Hello Fraud Fighters and Scam Stoppers,

It was another week where fake account scandals were the big news of the week.

Charlie Javice, the young entrepreneur that fooled Chase into spending $175 million to buy her company by creating 4.2 million synthetic student accounts was arrested and could now face up to 80 years in prison for her crimes.

Hindenburg research continued their barrage of allegations against Cash App, claiming that Block’s recent response proves that they inflated their user accounts by millions.

And, banks continue to grapple with soaring check fraud - a topic that makes national news almost weekly at this point.

Here are some of my favorite and more interesting stories of the week.

Hindenburg - Did 50% of Cash App’s Customers Vanish?

Hindenburg kept up the assault on Block this week, saying that Block’s response to their allegations actually confirms that they have inflated their user accounts for years.

They claim that instead of refuting the key issues, Block’s response confirmed much of their analysis and avoided addressing many of the other claims.

According to Hindenburg, Block’s own CFO claimed 80 million active users just months ago, which is significantly greater than the 41 million actives they are claiming now.

Click on this link or the image below to read the story

Charlie and The Fraud Factory - She Now Faces 30 Years in Prison

The audacity of Charlie Javice is unparalleled. When Chase sued her for defrauding them for $175 million by creating 4.2 million synthetic student records she countersued them claiming they knew about the fraud all along.

Everyone wondered how Chase could have fallen for such an egregiously perpetrated scheme but also how Javice could have been so incredibly dumb for documenting her fakery on email for the world to see.

Apparently her company was shopped to 100 other banks including Capital One but they all dropped out after seeing her limited operating results or perhaps they became suspicious of all of the inconsistencies in her own website and pitch deck.

But this week Javice was finally arrested and faces up to 30 years in prison if convicted. Things took a very dark turn for her this week and it looks like her alleged crimes will finally catch up to her.

If you want to download a presentation I recently gave that tells the story - you can click here to get a copy too - Charlie and The Fraud Factory

This week, the DOJ and the SEC published their indictments and they are incredibly damning. If you haven’t had a chance to read it, I highly recommend you do. It’s an incredibly fascinating story.

Click on this link or the image below to read the indictment

New Study - 13% Of Fake Synthetic Identities Had Drivers Licenses Under The SSN

A few weeks back, an analyst indicated that Cash App could not have fake accounts because they required a valid SSN and a drivers license to confirm identity of the account holder.

But this statement is naive. In fact, there are millions of accounts here in the US masquerading as real using stolen social security numbers and valid drivers license. And you don’t have to look far to find evidence of that.

A recent analysis of hundreds of confirmed synthetic identities by Point Predictive found that 1 in 7 of those synthetic identities using a false social security number that did not belong to them had a valid drivers registered under that created identity.

Apparently many states may not be doing a great job of validating that the social security number actually belongs to the driver before issuing the drivers license.

The finding dispels the notion that simply verifying a valid drivers license can stop a synthetic identity with 100% accuracy. It also indicates that banks and fintechs will need to continue deploying a variety of techniques beyond simple document verification to solve the problem of synthetic identity.

The analysis was conducted as part of a larger deep dive report into auto lending fraud trends which will be released later this month by the company.

To Fight Check Fraud Stop The Fraudsters At The Door, The ATM and The Branch

It’s extremely tough to get a bank to invest in new check fraud tech. Trust me, I spent 3 years as a consultant several years ago trying to get banks to invest in their aging check but to no avail. There is no appetite to spend money on checks since most banks think they are going away soon anyway.

The fantastic Mary Ann Miller invited me to speak at a Prove Webinr to talk about a whole new approach to check fraud - stopping it at the front door.

I am posting the full webinar here if you want to check it. Some banks are reporting that 60% or more of their check fraud problem is caused immediately after account opening suggesting that you need to focus on origination strategies to really address the issue.

Check it out!

Banks Grapple With Remote Deposit As Fraud Soars

Remote Deposit Fraud, altered checks and mounting domestic collections have banks hyper focused on solving the problem of check fraud.

For many banks It’s clear now. Check fraud is their #1 problem in 2023.

While the extent of the problem has been widely reported in the last year, according to Troy Huth, Director at Auriemma, Mobile Deposit is where banks may need to apply more focus.

