignoretherulesofa legitimateInternetauctionwebsiteorexittheauctionwebsitetocompleteatransaction.

Becautiousofsecondchanceoffersespeciallyunsolicitedemail offers where you are contacted after an auction islistedasclosed,ortheitemislistedassold,withanoffertopurchasethelisteditemallegedlybecausetheoriginalbuyerbackedoutofasale.Manytimesthesesecondchanceoffersarefraudulent.

Learn as much as possible about the seller, especially iftheonly informationyouhave isane-mailaddress.If itisabusiness,checktheBetterBusinessBureauwheretheseller/businessislocated.

Examinethefeedbackonthesellerandusecommonsense.Ifthesellerhasahistoryofnegativefeedback,thendonotdealwiththatparticularseller.

Determinewhatmethodofpaymentthesellerisaskingforandwherehe/sheisaskingtosendpayment.Usecautionwhenthemailingaddressisapostofficeboxnumber.

Be aware of the difference in laws governing auctionsbetweentheU.S.andothercountries.Ifaproblemoccurswith the auction transaction that has the seller in onecountryandabuyerinanother,itmightresultinadubiousoutcomeleavingyouemptyhanded.

Besuretoasktheselleraboutwhendeliverycanbeexpectedandwarranty/exchangeinformationformerchandisethatyoumightwanttoreturn.

Toavoidunexpectedcosts,findoutifshippinganddeliveryareincludedintheauctionpriceorareadditional.

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Avoidgivingout your social securitynumberordriver’slicensenumbertotheseller,asthesellershavenoneedforthisinformation.

Finally, practice an attitude of healthy skepticism. Ifsomethingsoundstoogoodtobetrue,itusuallyis.

Stepstotakeifvictimized:

Fileacomplaintwiththeonlineauctioncompany.Inorderto be considered for eBay’s Fraud Protection Program,you should submit an online Fraud Complaint 90 daysafter the listing end-date at (http://crs.ebay.com/aw-cgi/ebayisapi.dll?crsstartpage).

File a complaint with the Internet Crime ComplaintCenter(http://www.ic3.gov).

Contact law enforcement officials at the local and statelevel(yourlocalandstatepolicedepartments).

Alsocontactlawenforcementofficialsintheperpetrator’stownandstate.

FileacomplaintwiththeshipperUSPS,UPS,Fed-Ex,etc.

File a complaint with the National Fraud InformationCenter(http://www.fraud.org/info/contactnfic.htm).

FileacomplaintwiththeBetterBusinessBureau(http://(http://www.bbb.org).

Non-Delivery of MerchandisePreventiontips:

Makesureyouarepurchasingmerchandisefromareputablesource.Aswithauctionfraud,checkthereputationofthesellerwheneverpossible,includingtheBetterBusinessBureau.

Trytoobtainaphysicaladdressratherthanmerelyapostofficeboxandaphonenumber.Also,callthesellertoseeifthenumberiscorrectandworking.

Send them e-mail to see if they have an active e-mailaddress.Becautiousofsellerswhousefreee-mailserviceswhereacreditcardwasnotrequiredtoopentheaccount.

Investigateotherwebsitesregardingthisperson/company.

Do not judge a person/company by their fancy website;thoroughlycheckouttheperson/companyout.

Becautiouswhenrespondingtospecialoffers(especiallythroughunsolicitede-mail).

Be cautious when dealing with individuals/companiesfrom outside your own country. Remember the laws ofdifferent countriesmightpose issues if a problemariseswithyourtransaction.

Inquireaboutreturnsandwarrantiesonallitems.

The safest way to purchase items via the Internet is bycredit cardbecause you canoftendispute the charges ifsomething is wrong. Also, consider utilizing an escrow

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or alternate payment service, after conducting thoroughresearch on the escrow service. Many times fraudsterswantvictimstopayusingwiretransfersbecausetheycancollect and move the victim’s money before the victimlearnsofthefraud.

