U.S. Justice Dept. Seizes $3.7M in Online Scam Crackdown

The Justice Department busted an international crime ring that used online scams and hacking to steal money from consumer accounts across the country.

Using "money mule" schemes, these criminals moved stolen funds across various states and countries to avoid detection.

The illegal activities included lottery scams, unemployment insurance fraud, and computer hacking. The department seized over $3.7 million, and more than 2,300 money mules were identified during the two-month operation. 

Scammers and their partners frequently conceal unauthorized charges through the use of "microtransactions" or "microdebits." These involve grouping the illicit charges with numerous small, insignificant transactions to decrease the scammer's rate of chargebacks. A chargeback occurs when a transaction is rejected or reversed by the bank of the person holding the account. Since a high rate of chargebacks can trigger an investigation or even closure of the account, employing microtransactions to artificially lower this rate helps to disguise the true nature of the fraudulent activity.

“These cases mark an important step in the department’s efforts to halt schemes that prey upon individuals and small businesses across the United States,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to using all of the tools at its disposal to prevent fraudsters from reaching into victims’ bank accounts and stealing their hard-earned savings.”

Our Opinion:

Ensuring the integrity of financial services is crucial for the economy. By cracking down on networks that engage in fraudulent activities, the Justice Department is upholding the integrity of the banking system and alternative financing industry.

Alternative Lenders will have to carefully weigh their operations and ensure total compliance, at the same time evaluating any potential risks they might face due to any unfortunate misidentification.

Our Secretary of State API can Automate Data Verification For Better Fraud Detection

Underwriters can use Cobalt Intelligence’s API to access detailed business information such as company registration details, operational status, and historical data. This helps in verifying the legitimacy and stability of a business, which is a crucial step in the underwriting process.

Our API can provide insights to potential risks associated with a business, including financial stability, compliance history, and any red flags indicating irregularities or inconsistencies. This information is vital for assessing the level of risk involved in funding a particular business.

Headlines You Don’t Want to Miss

LendingTree Reveals Nearly 60% of US Credit Cardholders Are Living Paycheck to Paycheck Despite the economic impacts of the COVID-19 pandemic improving. Approximately one in five credit cardholders nearing their credit limit consider their card a financial lifeline. The survey found a link between financial stress and psychological health.

U.S. SEC Charges Tingo Inc and Its Major Stakeholders Over Securities Fraud CEO Dozy Mmobuosi, presented false and misleading statements to investors about the business' financial health and prospects. Tingo Inc, a US-based Nigerian agricultural firm, was purportedly unruly in giving manipulative statements regarding operations, assets, revenue, and the status of partnerships. The SEC further alleged that the company falsely claimed to be a livestock and agricultural business with substantial assets and revenues. Additionally, they indicated that investors were misled about the company's potential listing on the NASDAQ stock exchange.

Possible recession in 2024 despite strong economic readings coming from the United States Constance Hunter, Chief Economist at KPMG, explains that despite robust economic readings, a cyclical slowdown could lead to a U.S. recession by 2024, given the historical data. The assumptions revolve around the duration of the business cycle, which averages around 4.7 years. Additionally, the stimulus package's temporary effects and the impending interest rate hikes by the Federal Reserve are other factors that might trigger such an economic slowdown.

Apex Fintech's move towards an IPO Apex Fintech Solutions, a technology-driven financial services company, has filed a public draft registration statement with the U.S. SEC as a precursor to an IPO. The details of the IPO, such as the number of shares to be offered and the price range, have not yet been determined.

Buy Now, Pay Later: Klarna CEO Calls for Regulatory Adaptation amidst Rapid Industry Growth Klarna CEO argued that BNPL services are not inherently risky, rather they are as safe as other traditional financial services. The important aspect is responsible lending and maintaining good standards. Siemiatkowski, admitted that there might be a small portion of users who misuse these services and end up in debt, but this is not a reflection on the entire industry. He shared apprehensions about industry growth outpacing regulation, and advocated for the need for relevant regulations to protect consumers.