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Scam artists use new technology

(By Edward Iwata, USA TODAY)

LAS VEGAS As war and terrorism preoccupy the nation, scam artists quietly continue to devise clever ways to rip off consumers and companies. "Fraud is everywhere, and it is getting much worse," says Jim Baker, a former homicide investigator with the Dallas Police Department and now the head of Baker Technologies, an investigative firm in Rowlett, Texas.

Last year, U.S. companies lost $600 billion to fraud a 50% jump from $400 billion in 1996, according to the Association of Certified Fraud Examiners, a worldwide group of fraud investigators and auditors.

The Internet, new software, wireless and other computer technology ensure the rapid spread of new scams.

And the scams will be hard to slow, with the public and law enforcement still more concerned about street crimes than financial wrongdoing, Baker warns.

White-collar crimes that appear to be spreading:

- Casino scams. Strengthened security has snuffed many gambling-related scams in recent years, but sharp con artists keep ripping off casinos nationwide for hundreds of millions of dollars. A large casino loses several million dollars a year to fraud by employees alone, estimates Derk Boss, vice president of surveillance at the Stratosphere Hotel-Casino & Tower here.

One hot scam involves promotional cards that casinos use to lure gamblers.

If a customer repeatedly uses a casino's slot machines, for instance, he can build up card points and earn cash rebates or free meals and hotel rooms.

Dishonest casino employees will log onto computers at work and add points to the accounts of friends and family members, Boss says.

Or con artists, using fake names, will insert 80 or 90 cards into slot machines and video poker games to accumulate points.

- "Smart" card schemes. High-tech thieves already are scheming to exploit smart cards, the new credit and debit cards embedded with computer chips that hold customer information. In Europe, where financial firms are the first to roll out millions of smart cards, crime rings and computer hackers are believed to be stealing the cards from the mail.

"They're getting their hands on cards to test new schemes and circumvent the (technology)," says Wesley Wilhelm, manager of fraud analytics at Fair Isaac, a fraud-prevention firm in San Diego.

- Bank fraud. FBI investigations of bank fraud in Chicago rose last year to 354 cases from 77 in 2001, when many FBI agents were diverted to investigate terrorism. FBI agents in Chicago are handling more cases involving theft of $250,000 or more, including more $1 million cases, says FBI assistant special agent Joseph Ways.

They're also seeing more crooks use new off-the-shelf software and printers to make realistic-looking counterfeit checks, Ways says.

White-collar crooks are like cockroaches, Baker said, speaking at a recent training workshop here of the Association of Certified Fraud Examiners.

"You can spray one house, but they just go down the street and hit another home," he said.

Source: www.usatoday.com



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