“Due to the large number of deposits coming in via mobile deposit resulting in no visual inspection of the items by a teller, there is a great need for banks to implement more sophisticated image analytic capabilities”

Click on this link or the image below to read the article

Ruthless New Fraud Crime Involves Drugging Victims And Using Facial Recognition To Drain Their Bank Accounts

Investigators in New York City have linked at least 43 separate incidents to a ruthless new fraud.

Two separate crime rings have been tracked giving fentanyl to their victims and then while those victims are unconscious, using their faces to unlock their phones and drain their bank accounts linked to their mobile banking apps.

John Kelly, a criminal profiler, says that these robbery rings could be considered “serial killers” in the way that they seduce their victims and then take advantage of them while they are incapacitated.

Special thanks to Mary Ann Miller for finding this story. The latest crime is part of a new trend where consumers are being victimized by account takeover and identity theft when their phones are stolen.

Click on this link or the image below to read this article.

$10 Million In Hamburger Fraud At Burger King? How Is That Even Possible?

The McDonald Hamburglar had nothing on 5 women from Jamaica that are accused of stealing $10 million dollars from their employer Burger King.

The 5 ladies, including their supervisor, apparently voided transactions and kept the cash from customers.

Click this link or the image below to read the story.

Meet The Biggest Romance Scammer In History - He Married Over 100 Woman

Giovanni Vigliotto may be the first first and most prolific romance scammer in American history.

Between 1949 and 1981 he married 105 different woman without getting a divorce from any of them.

According to the Guinness World Records, Giovanni Vigliotto is not the real name of the person but just one of the aliases he used with his last wife before getting caught.

In 1983, Giovanni Vigliotto was given 34 years of prison time for his crime of bigamy. But was worse was how he victimized the women. He would meet the women at flea markets, profess his love for them and quickly propose.

As part of his scam he would have them pack up all of their belongings in his car so they could run away with him. When they finished packing he would flee with all of their belongings and leave the women penniless.

He got away with it over 100 times before he was arrested.

Click on this link or the image below to read the story.

Cash App Fake Accounts - Fact or Fiction?

Karisse Hendrick and I had a chance to sit down and discuss the bomb fire allegations made by Hindenburg Research against Cash App.

They made claims of systematic fraud that made many believe that 50% to 75% of the accounts on the platform were either fake, involved fraud or were duplicate accounts.

But all is not always as it might seem. Listen to Karisse’s Fraudology Podcast and make up your own mind about whether it is fact or fiction.

Click on this link or the image below to listen.

This Inspiring Fraud Fighter Went From Banking To A Fraud Startup And Loves It

About 3 years ago a fraud fighter named Shannon Slaughter caught my eye on LinkedIn.

In the hundreds of post on fraud I see a day, her post always stood out. I could tell she had a passion and fire for stopping fraud and was a true blue fraud fighter through and through.

So when I reached out to her to see if she would be interested in being this weeks Featured Fraud Fighter, I was not surprised when I found out her email started with “SlaughterFraud@”. 😂 Obviously this was a play on incorporating her name and job into her email address but it was fitting.

Like all of us, Shannon lucked into her job in fraud. She was working in a bank as a check sorting machine operator when Check21 made the job obsolete in 2008.

By a stroke of good luck a position in fraud was open and she took it. Over the years she progressively worked her way up the ranks and created training programs that were so successful at the bank that they cut fraud in half after they were implemented.

Her big break though came in March of 2021 when she made the big leap from banking into fraud tech and accepted a job with Sentilink as a Risk Analyst. The job was a breath of fresh air for her and re-energized her love for fraud and helping people.

Making the leap from being a front line fraud manager at bank to a fraud startup is not for everyone but it was right for Shannon and she uses every opportunity she can inspire others who might be thinking about making a similar change.

Here’s a bit of her inspiring advice for other fraud fighters she posted about a year ago.

If you’re not connected with Shannon, I suggest connecting with her or following her and her journey in fraud!

Thanks for keeping up with my weekly fraud newsletter, I hope you find this helpful in keeping up with the latest trends and fraud stories.

If you have any tips for me on stories, please drop me a line. I always appreciate hearing from you.

Have a positive and fun filled fraud fighting week!

FrankonFraud