Every once in a while, a fraud story comes along that leaves us totally befuzzled, either for its hilarious twists and turns, or for the sheer irony of the scheme. We’ve compiled seven of these outlandish tales, so that you might join us in our confusion, laughter and awe.
Farming investment app leads to international fugitive chase
Farm Bank, the Turkey-based app that strove to capitalize on the popularity of Facebook’s Farmville, had one thing that Farmville never had: a component that encouraged users to invest in real-world livestock and agricultural operations. Launched in 2016, Farm Bank staged elaborate PR stunts to make users believe that certain farms were being run due to the influx of capital from the game’s users. In 2017, the app developed a franchise of more than 100 delis around Turkey, allowing franchisees to sell products bearing a Farm Bank logo, though they did not come from the company’s farms. While users continued to invest thousands in the app, returns on investments grew fewer and farther between. In early 2018, the Turkish Ministry of Customs and Trade launched a criminal fraud investigation, prompting the company’s founder, Mehmet Aydın, to flee Turkey for Uruguay, taking with him $80.5 million of the $250 million that Farm Bank users had paid out to the company. In July of 2021, Aydın finally turned himself in to authorities at the Turkish consulate in São Paolo, Brazil. He was extradited to Turkey, where he released a statement maintaining his innocence. He currently faces up to 75,260 years in prison.
Hackers strive to negotiate by lowering ransomware amount
When the Florida-based IT firm Kaseya suffered a ransomware attack in early July, the impact of the attack was felt across five continents, with Swedish supermarkets unable to operate cash registers and New Zealand school children unable to access their online classes. The 10-day Kaseya server outage ultimately affected around 36,000 Kaseya customers. Though the hackers initially demanded a ransom of $70 million in Bitcoin from Kaseya, a spokesperson from the hacking group wrote via a chat interface, “We are always ready to negotiate.” This willingness to negotiate eventually led cybersecurity expert Jack Cable to confirm that the hackers had lowered their ransom to $50 million. On July 21, Kaseya announced they had come into possession of a universal decryption key, though they deny having bought the key from the hackers. At this point, it remains unclear whether lowering your asking price by $20 million is a fruitful strategy, though it is certainly a bold one.
Nun disobeyed vow of poverty as she embezzled over $800,000
Sister Mary Margaret Kreuper, a 79-year-old retired nun and former principal at St. James Catholic School in Torrance, California, admitted to embezzling $835,339 over a 10-year period. By falsifying her school’s financial reports, Kreuper transfered money from the school’s tuition and donation account into a savings account that was intended to fund living expenses for the nuns employed by the school. After Kreuper’s retirement in 2018, an audit uncovered that she had been diverting funds for her gambling habit and had instructed employees to alter and destroy certain financial documents. She faces up to 40 years in federal prison on money laundering and wire fraud charges.
Rappers caught up in IRS fraud scheme
Sameerah Marrell and Noell Brown, members of the rap duo Deuces Wild, based in Southfield, Michigan, were accused in May 2021 of aggravated identity theft and false claims of conspiracy after a yearslong fraud scheme allowed them to net more than $13.6 million from the IRS. Between 2013 to 2017, the duo filed 122 tax returns, some from fake companies that they established, and others by stealing people’s identities. By the time they were caught, more than $5.5 million had already been paid to them, which the duo used to amass a number of luxury cars, including two Bentleys, a Porsche and a Mercedes-Benz. Each woman faces up to 10 years in prison.
Master of disguise operated fraud scheme with the help of elaborate prosthetic face masks
The 56-year-old John Christopher Colletti of Harper Woods, Michigan, pled guilty to identity fraud and wire fraud schemes by which he amassed $125,740 from his victims. Always wearing some sort of elaborate disguise, usually involving a prosthetic face mask, Colletti frequented casino kiosks to withdraw cash from stolen account numbers. Though casino kiosks require users to insert a driver’s license and the last four digits of their social security number, Colletti had purchased this data online by seeking out the identities of gamblers who are part of casinos’ VIP Preferred Program. He then had fake licenses produced in their names. When he was arrested in March of 2020, a search of his vehicle yielded “four prosthetic face masks, flash drives, 83 driver’s licenses, 14 insurance cards in multiple names, six open water diver certification cards, two Binghamton University staff ID cards, [and] 19 players cards from various casinos.” In late July 2021, he was sentenced to four years in prison for his scheme.
Facing a fraud sentence, scammer is caught while attempting to flee to Canada
Andy Patel, who admitted to helping facilitate fraud schemes via Indian call centers, was sentenced to 40 months in U.S. prison in September 2020. The call center scheme, which impersonated the IRS and scammed victims out of a collective $11 million, employed Patel, who lived in Illinois, as a runner on the ground in order to move money from prepaid cards to different accounts within the U.S. After being released from jail after his sentencing, Patel was meant to surrender to U.S. Marshals on November 3, 2020. Viewing his few final weeks of freedom as an opportunity, Patel attempted to flee to Canada in October but was promptly picked up on the border. Now, in addition to his 40-month sentence, Patel has been ordered to pay $250,000 for his last-ditch effort to escape.
80 year-old money launderer attempted to purchase a bank to keep his operation alive
Pablo Hernandez of Tijuana, Mexico, received a seven-year sentence in January 2021 for his involvement with money laundering for a drug trafficking syndicate. Charged with violating RICO, Hernandez admitted that he laundered millions of dollars from Mexico to the U.S. through an account at the Westminster-based Saigon National Bank. When one of his accounts was shut down by the bank, Hernandez tried to purchase the bank itself so that they could proceed with their operation. The bank has now changed its name to California National Bank, but its former CEO, Bill Lu, is indicted in the RICO scheme, along with 25 other people associated with the operation. In an investigation that prosecutors have begun calling “Operation Phantom Bank,” 15 of the 25 defendants have been convicted so far.
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SOURCE: ACFE Insights – A Publication of the Association of Certified Fraud Examiners