Florida Senate Passes Mortgage Fraud Bill

The Florida State Senate passed a bill which could land mortgage scammers in prison for up to 15 years, the South Florida Sun-Sentinel reports.

The penalty could be levied on any scammer committing any form of mortgage fraud, including inflating the price of a home for a loan. This practice is a common way used to skim cash off the loan amount, money which heads directly to a scammer’s profit.

Last year Florida ranked first in mortgage fraud cases and second in the amount of foreclosures. Nearly 80 percent of all foreclosures in Florida in 2007 were linked to mortgage fraud.

This bill, by passing the State Senate, only awaits Florida Governor Charlie Crist’s signature to become law.

Wachovia Telemarketing Abuse on Senior Citizens Costs $144M Settlement

Wachovia has agreed to pay as much as $144 million to settle a federal probe into its relationship with telemarketers who preyed on senior citizens, Consumer Affairs reports on its website. According to Consumer Affairs, this is the second-biggest settlement ever for the Office of the Comptroller of the Currency (OCC), the agency that regulates national bank. Wachovia is also facing at least two class-action lawsuits over its relationship with the telemarketers who allegedly harmed between 350,000 and 500,000 consumers.

OCC investigations said that from June 2003 to December 2006, the bank worked with several telemarketers and payment processors that obtained bank-account information over the phone from thousands of elderly and poor consumers by offering to sell them identify-theft certificates, discount travel vouchers and other questionable products or services. The payment processors and telemarketers involved were Payment Processing Center, LLC, FTN Promotions, Inc. dba Suntasia, Inc., Netchex Corp., and Your Money Access LLC, and related companies.

The practices cited by the OCC in the settlement involved the use of remotely created checks, or RCCs, by telemarketers and payment processors that maintained account relationships with the bank.

Credit Card Skimming a Growing Problem

According to the article, the restaurant industry is plagued with the highest incidence of credit card skimming, the practice of swiping a credit card through a device to record the magnetic strip data for the creation of fraudulent credit cards.

To prevent this from happening to your credit cards, the advocacy group Consumer Action and Washington Mutual Bank suggest the following: When your card is returned to you in a retail setting like a restaurant, make sure it is your card. Be sure to secure a receipt for all purchases because it could contain a credit card number.

Further, consumers should never give their credit card numbers over the phone to a stranger. Never respond to emails asking for a credit card number or bank account information, no matter how legit it looks.

Finally, consumers should review their monthly credit card statements and notify the card company if there is any suspicious activity.

America’s Best Mortgage Services Owner Sentenced for Mortgage Fraud Worth $37M

The owner of America’s Best Mortgage Services in Coconut Creek, who organized a $37 million mortgage fraud scheme surrounding condominiums in South Beach, has been sentenced to nine years in prison. U.S. District Judge Jose E. Martinez also sentenced former title attorney Gary Mills, who owned Deerfield Beach-based Four Star Title, to 46 months; and former Wachovia loan officer Karen Lynn Sullivan to 50 months, the South Florida Business Journal reports.

The U.S. attorney’s office said Crowder recruited buyers for residential properties, including 17 luxury condos in South Beach, telling them he could obtain no-money-down financing for their purchases. He then would apply for equity lines of credit with Wachovia on their behalf.

To induce Wachovia to issue the credit, Crowder and Mills prepared fake HUD-1 settlement forms, stating the buyers already owned the properties and significantly understating the amount of the first mortgages on the properties. The fraudulent forms were then given to Sullivan, who used them to facilitate the credits.

That credit was used to make down payments on first mortgages for the same units, and was also filed with false information. The mortgages on the South Beach units totaled $37 million. The defendants are scheduled to appear in court on May 29 for a hearing to determine the restitution they must pay to the victims.

Google Defrauds Adwords Customers?

Adwords, Google’s popular program for allowing advertisers to purchase pay-per-click ads, may be making things a little too confusing for their own good. According to a lawsuit filed in the US District Court in San Jose, CA, one advertiser claims Google’s deceptive system overcharged him for ads he didn’t want displayed on third-party-sites.

The complaint in the lawsuit, which is seeking class action status on behalf of those similarly situated, was filed by an advertiser who had signed up for Google ads to promote his private investigation business in Massachusetts. The lawsuit alleges that Google was deceptive and charged for ads displayed on third party web sites after he declined to check an optional box for Google’s AdSense program.

The suit claims that Google was intentionally being deceptive by “redefining the universally understood meaning of an input form left blank.” The lawsuit is seeking class action status on behalf of all advertisers with Google who allegedly have been defrauded of millions of dollars collectively.

Florida Uncovers Mortgage Fraud

Florida state investigators, working in conjunction with federal help, are beginning to uncover a litany of mortgage fraud scammers using subprime mortgages en route to higher profits.

According to the Palm Beach Post, U.S. Attorney for the Southern District of Florida says it’s charged three Palm Beach County residents with mortgage fraud. The three were arrested for using phony loan applications and inflated prices to garner $6 million in loans over the past two years.

Two of the scammers collected so-called marketing fees and assignment fees on the loans they’d conspire to acquire. These fees ranged from $29,000 to well over a half-million dollars. Prosecutors charge these fees are akin to kickbacks on inflated sales prices.

