Fraud

 Fraud involves deceptive practices with the intention of gaining something of value, often financial, from a victim.

Fraud MO Variables

Objectives and Motivation:

• Financial Gain: The primary motive is almost always monetary. Fraudsters aim to secure money, goods, or services through deception.

• Non-Monetary Benefits: Sometimes, the objective may not be direct financial gain but other advantages, such as obtaining sensitive information or gaining unauthorized access.

Planning and Target Selection:

• Victim Profiling: Criminals often select targets based on vulnerability, such as the elderly, or based on the likelihood of success.

• Information Gathering: Collecting details about the target, which may include personal, financial, or business-related information.

Types of Schemes:

• Advance Fee Schemes: Requiring payment upfront with the promise of larger financial returns.

• Ponzi Schemes: Using capital from new investors to pay off earlier investors.

• False Representation: Providing misleading or incorrect information to deceive targets.

• Impersonation: Posing as a trustworthy entity or person to gain confidence.

Tools and Techniques:

• Document Forgery: Creating or modifying documents to support fraudulent claims.

• Technology-Aided Techniques: Use of phishing emails, malware, or hacking to aid in the fraud.

• Communication Channels: Utilizing phone calls, mail, emails, or face-to-face meetings for deceit.

Execution:

• Illegal Transactions: Carrying out transactions that result in the transfer of funds or assets from the victim to the fraudster.

• Deception and Manipulation: Employing psychological tactics to manipulate the victim into performing certain actions beneficial to the criminal.

Intermediaries:

• Money Mules: Individuals used for transferring money acquired through illegal means, knowingly or unknowingly.

• Accomplices: Other participants who may aid in various capacities, such as information gathering or asset transfer.

Evasion Techniques:

• Altering Digital Trails: Deleting or modifying digital records to avoid detection.

• Use of Shell Companies: Employing legal entities to mask the true nature and ownership of fraudulent activities.

• Jurisdiction Hopping: Operating across multiple jurisdictions to make legal pursuit more difficult.

Post-Offense Activities:

• Money Laundering: Attempting to legitimize the illegally obtained money through various transactions.

• Cover-Up and Exit Strategies: Taking steps to wind down the fraudulent operation while minimizing the risk of detection or capture.

Example Fraud Types

Adoption Fraud: This includes any illegal action or false representation to make a profit within the process of adoption.

Advance Fee Fraud: This is a scam where victims pay someone in anticipation of receiving something of greater value, such as a loan, contract, investment, or gift, and then receive little or nothing in return.

Auction Fraud: This involves fraudulent activities in online auctions, such as non-delivery of purchased items, misrepresentation of products, or fake bidding to inflate prices.

Bait-and-Switch: This is a form of fraud in which a seller advertises a product with the intent of substituting it with another, more expensive product.

Bank Fraud: This can involve posing as a bank in emails or phone calls to get people to reveal their account details (known as phishing), or fraudulent activities targeting the bank itself.

Benefit Fraud: This involves falsely claiming government benefits by providing false information.

Business Email Compromise (BEC) Fraud: Also known as CEO fraud or email spoofing, this involves cybercriminals impersonating high-ranking executives or employees to deceive individuals or organizations into making wire transfers or disclosing sensitive information.

Charity Fraud: This involves individuals or groups posing as charities to solicit money or personal information from well-meaning donors.

Check Fraud: This includes forging, altering, or creating counterfeit checks.

Click Fraud: This involves generating fraudulent clicks on paid digital advertisements to increase revenue or deplete a competitor's advertising budget.

Corporate Fraud: This encompasses a range of fraudulent behaviors by executives or corporations, often with the intent to manipulate stock prices.

Counterfeit Coupons: The creation and use of counterfeit coupons to receive discounts or free products.

Credit Card Fraud: This involves the unauthorized use of a credit or debit card to fraudulently obtain money or property.

Crowdfunding Fraud: When someone creates a fake story to get donations from the public on crowdfunding platforms.

Cryptocurrency Fraud: This involves fraudulent activities within the realm of cryptocurrencies, such as investment scams, fake initial coin offerings (ICOs), Ponzi schemes, or hacking and theft of digital wallets.

Elder Fraud: This involves fraud schemes specifically targeted towards older adults, who may be more vulnerable. This could include scams around estate planning, prescription drugs, or fraudulent investment schemes.

Embezzlement: This is a type of financial fraud that occurs when someone who is trusted with managing the assets of other individuals or entities steals them.

Employment or Work-at-Home Scams: This includes false jobs or businesses that require payment upfront but provide no actual employment or income.

Fake Check Scams: Scammers send victims a fake check and convince them to send money back before the check bounces.

Fake Diploma Scams: Selling fake degrees, certificates, or diplomas, often tied to "diploma mills" that offer degrees with little or no study or exams.

Financial Investment Fraud: This includes fraudulent schemes related to investments, such as offering false promises of high returns, promoting nonexistent or worthless investment opportunities, or engaging in insider trading.

Forgery: This involves the creation, alteration, or imitation of objects, statistics, or documents with the intent to deceive.

Fraudulent Conveyance: The act of transferring property with the intention to defraud a creditor.

Fraudulent Coupons: The creation and use of counterfeit coupons to receive discounts or free products.

