Russia: Citybank clients scammed
Date: May 20, 2004Source: Computer Crime Research Center
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CityBank ranks 11th by equity capital (8,96 billion of RUR [about $300 million]), 13th by capital employed (57,79 billion of RUR [about $2 billion]) among Russian banks. It ranks 35th among retail banks and it attracted 3,6 billion RUR of deposits (about $120m).
Yesterday CityBank released and distributed a letter signed by chairman Allan Herst saying CityBank was not implicated in e-fraud.
"These messages to bank's clients were sent by scammers", bank warns in its announcement, "CityBank never uses e-mail to receive confidential information from its clients". There are tens of thousands of credit card holders, letters were sent not only to CityBank clients and these people might have been tricked too though.
It is hard to estimate the scale of this fraud. Mass distribution, allegedly on behalf of CityBank, has been lasting for at least three months, bank employees receive these mails since winter. There are no cases of registered losses of their clients yet, according to the certain data, some card holders did input their data at that site though.
Two weeks ago police have arrested a dozen Eastern European men and women on suspicion of defrauding UK online bank customers out of hundreds of thousands of pounds and diverting the money to a Russian crime gang.
It was the second major arrest by the National Hi-Tech Crime Unit in as many weeks for a relatively new Internet scam known as "phishing", estimated to have cost banks 60 million pounds last year.
Some of the largest retail banks in the world, including Barclays, Lloyds TSB and NatWest in the UK, have been hit by the scam in which spoofed e-mails and websites are used to trick online customers out of their bank and credit card details.
"We believe this gang has sent hundreds of thousands of pounds back to Russia," said Detective Superintendent Mick Deats of the National Hi-Tech Crime Unit.
Police say the gang had targeted many high street and Internet banks, and that because they were unable to break into the banks' systems themselves, they had resorted to duping account holders into parting with their details.
Police have long suspected the phishing scams were the work of organised crime gangs operating out of Eastern Europe. In most cases, the scammers create elaborate e-mails masquerading as official notices from a bank saying their accounts need to be updated.
A link is provided in the e-mail to an official-looking website where the customer is instructed to input account details and credit card numbers.
Police began investigating the latest suspects last autumn. They are still being questioned and no charges have been yet been laid.
Police described the suspects, whom they declined to name, as "mules" recruited by a single Russian organised crime gang to move the money out of a targeted country. Globally, the phishing crime wave has claimed victims in North America and Australia.
The suspects -- Estonian, Latvian, Russian and Ukrainian nationals -- were arrested in a variety of London boroughs and in Ramsgate, Kent, police said.
Also seized were computers and other electronic media, passports, cheque books and bank cards, money and crack cocaine.
In an unrelated case, a 21-year-old British man was arrested a week ago in an alleged scam to defraud customers of Smile, an online bank run by The Co-Operative Bank.
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