Cyber Crimes Investigator Chris Duque – a 30-year veteran of the Honolulu Police Department and now with the White Collar Crime Section at the City & County of Honolulu Department of the Prosecuting Attorney – shared what he has seen as he continues to focus on investigations through social media.
For example, sites such as eBay may be used as a fencing operation. The challenge is finding the person who actually committed the crime. In addition to tracking electronic footprints to find the people behind the user name, social media used in combination with what the criminal investigator knows about certain associates can be used as a tool to determine connections among various people.
Thus, real life crimes can be traced in the virtual world, then brought back to real life, leading to real prosecutions. For those in law enforcement, subpoenas can be used to find the actual people behind user IDs. Mr. Duque noted that the subpoena should not only include the person using the account, but also who is paying the bill. He noted that because technology allows multiple logins into the same account from various devices, one should be cautious about concluding who is actually posting information at specific times.
To keep up with Chris Duque’s ongoing activities, follow him online at:
At our luncheon on September 19, Lt. John McCarthy gave attendees an update on Financial Crime Trends that he has seen this year. Some examples were:
- Green Dot cards: A type of advance payment scheme in which victims receive what appears to be an award check. However, prior to receiving the award, victims are told that they must pay “processing fees” by placing money on a Green Dot MoneyPak, a type of prepaid money card. Once the money is on the card, the victim is instructed to tell the scammer the access code, which the scammer then uses to drain the MoneyPak. This allows scammers to bypass traditional cash-wiring companies.
- Credit card skimming on a global scale: One of the largest financial crimes in Honolulu started with credit cards originally skimmed in Florida, sold to a group in Russia, and ultimately used by a group in Honolulu. Within four days, scammers racked up $500,000 in purchases at high-end retailers. The suspects were arrested and charged with 24 crimes in Hawaii, New York, Florida and other states on the West Coast.
- Account takeovers: Usually the result of phishing, spyware or malware scams, an account takeover is the unauthorized use of a legitimate account that results in a loss of funds. Recently, Home Equity Line of Credit (HELOC) accounts have been commonly targeted in this scheme. In one example, a Capital One HELOC account was taken over when a signature block stored on a stolen cell phone was used to gain access to the account. Spear phishing, where malware on victims’ computers record key strokes, is another common method of gaining online access to accounts.
- Metadata on Facebook: We all leave footprints on the Web when we use social media. Third-party software can extract metadata from pictures posted on sites such as Facebook to determine when or where a photo was taken and who took it, which can then be related to others in the area who took photos at the same time.
- Bitcoin and Silk Road: Bitcoin is an Internet currency independent of any central authority. Bitcoins can be transferred through a computer or smartphone without an intermediate financial institution and used around the world. This has made it a handy tool for illegal purchases (such as drugs or guns) on online black markets such as Silk Road. Transactions were anonymous and there was no way to trace or record their identities. Silk Road was shut down by the FBI on October 2, 2013.
Aloha Termite owner Shawn Murray gave our luncheon attendees a rare public discussion from a victim of fraud. His former office manager, JoAnn Rodrigues, a longtime friend and his son’s godmother, stole close to $1 million over a three-year period. Murray nearly lost his company, filed for bankruptcy, reduced his staff and cut pay for remaining employees. Since then Murray’s wife has been in charge of the company books.
His continuing challenge is his desire to trust his employees, while acknowledging that there is a need for additional controls. Our members provided him with valuable advice about protecting his interests so as to better provide for his employees over the long term. In addition, he was reminded that controls exist to help his employees make the right decisions. Murray noted that he did not expect to have any takeaways from making this speech, but was excited about writing down some of the ideas he was given.
We were honored to have two guests at our previous luncheon: City & County of Honolulu Prosecuting Attorney Keith Kaneshiro, and Scott Spallina, Supervisor of the Elder Abuse Justice Unit. Attorney Kaneshiro noted some of the reasons the elderly are victimized:
- Many are homeowners
- They are often lonely
- They have predictable habits regarding paychecks and spending
- Are trusting
- Many are physically or mentally handicapped.
Perpetrators include not only contractors who target the elderly by not doing work they were paid to do, but also family members. For more information, check out this website: http://elderjusticehonolulu.com/
At our March luncheon, we welcomed IRS Special Agent Derek Tubania, who shared examples of cases he has worked on, including techniques used to discover and investigate fraud. He graduated from the University of Hawaii and has been an IRS Special Agent for 20 years. While he has focused mainly on income tax cases, he also shared his experiences in cases involving money laundering and structuring cases.
Our January luncheon featured Bill Kauppila, who talked about Fraud and Forensic Accounting. An adjunct professor at Chaminade University, he teaches Forensic Accounting & Fraud during the winter quarter (January to March). He spends the rest of the year in Seattle, Washington, where he teaches at Seattle Pacific University and maintains a personal consulting practice. He has been in the auditing profession since 1968.