FBI cracks down on Net fraud
The probe, dubbed "Operation Cyber Loss," was sparked by complaints made to the Internet Fraud Complaint Center, a partnership between the FBI and the National White Collar Crime Center. The FBI and Justice Department said criminal charges were brought against approximately 90 individuals and companies as part of the investigation.
The individuals and companies that have been charged face a variety of federal and state criminal charges, including fraud by wire, mail fraud, bank fraud, money laundering and intellectual property right violations.
The government did not release the names of the businesses and individuals charged. The probe took a look at acts including online auction fraud, non-delivery of merchandise bought over the Web, bank fraud and pyramid schemes.
In regards to online auction fraud, over 1.3 million transactions take place on those sites each day, the government found, although less than 1 percent result in fraud. It also found that 80 percent of the people who reported online auction fraud used personal checks or money orders as their method of payment.
Officials said the operation was also a coordinated effort between the government and private sector. For instance, Internet person-to-person payment company Pay Pal and financial information Web site Motley Fool provided assistance in identifying individuals engaged in criminal activities.
The government defines Internet fraud as any scheme in which one or more components of the Internet--such as Web sites, chat rooms or e-mail--play a significant role in offering nonexistent goods or services to customers, communicating false or fraudulent representations about the schemes to consumers or unlawfully transmitting a person's funds or access passwords into someone else's control.
"The criminal charges being announced today demonstrate the critically important role that the IFCC plays in cyberspace," FBI director Louis Freeh, who announced his resignation earlier this month, said in a statement. "It is essential that law enforcement, e-commerce and victims of crime have this electronic clearinghouse to expeditiously disseminate Internet fraud cases to the appropriate agency for investigation."
The announcement Wednesday comes a day after Congress blamed the FBI's computer crime unit, the National Infrastructure Protection Center, for not adequately alerting the public of dangerous computer viruses because of staff shortages and vacancies in key positions at the agency.
Last year, the Federal Trade Commission launched a joint task force targeting the 10 crimes most perpetrated over the Web. Among those scams were auction and health care fraud, pyramid and travel scams, and phony Internet service schemes.