FBI reports Internet fraud complaints tripled in 2002
Fraud on the Internet rose sharply in 2002, with the FBI reporting more than 48,000 complaints referred to prosecutors -- triple the number of the year before.
By far the most common complaint was auction fraud, followed by non-delivery of promised merchandise, credit card fraud and fake investments, according to the report Wednesday from Internet Fraud Complaint Center, run by the FBI and the National White Collar Crime Center based in Richmond, Va.
The total dollar loss of Internet fraud reported to the center in 2002 was $54 million, compared with $17 million the year before. The 48,252 complaints referred for prosecution were far more than the 16,755 such complaints referred in 2001, but they still represent only a fraction of the crimes authorities believe are occurring.
The center also received almost 37,000 other complaints in 2002 that did not constitute fraud but involved such things as unsolicited e-mail or SPAM, illegal child pornography and computer intrusions.
As more people do business on the Internet, fraud is expected to continue to increase, officials said. They also said the rise in complaints could stem from greater awareness of the Internet fraud center as a site for victims to fight back.
The center "helps victims by putting fraud information into the hands of law enforcement ... so these complaints are responded to quickly," said Jana Monroe, assistant FBI director in charge of the Cyber Division.
The report provides a glimpse into common types of fraud, its perpetrators and victims. For instance, almost 80 percent of known perpetrators are male and about 71 percent of those bringing complaints are also male.
Fraud complaints came from all over the United States, with a third filed in highly-populated California, Florida, Texas and New York. Complaints also came from Canada, Australia, Britain, Germany and Japan.
While online auction fraud accounted for 46 percent of complaints, the average amount lost in these cases was just $320. By comparison, victims of Internet identity theft averaged $2,000 in losses, with check fraud losses averaging $1,000.
One persistent scam described in the report is the so-called "Nigerian letter," complaints for which rose from 2,600 in 2001 to 16,000 in 2002. Victims are presented with an opportunity to receive nonexistent government money, often from the "Government of Nigeria," as long as they pay an upfront fee often characterized as a bribe to that government.
The report did not include statistics on how many complaints received by the Internet fraud center resulted in criminal convictions last year, but it did detail high-profile examples.
One case involved $800,000 in losses by 300 people in a scheme to sell computers online and never deliver the merchandise. The perpetrator in this case, Teresa Smith of Worcester, Mass., used several identities to prevent authorities from catching her.
Smith pleaded guilty in December to federal mail fraud and wire fraud charges and is awaiting sentencing.
In California, Raj Trivedi of San Diego pleaded guilty in December to a 96-count federal indictment and was sentenced to three years in prison for using the Internet to peddle computers, camcorders and other electronic gear but delivering none of the goods. More than 700 people worldwide were swindled of some $922,000 in that case.
Cybercrime News Archive