Hi Everyone,

It’s a big week for fraud, with the UK banks now required to reimburse victims up to $112,000 if their customers are scammed. I am interested to see how this goes!

Let’s check out the top fraud bites this week.

• BofA Inside Job - CourtWatch learns of a massive international money laundering ring involving a Bank of America branch manager in Michigan who worked in cahoots with a local real estate agent to launder millions. BofA nor the DOJ commented on this developing story.

• Silicon Spies - A fascinating Coinbase expose on a flood of applicants infiltrating crypto companies in the US. They say 50% of applications they receive are from North Korean infiltrators.

• AI Defeats Captchas—The AI threat is real and can now defeat most annoying Captchas online. We’re going to have to rethink everything about security and fraud soon.

• AI Sex Bot Exploit—Organizations that lose access to their cloud environments can quickly become part of a disturbing new trend: Cybercriminals use those credentials to power armies of AI chatbots.

• AI HoneyPots—Russian hackers are now deploying AI Deepnude generator apps, which are just honeypots to spread malware. A user uploads a picture to get a deepfake nude; after the photo is created, they are instructed to download it, but it installs malware on their computer and steals all their passwords.

• Revolut Slams Facebook - A day after Meta announced a partnership with a couple of UK banks, Revolut slammed them, saying it’s too little, too late, and they need to reimburse scam victims.

• Spreading Like A Virus - Chinese-inspired Pig Butchering operations are sprouting up in Latin America, West Africa, Dubai, and Eastern Europe as the criminal operations spread worldwide, raking in billions.

Instagram Automatic Fans: Rise of The AI-Powered Scam Bots

Imagine a wall of phones powered by artificial intelligence scamming thousands of people every minute.

New videos revealed online by scammers show this is now a reality. They are called Instagram Automatic Fans and are a newly revealed AI-powered solution to supercharge pig butchering scams.

First reported by Troy Gochenour, an investigator with the Global Anti Scam Organization, these artificial intelligence-powered scambots could be poised to significantly upscale pig butchering operations.

Click to Read 👇️ 

The Youngest Serial Fraudster Is Just 9 Years Old

Imagine being in third grade, stealing millions from the largest retailers in the world, and running one of the most successful Telegram fraud channels.

According to Brett Johnson, that’s exactly what went down recently. And it’s not an isolated incident, according to authorities. In another case, a ten-year-old was doing precisely the same thing. As you can imagine, the kid will not be charged, but you have to ask yourself, who was behind this? Did his parents put him up to it and let him take the fall?

My prediction? 👉️ - We will see a 16-year-old pull off a billion-dollar fraud in the next 18 months. That is where this is headed.

Slow Your Roll - UK Implements 4-Day Hold On Instant Payments.

The future of instant payments is slow, not instant.

In exchange for getting reimbursed up to $113,000 when they are scammed, consumers in the UK will be subjected to 4-day holds based on the bank’s discretion. They can hold any payment when there are reasonable grounds to suspect fraud or dishonesty.

I can already hear the complaints rolling in. If you want banks to reimburse losses, you have to give them control over the release of the funds.

Click to Read The Bill 👇️ 

DoorDash Account Takeover Scammers Stole $1 Million Then Did Something Dumb

Two greedy fraudsters stole $1 million from hardworking DoorDashers in a sophisticated account takeover scheme. They would contact customer service, impersonate the dashers, and social engineer their way into changing the passwords on the accounts.

As the scheme progressed, they became progressively more greedy and started trying to recruit customer service agents to join their fraud ring and feed them drivers' personal information. Nobody took them up on it.

Over time, DoorDash improved its fraud strategies and began to ask for driver’s licenses and selfies before changing passwords. And that is where they screwed up. They submitted their photos, and the scheme unraveled quickly.

Click to Read 👇️ 

Scattering Fast: Criminals Fleeing Telegram Like Rats Off Ship

Gary Warner of Dark Tower and his team find that criminals are quickly ditching Telegram and seeking a safe harbor in Signal, where they can stay anonymous. As you know, Telegram is reportedly turning over bad guys' information to the police, and everyone is running scared.

They analyzed three dozen fraud and drug channels, and most are attempting to remove their users from Telegram and shuttle them over to Signal.

Check out their fascinating analysis. 👇️ 

“Going Instant”: Fraud Ring Targets Interactive ATMs With Glitch Style Scheme

Have you ever seen those interactive ATMs (ITM)? They might be a target for fraud as criminals target the looser hold policies that those machines offer. One credit union, Wings Credit Union, recently learned the hard way.

This week, police swooped in and arrested a fraud ring targeting ITM machines in Minnesota the same way Chase was targeted weeks ago. They were depositing fraudulent checks and immediately withdrawing the money. The ring targeted the machines at night and on weekends when its odds of success were higher.

Click to read 👇️ 

AIOCrime: Telegram Bans One Of Largest Fraud Channels

One of the largest fraud channels, AIOCrime, which boasted over 11,000 subscribers, was banned last Thursday. The channel was a hotbed of professional refunders, scammers, and fraud services like OTPBots used by scammers in bank impersonation scams.

The channel was formed in 2019 and is the latest casualty in Telegram’s crackdown on criminal activity on the messaging platform. Other recently added channels include CreditGhost, SharkTank, and several others.

A Simple Phone Call: How Malone Pulled Off His $240 Million Heist

Malone Lam lived like a billionaire when he was arrested a week ago. He pulled off the scheme using old-fashioned social engineering and made a simple phone call to the victim, and a day later, he got his hands on one of the biggest stashes of Bitcoin in the world.

This guy breaks down exactly how he did it.

Click to watch 👇️ 

@tigertradez

How did malone manage to pull off a $240 MILLION dollar crypto heist?

Enrolls: Fraudsters Love Em, But What Are They?

You might be at risk if you haven’t enrolled in online banking. That’s because fraudsters are actively searching for those accounts to secretly enroll you and then drain your account without you even knowing.

As another devious trick, they enroll in Card Valet (a self-service to manage fraud alerts sent from the bank) to intercept and control the fraud alerts sent to customers.

More of these are popping up on fraud channels 👇️ 

The 6,000 iPhone Fraud Case - Apple Had No Idea What Happened

They bought a damaged iPhone that was still under Apple's warranty. They shipped the phone to China, put counterfeit parts in it, and then shipped it back to Apple, saying the phone didn’t work. Apple couldn’t fix it, so they sent them a brand-new iPhone instead.

Then they did that and other schemes 6,000 more times and collected over $3 million from Apple. Apple couldn’t tell counterfeit phones from genuine phones.

Haotian Sun was the mastermind of the scheme and he was arrested this week. Read the case against him and his wacky scheme that was crazy enough to work.

Click to Read 👇️ 

That’s a wrap for another weekly edition of FrankonFraud. I hope you have a really great week ahead fighting fraud.

Special thanks to fraud fighter Ken Palla for some great story tips this week.

FrankonFraud