Make sure thewebsite is securewhenyouelectronicallysendyourcreditcardnumbers.

Credit Card FraudPreventiontips:

Don’t give out your credit card number(s) online unlessthe website is both secure and reputable. Sometimes atinyiconofapadlockappearstosymbolizeahigherlevelofsecuritytotransmitdata.Thisiconisnotaguaranteeofasecuresite,butmayprovideyousomeassurance.

Beforeusingasite,checkoutthesecuritysoftwareitusestomakesurethatyourinformationwillbeprotected.

Make sure you are purchasing merchandise from areputable/legitimate source. Once again investigate thepersonorcompanybeforepurchasinganyproducts.

Trytoobtainaphysicaladdressratherthanmerelyapostofficeboxandaphonenumber.Callthesellertoseeifthenumberiscorrectandworking.

Send them e-mail to see if they have an active e-mailaddressandbewaryofsellerswhousefreee-mailserviceswhereacreditcardwasnotrequiredtoopentheaccount.

Donotpurchase fromsellerswhorefuse toprovideyouwithverifiablecontactinformation.

CheckwiththeBetterBusinessBureautoseeiftherehavebeenanypriorcomplaintsagainsttheseller.

Checkoutotherwebsitesregardingthisperson/company.

Becautiouswhenrespondingtospecialoffers(especiallythroughunsolicitede-mail).

Be cautious when dealing with individuals/companiesfromoutsideyourowncountry.

IfyouaregoingtopurchaseanitemviatheInternet,usea credit card since you can often dispute the charges ifsomethingdoesgowrong.

Makesurethetransactionissecurewhenyouelectronicallysendyourcreditcardnumbers.

You should also keep a list of all your credit cards andaccount informationalongwith thecard issuer’s contactinformation.Ifanythinglookssuspiciousoryouloseyourcreditcard(s),contactthecardissuerimmediately.

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PreventiontipsforBusinesses:

Do not accept orders unless complete information isprovided (including full address and phone number).Requireaddressverificationforallofyourcreditcardorders.Requireanyonewhousesadifferentshippingaddressthantheirbillingaddresstosendafaxwiththeirsignatureandcreditcardnumberauthorizingthetransaction.

Beespeciallycarefulwithordersthatcomefromfreee-mailservices—thereisamuchhigherincidenceoffraudfromtheseservices.Manybusinesseswon’tevenacceptordersthatcomethroughthesefreee-mailaccountsanymore.Sendane-mailrequestingadditionalinformationbeforeyouprocesstheorder asking for: anon-free e-mail address, thenameandphonenumberofthebankthatissuedthecreditcard,theexactnameoncreditcard,andtheexactbillingaddress.

Bewaryofordersthatarelargerthanyourtypicalorderamountandorderswithnextdaydelivery.

Becautiousofbuyerswhousenumerouscreditcards topayforasingleorder,especiallyiftheorderisunusualinnatureorsize.Checkallthecreditcardstoverifythattheyallbelongtothesamepersonorbusiness.

Pay extra attention to international orders. Validate theorderbeforeyoushipyourproducttoadifferentcountry.

If you are suspicious, pick up the phone and call thecustomertoconfirmtheorder.

Consider using software or services to fight credit cardfraudonline.

Ifdefraudedbyacreditcardthief,youshouldcontactyourbankandtheauthorities.

Investment FraudPreventiontips:

Donotinvestinanythingbaseduponappearances.Justbecauseanindividualorcompanyhasaflashywebsitedoesn’tmeanitislegitimate.Websitescanbecreatedinjustafewdays.Afterashortperiodoftakingmoney,asitecanvanishwithoutatrace.

Do not invest in anything about which you are notabsolutelysure.Doyourhomeworkontheinvestmenttoensurethatitislegitimate.

Thoroughly investigate the individual or company toensurethattheyarelegitimate.