Funeral and Cemetery Fraud: Scams that prey on grieving families, including high-pressure sales tactics, selling unnecessary services, or overcharging for services.

Gift Card Fraud: Using stolen or counterfeit gift cards or using stolen credit card information to purchase gift cards, which are then sold for cash.

Government Identity Fraud: This involves the fraudulent use of someone's identity to obtain government benefits, documents, or services.

Healthcare Fraud: This can involve providers who bill for services they haven't provided, or patients who file false claims with insurance providers.

Home Rental Fraud: Scammers pose as landlords or property managers to fraudulently collect rental payments or deposits for properties they do not own or have authority over

Identity Theft: This occurs when someone uses another person's private identifying information, usually for financial gain.

Impersonation Fraud: The act of assuming the identity of another person with intent to defraud.

Intellectual Property Fraud: This includes the illegal use of someone else's intellectual property, such as inventions, trademarks, or copyrighted works, for personal gain.

Insurance Fraud: This involves false or exaggerated claims made to get a larger insurance payout.

Internet Fraud: This includes a range of fraudulent activities conducted online, such as scams conducted via email (like the infamous "Nigerian Prince" scam), fraudulent online auctions, or sales on websites or apps.

Invoice Fraud: This involves sending an invoice or bill to a company, hoping they'll mistake it for a legitimate bill and pay it.

Job Scams: These involve fraudulent job offers or recruitment efforts aimed at deceiving individuals into providing personal information, paying fees, or performing unpaid work.

Loan Fraud: This involves falsifying information to receive a loan.

Lottery or Sweepstakes Fraud: This involves asking individuals to pay a fee to claim a fictitious lottery or sweepstakes win.

Lot Fraud: This includes activities like price tag switching, return fraud, or shoplifting.

Mail Fraud: This involves the use of postal services to commit a crime of deceit, fraud, or misrepresentation.

Mobile Payment Fraud: This encompasses fraudulent activities involving mobile payment platforms, such as unauthorized transactions, account takeover, or phishing scams targeting mobile payment users.

Money Mule Schemes: The use of unsuspecting victims to transfer stolen money between different accounts, often in different countries, on behalf of the fraudster.

Online Dating Scams: Fraudsters create fake profiles on dating websites or apps to develop emotional connections with victims and then exploit them for financial gain, often through requests for money or gifts.

Payroll Fraud: This involves manipulating payroll processes to fraudulently divert funds or inflate compensation, such as creating ghost employees or falsifying work hours.

Phantom Debt Fraud: Attempting to collect on a debt that doesn't exist or isn't owed.

Pharmacy Fraud: This involves counterfeit prescription drugs, illegal online pharmacies, or healthcare providers who fraudulently bill insurance for drugs.

Ponzi Schemes: This is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

Prescription Fraud: Either forging or altering prescriptions, obtaining multiple prescriptions from different doctors for the same drug (doctor shopping), or illegal internet pharmacies selling prescription drugs without requiring a valid prescription.

Prize Scams: Scams where victims are told they have won a prize, lottery, or sweepstake but must first pay a fee or provide personal information to claim it.

Pump and Dump Stock Fraud: Fraudsters artificially inflate the price of a stock they own (the pump), then sell it off when other investors buy-in (the dump), causing the price to collapse and the other investors to lose their money.

Pyramid Schemes: These business models are unsustainable and often illegal. They require an initial investment from a number of investors, then promise the profits will come from recruiting others to invest.

Real Estate and Mortgage Fraud: This can include false information on mortgage applications, illegal property flipping, or fraudulent foreclosure transactions.

Return Fraud: This occurs when a person defrauds a retail store via the return process, such as returning stolen merchandise, wardrobing (returning used clothes), or receipt fraud.

Retail Fraud: This includes activities like price tag switching, return fraud, or shoplifting.

Romance Scams: These involve tricking someone into a fake romantic relationship and then exploiting that relationship to get money, gifts, or sensitive information.

Rogue Traders: Individuals or groups who misrepresent themselves as investment professionals to swindle investors.

Securities Fraud: Also known as stock or investment fraud, this includes manipulations of the financial markets and stealing from investors through deceit.

Service Member Scams: Scams that specifically target military personnel or their families.

Tax Fraud: This involves the intentional falsification of information on tax returns to limit tax liability.

Tech Support Scams: Scammers trick people into believing they have a serious problem with their computer to provide fraudulent service.

Telemarketing Fraud: This involves deceptive sales calls to customers, often with high-pressure or misleading tactics.

Ticket Fraud: This includes the sale of fake or nonexistent tickets for events, flights, or concerts.

Timeshare Fraud: This involves fraudulent practices related to the sale, resale, or management of timeshares, including false promises of low costs or high returns.

Travel Scams: Scammers may create fake travel agencies or websites to trick customers into paying for booking services that don't exist.

Vehicle Odometer Fraud: Illegally rolling back or altering the odometer reading on a vehicle to make it appear to have a lower total mileage.

Vehicle Purchase Fraud: This includes fraudulent activities related to the buying or selling of vehicles, such as selling stolen or counterfeit cars, misrepresenting vehicle condition or history, or engaging in title washing to conceal a vehicle's true history.

Wedding Scams: Fraudsters pose as vendors and trick couples into paying for services that don't exist or aren't delivered.

Wire Fraud: Like mail fraud but involves electronic communications of any sort.