The loans, according to the report, were originated by the third defendant, a senior vice president for a mortgage service in Boca Raton, Fla.

Former Bristol-Myers Indicted on Charges He Lied to Regulators

Former Bristol-Myers senior vice president Andrew G. Bodnar was indicted Wednesday on federal charges he lied to the Federal Trade Commission about a pact he made with a Canadian generic drug firm.

Charges say Bodnar struck a deal with Canada firm, Apotex, to stop selling its version of Bristol-Myers’ blood thinner, Plavix, the company’s top performer. Bodnar allegedly hid the deal from regulators in a statement he made to the Federal Trade Commission.

Though Bodnar’s attorney says his client will plead not guilty, according to The New York Times, Bristol-Myers pleaded guilty to the charges in the cast last June, and paid a $1 million fine. Bodnar is facing up to five years in prison and a quarter-million-dollar fine.

Bodnar was allegedly an agent for the company on a trip to Toronto in 2006 when he made secret assurances to Apotex his company would not issue a generic version of the drug to compete with Apotex.

According to NYT, “Earlier that year, Apotex was threatening to sell its own generic version of Plavix before expiration of a patent that gave

Bristol-Myers and its partner, Sanofi-Aventis, exclusive rights to the brand-name drug until 2011. The threat by Apotex, which had filed a lawsuit
challenging the validity of that patent, was viewed as a serious problem for Bristol-Myers. In 2005, Plavix generated about $3.5 billion in United States sales.”

Bristol-Myers is required to disclose such deals with regulators but failed to. Apotex eventually sold its version of the drug and Plavix sales have plummeted since 2006. Bristol-Myers said it never entered a secret deal but was “taking responsibility for the actions of its employee” in an employee letter.

That employee is believed to be Bodnar.

Life is Good Settles with FTC

The online clothing retailer Life is Good, based in Boston, has settled charges it didn’t properly protect consumer’s personal information. FTC voted unanimously Friday to issue the final consent order in the case, according to a report from SC Magazine.

Two years ago hackers stole nearly 10,000 credit card numbers from the company’s database, through SQL injection attacks, a common way of attacking Web sites. The FTC says Life is Good failed to protect their customers’ security by storing credit card data in clear, readable text, failing to address Web site vulnerabilities and failing to detect unauthorized credit card data access.

To compensate for the breaches and as part of the settlement, Life is Good agreed to implement an information security program and be audited biennially for the next 20 years. Life is Good originally told customers it valued and secured private data.

Life is Good must also now designate an employee to head the IT security program with the company and identify risks associated with security, design and deploy measures to mitigate any security risks.

Misuse of Social Security Numbers Enables ID Theft

The Identity Theft Resource Center has counted 167 data breaches in the first quarter of 2008, according to a report in the Louisville Courier-Journal.

This alarming trend is leading to a general unease about online security and e-commerce, but this article also suggested several non-Web locations where a Social Security Number is tossed about like a cell phone number.

For instance, the article suggests, a woman collecting job applications needn’t be privy to the applicants’ SSNs. Professors can find another way to post a student’s grades, and further, colleges and universities can go about identifying students by SSNs. And finally, customer service representatives don’t need to know SSNs to respond to customer complaints.

The ITRC says these 167 data breaches in 2008 could potentially affect the private information of more than 8 million Americans. But just because your information could have been leaked and been vulnerable to a hacker or ID thief, it doesn’t necessarily mean it will be tampered.

If a breach does occur, the article suggests, put a fraud alert on your credit report, cancel any affected credit or debit cards, change bank account numbers and check your credit report at AnnualCreditReport.com.

Work at Home Scams on the Rise

The idea of working from home for a living certainly sounds better than the typical 9-to-5, but unfortunately it’s a hook many scammers are using and the bait is finding itself out of money, and in one case, in jail.

Reports of scams involving work-from-home offers ranked 13th last year, as reported to the Federal Trade Commission, but rose slightly over the amount of scams reported in 2006. Some common schemes involve the so-called employee receiving, sending and forwarding packages, medical billing jobs and mystery shopper jobs.

These offers typically arrive in the form of unsolicited emails or suspicious posts on message boards and typically offer great pay for seemingly no work at all. Victims of these offers have typically been people looking for extra cash to supplement their income (who does that exclude, really?), disabled people or spouses looking to help the family’s bottom line.

A Better Business Bureau spokesperson interviewed by MSNBC says, “As the demand for at home employment increases, so too will the schemes.”

In Pennsylvania, the Attorney General is investigating the mystery shopper scheme, which typically finds its way into your Inbox. What better way to earn money than to fake shop looking for poor customer service? Sadly, the scam involves a company sending you a bogus check which a portion you must return to the company, then pay full price for when the person who cashed it realizes it’s a phony.

A Georgia man ended up facing charges of receiving stolen property after he signed up for a package forwarding scheme looking to supplement his state income because of rising fuel prices.

And an Ohio woman who could no longer work in an office setting because of health reasons made the investment of a fax and printer for her alleged, new medical billing job but ended up out of a $195 deposit to get the job (which should set off an alarm already), the cost of the printer and fax, and no job.

Consumer advocates, members of law enforcement and the federal government all say with economic conditions worsening, the idea of extra income through a work-at-home job may sound enticing, but few offers are often legitimate.