For Immediate Release
FBI National Press Office
Fraud Investigation "Operation Cyber Loss"
The FBI and Department
of Justice are joined by the National White Collar Crime
Center (NW3C) today to announce that criminal charges have
been brought against approximately 90 individuals and companies
as part of a nationwide series of investigations into Internet
fraud, code named "Operation Cyber Loss," initiated
by the Internet Fraud Complaint Center (IFCC). Subjects
are facing a variety of Federal and state criminal charges
which include fraud by wire, mail fraud, bank fraud, money
laundering, and intellectual property right violations.
The fraud schemes exposed as part of this Operation represent
over 56,000 victims who suffered cumulative losses in excess
of $117 million.
Among the fraud
schemes targeted are those involving on-line auction fraud,
systemic non-delivery of merchandise purchased over the
Internet, credit/debit card fraud, bank fraud, investment
fraud, multi-level marketing and Ponzi/Pyramid schemes.
Internet fraud can be defined as any fraudulent scheme in
which one or more components of the Internet, such as Web
sites, chat rooms, and e-mail, play a significant role in
offering nonexistent goods or services to consumers, communicating
false or fraudulent representations about the schemes to
consumers, or transmitting victims' funds, access devices,
or other items of value to the control of the scheme's perpetrators.
Many of these cases were initiated as a result of fraud
complaints the IFCC received from individuals and businesses.
"Just as neighborhood watch programs keep watch over
their neighborhoods and report suspicious activity to law
enforcement, Internet users now have a 'cyber community
watch' program. When individual citizens, businesses, and
consumer agencies work with law enforcement at all levels,
we help ensure the safety and security of the Internet,"
said Attorney General Ashcroft.
J. Freeh stated, "The criminal charges being announced
today demonstrate the critically important role that the
IFCC plays in combating crime in cyber space. 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 IFCC became operational on May 8, 2000. The IFCC's mission
is to address fraud committed over the Internet. For victims
of Internet fraud, the IFCC provides a convenient and easy
way to alert authorities of a suspected criminal or civil
violation. Victims of Internet crime are able to go directly
to the IFCC web-site at www.ifccfbi.gov,
to submit their complaint information, relieving considerable
frustration for them in trying to determine which law enforcement
agency should receive their complaint. For law enforcement
and regulatory agencies, the IFCC offers a central repository
for complaints related to Internet fraud. All complaints
are sent through an internal quality assurance process and
are referred to the appropriate law enforcement and regulatory
agencies. The IFCC uses the information to quantify fraud
patterns, and provide timely statistical data of current
fraud trends. The IFCC, located in Fairmont, WV, is a joint
operation between the FBI and the National White Collar
Crime Center (NW3C). It is the first project of its kind,
a partnership between a federal law enforcement agency,
and a non-profit private organization, serving Federal,
state and local law enforcement agencies .
of this Operation are a direct result of the close working
relationship law enforcement has developed with the private
sector and e-commerce companies. As an example, Pay Pal,
Inc. and Motley Fool have provided great assistance in identifying
individuals engaged in wrong doing and reported that to
the IFCC. The support and cooperation provided the FBI by
other private sector companies such as Microsoft has also
been instrumental in the success of Operation Cyber Loss.
IFCC continues to expand its capabilities to better accommodate
the needs of businesses, it has begun the work of creating
the appropriate channels that will enable regular communication
with representatives from the private-industry across the
nation," said West Virginia State Auditor Glen B. Gainer
III, chairman of the board of directors for the National
White Collar Crime Center.
These cases have
been coordinated by 28 FBI Field Offices along with participation
by the U.S. Postal Inspectors Service; the Internal Revenue
Service-Criminal Investigative Division; the Securities
and Exchange Commission; U.S. Customs Service, the Competition
Bureau in Canada; and numerous state and local law enforcement
entities including the New York City Police Department;
New Jersey State Police; Salt Lake City Police Department;
Springville Police Department; Oregon High-Tech Team, the
Oregon State Attorney's General Office; College Station,
Texas, Police Department; Seattle Police Department; and
the Monroe, Washington, Police Department; Boca Raton, Florida,
Police Department; Florida State Comptrollers Office; Connecticut
State Police; Chula Vista, California, Police Department;
El Paso, Texas, Police Department; and the San Diego Police
| 2001 Press Releases | FBI
Home Page |