Checkoutotherwebsitesregardingthisperson/company.

Becautiouswhenrespondingtospecialinvestmentoffers(especially through unsolicited e-mail) by fast talkingtelemarketers.Knowwithwhomyouaredealingwith!

Inquire about all the terms and conditionsdealingwiththeinvestorsandtheinvestment.

RuleofThumb:Ifitsoundstoogoodtobetrue,itprobablyis.

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Nigerian Letter Scam/419 ScamPreventiontips:

BeskepticalofindividualsrepresentingthemselvesasNigerianorotherforeigngovernmentofficialsaskingforyourhelpinplacinglargesumsofmoneyinoverseasbankaccounts.

Donot believe thepromise of large sumsofmoney foryourcooperation.

Donotgiveoutanypersonalidentifyinginformationregardingyoursavings,checking,credit,orotherfinancialaccounts.

Ifyouaresolicited,donotrespondandquicklynotifytheappropriateauthorities.

Business FraudPreventiontips:

Purchase merchandise from reputable dealers orestablishments.

Trytoobtainaphysicaladdressratherthanmerelyapostofficeboxandaphonenumber,andcallthesellertoseeifthenumberiscorrectandworking.

Sendtheme-mailtoseeiftheyhaveanactivee-mailaddressandbewaryofthosethatutilizefreee-mailserviceswhereacreditcardwasn’trequiredtoopentheaccount.

Donotpurchasefromsellerswhowon’tprovideyouwiththistypeofinformation.

Purchase merchandise directly from the individual/company thatholds the trademark, copyright,orpatent.Beawareofcounterfeitandlook-alikeitems.

Bewarewhenrespondingtoe-mailthatmaynothavebeensent by a reputable company. Always investigate beforepurchasinganyproducts.

Identity TheftPreventiontips:

Checkyour credit reportsoncea year fromall threeof thecreditreportingagencies(Experian,Transunion,andEquifax).

GuardyourSocialSecuritynumber.Whenpossible,don’tcarryyourSocialSecuritycardwithyou.

Don’tputyourSocialSecurityNumberordriver’slicensenumberonyourchecks.

Guardyourpersonal information.Youshouldnevergiveyour Social Security number to anyone unless you canverifythattheyarerequiredtocollectit.

Carefullydestroypapersyoudiscard,especiallythosewithsensitiveoridentifyinginformationsuchasbankaccountandcreditcardstatements.

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Be suspicious of telephone solicitors. Never provideinformationunlessyouhaveinitiatedthecall.

Delete any suspicious e-mail requests without replying.Remember:Ifyourbankorcreditcardcompanyneedsyoutocontactthem,theyhavetelephonenumbersandwebsiteinformationonyourstatement.Youdonothavetoclickonunsolicitedemailstocontactthem.

Stepstotakeifvictimized:

Contact thefrauddepartmentsofeachof thethreemajorcreditbureausandreportthatyouridentityhasbeenstolen.

Geta“fraudalert”placedonyourfilesothatnonewcreditwillbegrantedwithoutyourapproval.

Contact the security departments of the appropriatecreditorsand/orfinancialinstitutionsforanyaccountsthatmayhavebeenfraudulentlyaccessed.Closetheseaccounts.Createnewpasswordsonanynewaccountsthatyouopen.

Fileareportwithyourlocalpoliceand/orthepolicewheretheidentitythefttookplace.

Retainacopyofthepolicereportbecauseitmaybeneededbythebank,creditcardcompany,orotherbusinessesasevidencethatyouridentitywasstolen.

CyberstalkingPreventiontips(fromW.H.O.A–WorkingtoHaltOnlineAbuseatwww.haltabuse.org):

Useagender-neutralusername/e-mailaddress.

Useafreee-mailaccountsuchasHotmail(www.hotmail.com)orYAHOO!(www.yahoo.com)fornewsgroups/mailinglists,chatrooms,Instantmessages(IMs),e-mailsfromstrangers,messageboards,fillingoutforms,andotheronlineactivities.

