Thursday, March 09, 2006
$50 Million Ponzi Scheme Gets Shut Down
Some BankersOnline users have mentioned "12DailyPro" in the threads in Operations and elsewhere under Stormpay Pyramid schemes. The SEC alleged that Charis Johnson raised more than $50 million from more than 300,000 investors. He convinced them that they could earn a 44 percent return on their investments in 12 days by looking at internet advertisements.
Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme in the 1920s. These work on a pyramid basis and new funds are required to pay old investors.
Caught Skimming
In San Antonio, TX federal grand jury indicted Shadi Ismail Mohamed Banihani, a former Houston gas station employee, and Samer Mohamed Al-Khatib, on charges of conspiring to possess and use unauthorized ATM cards. It is believed Banihani captured customer information using a skimming machine at the Houston gas station where he worked and shoulder surfed to get the PINs or got them from the customers themselves. A Texas Department of Public Safety trooper conducted a traffic stop and found $85,000 in the car with 254 ATM and various receipts. The extent of the crime is not yet known.
In a related note, CitiBank imposed transaction blocks on PIN initiated transactions on some of its cards. Suspicious transactions were seen in the UK, Russia and Canada after a U.S. retailer suffered a security breach.
There appeared to be a media blackout in the U.S. on this story. But a CitiBank customer reported problems on a blog entry and that fueled wild speculation that their ATM network had been compromised. CitiBank has since released a statement which stated "Recently, we became aware of fraudulent ATM cash withdrawals on Citi-branded MasterCard credit and debit cards used in three countries on customer accounts that had been possibly compromised in previous retailer breaches in the US." "To protect customer accounts that were affected, we placed a special transaction block in those three countries on PIN based transactions. We are currently reissuing cards, as appropriate, to affected customers."
CitiBank took action to protect the deposits of their customers, but neglected the public relations side of the issue. This is truly a global economy with global communication capabilities.
Some BankersOnline users have mentioned "12DailyPro" in the threads in Operations and elsewhere under Stormpay Pyramid schemes. The SEC alleged that Charis Johnson raised more than $50 million from more than 300,000 investors. He convinced them that they could earn a 44 percent return on their investments in 12 days by looking at internet advertisements.
Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme in the 1920s. These work on a pyramid basis and new funds are required to pay old investors.
Caught Skimming
In San Antonio, TX federal grand jury indicted Shadi Ismail Mohamed Banihani, a former Houston gas station employee, and Samer Mohamed Al-Khatib, on charges of conspiring to possess and use unauthorized ATM cards. It is believed Banihani captured customer information using a skimming machine at the Houston gas station where he worked and shoulder surfed to get the PINs or got them from the customers themselves. A Texas Department of Public Safety trooper conducted a traffic stop and found $85,000 in the car with 254 ATM and various receipts. The extent of the crime is not yet known.
In a related note, CitiBank imposed transaction blocks on PIN initiated transactions on some of its cards. Suspicious transactions were seen in the UK, Russia and Canada after a U.S. retailer suffered a security breach.
There appeared to be a media blackout in the U.S. on this story. But a CitiBank customer reported problems on a blog entry and that fueled wild speculation that their ATM network had been compromised. CitiBank has since released a statement which stated "Recently, we became aware of fraudulent ATM cash withdrawals on Citi-branded MasterCard credit and debit cards used in three countries on customer accounts that had been possibly compromised in previous retailer breaches in the US." "To protect customer accounts that were affected, we placed a special transaction block in those three countries on PIN based transactions. We are currently reissuing cards, as appropriate, to affected customers."
CitiBank took action to protect the deposits of their customers, but neglected the public relations side of the issue. This is truly a global economy with global communication capabilities.
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