Don’tgiveyourprimarye-mailaddresstoanyoneyoudonotknowortrust.

Instructchildrentonevergiveouttheirrealname,age,address,orphonenumberovertheInternetwithoutyourpermission.

Don’tprovideyourcreditcardnumberorotherinformationas proof of age to access or subscribe to a website withwhichyouarenotfamiliarwith.

Monitor/observe newsgroups, mailing lists, and chatroomsbefore“speaking”orpostingmessages.

When you do participate online, be careful – only typewhatyouwouldsaytosomeone’sface.

Don’tbesotrustingonline–don’trevealpersonalthingsaboutyourselfuntilyoureallyandtrulyknowtheotherperson.

Yourfirstinstinctmaybetodefendyourself–Don’t–thisishowmostonlineharassmentsituationsbegin.

Ifitlookstoogoodtobetrue–itis.

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2 appendix-3

Complainant/Perpetrator Statistics, by StateComplainants by State

Rank State Percent Rank State Percent1 California 14.4 27 South Carolina 1.22 Florida 7.2 28 Louisiana 1.13 Texas 7.2 29 Connecticut 1.04 New York 5.7 30 Kentucky 1.05 Pennsylvania 3.6 31 Utah 1.06 Illinois 3.5 32 Oklahoma 0.97 Ohio 3.1 33 Kansas 0.88 Washington 3.1 34 Arkansas 0.89 New Jersey 3.1 35 Iowa 0.7

10 Virginia 2.9 36 New Mexico 0.611 Michigan 2.8 37 Idaho 0.512 Arizona 2.8 38 Mississippi 0.513 Georgia 2.6 39 West Virginia 0.514 Maryland 2.6 40 New Hampshire 0.515 North Carolina 2.6 41 Hawaii 0.516 Colorado 2.5 42 Nebraska 0.417 Indiana 2.0 43 Maine 0.418 Massachusetts 2.0 44 Montana 0.319 Missouri 1.9 45 Rhode Island 0.320 Tennessee 1.8 46 District of

Columbia0.3

21 Oregon 1.7 47 Delaware 0.322 Wisconsin 1.6 48 Vermont 0.223 Minnesota 1.6 49 Wyoming 0.224 Alaska 1.4 50 South Dakota 0.225 Alabama 1.2 51 North Dakota 0.126 Nevada 1.2

Table 6 - Represents Percentage of total individual complainants within the United States where state is known

(Please note that percentages contained in the table above may not add up to 100%. The table above only represents statistics from 50 states and the District of Columbia. The table above does not represent statistics from other U.S. territories or Canada.)

22 | InternetCrimeComplaintCenter-appendix 2007InTerneTCrImereporT-appendIx | 2�

Complainant/Perpetrator Statistics, by State (Continued)Perpetrators by State

Rank State Percent Rank State Percent1 California 15.8 27 Connecticut 1.02 Florida 10.1 28 Kentucky 1.03 New York 9.9 29 South Carolina 0.94 Texas 7.0 30 Oklahoma 0.85 Illinois 3.6 31 District of

Columbia0.8

6 Pennsylvania 3.5 32 Louisiana 0.77 Georgia 3.1 33 Kansas 0.78 Ohio 2.8 34 Maine 0.59 Washington 2.8 35 Iowa 0.5

10 New Jersey 2.8 36 Nebraska 0.511 Michigan 2.5 37 Arkansas 0.512 Arizona 2.4 38 Delaware 0.513 Nevada 2.3 39 New Hampshire 0.414 North Carolina 2.0 40 Rhode Island 0.415 Virginia 1.9 41 New Mexico 0.416 Indiana 1.7 42 Mississippi 0.417 Colorado 1.7 43 Idaho 0.318 Maryland 1.7 44 West Virginia 0.319 Massachusetts 1.6 45 Montana 0.320 Missouri 1.5 46 Hawaii 0.321 Tennessee 1.4 47 Alaska 0.322 Utah 1.3 48 Wyoming 0.223 Wisconsin 1.2 49 Vermont 0.224 Minnesota 1.2 50 South Dakota 0.225 Alabama 1.2 51 North Dakota 0.126 Oregon 1.1

Table 7 - Represents percentage of total individual perpetrators within the United States (where state is known)

(Please note that percentages contained in the table above may not add up to 100%. The table above only represents statistics from 50 states and the District of Columbia. The table above does not represent statistics from other U.S. territories or Canada.)


Complainant/Perpetrator Statistics, by State (Continued)Complainants per 100,000 people

Rank State Per 1,000 Rank State Per 1,0001 Alaska 356.41 27 Connecticut 53.482 Colorado 90.65 28 Minnesota 53.353 Washington 86.76 29 New York 52.744 Maryland 83.39 30 Pennsylvania 52.235 Nevada 81.90 31 Tennessee 51.116 Oregon 79.41 32 Kansas 51.087 Arizona 78.58 33 North Carolina 51.048 District of

Columbia78.19 34 Delaware 50.88

9 Florida 71.18 35 Rhode Island 50.5810 California 70.87 36 West Virginia 50.3911 Virginia 68.33 37 Wisconsin 49.8112 Utah 66.46 38 Michigan 49.7113 New Hampshire 65.66 39 Georgia 49.3614 Wyoming 65.03 40 Illinois 48.3515 New Jersey 63.94 41 Arkansas 47.7616 Idaho 63.23 42 South Carolina 47.5517 Hawaii 63.11 43 Alabama 46.5018 Ohio 62.24 44 Louisiana 45.9119 Montana 59.51 45 Nebraska 44.0120 Vermont 58.02 46 Oklahoma 43.0421 Missouri 57.60 47 Kentucky 42.8622 Maine 56.10 48 Iowa 42.7623 Indiana 55.33 49 South Dakota 37.3024 Massachusetts 54.25 50 North Dakota 35.1725 Texas 54.04 51 Mississippi 32.1026 New Mexico 53.56



Complainant/Perpetrator Statistics, by State (Continued)Perpetrators per 100,000 people

Rank State Per 1,000 Rank State Per 1,0001 District of

Columbia99.10 27 Massachusetts 19.66

2 Nevada 65.45 28 Missouri 19.243 Delaware 41.98 29 Indiana 19.054 Florida 40.73 30 Alabama 18.995 New York 38.06 31 Hawaii 18.866 Utah 36.40 32 Virginia 18.457 Washington 31.96 33 Kansas 18.198 California 31.87 34 Michigan 18.129 Alaska 28.53 35 Ohio 18.09

10 Rhode Island 28.45 36 Tennessee 17.2511 Arizona 27.99 37 Kentucky 17.2312 Maine 27.63 38 Minnesota 16.9513 Colorado 25.84 39 North Carolina 16.5414 Montana 25.16 40 South Carolina 15.7915 Georgia 24.25 41 Oklahoma 15.7916 New Jersey 23.44 42 Idaho 15.6717 Vermont 22.86 43 Wisconsin 15.3718 Maryland 21.64 44 North Dakota 15.1619 Texas 21.53 45 New Mexico 14.6720 Oregon 21.43 46 South Dakota 13.5621 Pennsylvania 20.94 47 Arkansas 11.9222 New Hampshire 20.90 48 West Virginia 11.9223 Wyoming 20.85 49 Louisiana 11.6724 Illinois 20.70 50 Iowa 11.5825 Connecticut 20.39 51 Mississippi 8.7726 Nebraska 20.17


Electronic Law Enforcement: Introduction to Investigations in an Electronic Environment. (2001). Washington, DC: U.S. General Accounting Office, Office of Special Investigations.

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2007 Internet Crime Report

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