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FBI Says Wire Fraud Scam Sending Millions To China 125

Posted by CmdrTaco from the hey-just-stoppit dept.
Trailrunner7 writes "The FBI is warning businesses about an ongoing spate of attacks that are stealing millions of dollars from companies through unauthorized bank transfers to Chinese companies. The fraudulent wire transfers are not a new tactic, but the FBI says the current round of attacks is notable in that virtually all of the transfers are going to shell companies based in China and have cost U.S. businesses $11 million. The FBI said that many of the cases it has seen involve well-known pieces of malware, such as Zeus, SpyEye and others. The amount of money the attackers try to transfer varies from $50,000 up to nearly $1 million."
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FBI Says Wire Fraud Scam Sending Millions To China More

FBI Says Wire Fraud Scam Sending Millions To China

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  • I am not able to understand this. They already own USA. Then why are they stealing from something they already own? Well, chalk it up to yet another thing of deep eastern mysticism unfathomable by the shallow western philosophical materialists.

    • Re:Cant figure this one out. Quite inexplicable. (Score:4, Informative)

      by erroneus ( 253617 ) on Wednesday April 27, 2011 @11:02AM (#35953898) Homepage

      We said and feared something similar when Japan was on an economic rampage.

      China owns a lot of US Debt. That's not the same as owning the US... not yet anyway. China has been playing a lot of dirty money games such as valuing their currency based on US currency which is a very certain way to maintain a trade deficit.

      But let's not confuse "chinese government" with "chinese people." They are an interesting set. On one hand, they are the most viciously capitalistic people on the planet. On the other, they live under an oppressive government that claims to be communist but are actually just an abusive bunch of control freaks.

      So some clever Chinese people realized that they are pretty much "untouchable" and have decided to perform criminal acts from across the internet. They also know they are likely not to get punished so long as they pay off the right officials in the process. It's how their game is played.

      • Re: (Score:3)

        by 0123456 ( 636235 )

        On the other, they live under an oppressive government that claims to be communist but are actually just an abusive bunch of control freaks.

        What's the difference?

        • Re:Cant figure this one out. Quite inexplicable. (Score:5, Informative)

          by erroneus ( 253617 ) on Wednesday April 27, 2011 @11:13AM (#35954030) Homepage

          What's the difference? Wow. Learn what "communism" is supposed to be. For most people, it is the picture of utopia. Most people are "communist" and don't even realize it. The problem is that communism has never happened in the history of the world and the promise of it has been used to overthrow governments and cultures all over the world and have invariably resulted in oppressive and abusive states like China, the former USSR, Cuba and who knows where else.

          Seriously, I invite you to learn what communism is supposed to be. If you spend even a little time learning about that and about human behavior, especially from a sociological perspective, you will see pretty clearly that communism is a huge lie that can never happen because people are involved. Once you have learned those things, you will see the difference. Communism ain't what you think it is.

          • Re: (Score:2)

            by 0123456 ( 636235 )

            What's the difference? Wow. Learn what "communism" is supposed to be.

            I'd rather look at what "communism" has actually been in every country where it's ever been tried: an abusive bunch of control freaks telling everyone what to do and murdering those who disagree.

            • Re: (Score:2)

              by h4rr4r ( 612664 )

              Good for you. The rest of the world prefers to learn about subjects then compare and contrast them to reality. No fancy book learnin for you.

            • Re: (Score:2)

              by Luckyo ( 1726890 )

              So, by your own admission, the "people's democracies" of the former Warsaw pact are in fact a brilliant and shining example of democracy? As well as Democratic People's Republic of Korea?

              Seriously, get your head out of your ass. PR calling things exact opposites of what they are doesn't make things whose names they usurp equal their actions. If you live in the modern times and still haven't learned this, I have a lot of land on the Moon to sell you.

            • People use the wrong terminology for things all the time. Consider what the term "hacker" has come to mean in contrast to its original meaning.

              If you want to see communism in action (not "communism"), look at the kibbutz system in Israel. You'll find a distinct lack of totalitarianism and murder.

              • People use the wrong terminology for things all the time. Consider what the term "hacker" has come to mean in contrast to its original meaning. If you want to see communism in action (not "communism"), look at the kibbutz system in Israel. You'll find a distinct lack of totalitarianism and murder.

                Or look at the Mondragon co-operatives in Spain, not absolutely egalitarian, but close enough, and a practical and successful economic model.

          • I've studied political and social structures and can tell you that communism is NOT the picture of utopia-- and was never really written to be utopian. It was a reaction to the perceptions of an era gone by. Collectivism was an experiment that lead to totalitarianism, as many sociopolitical experiments often lead.

          • What's the difference? Wow. Learn what "communism" is supposed to be. For most people, it is the picture of utopia.

            Well, there was pretty much always been the concept of the Vanguard [wikipedia.org].

            These are the guys who ram communism down everyone's throats and act as the visionaries to make sure everyone complies with their ideals. The initial implementation pretty much requires force in order to make everyone realize the glorious days to come -- Stalin, Chairman Mao, Pol Pot are examples of this. Look at how they're

            • Re: (Score:2)

              by sjames ( 1099 )

              You must admit though, that at a theoretical level anyway, Communism (minus the whole Atheism thing) is fairly harmonious with Christian values and the GOP is pretty close to the antithesis.

          • If your system puts almost total control over property and ownership in the hands of the government then it will always result in a totalitarian regime no matter how much you want to believe otherwise.

            Any system of government can be awesome if you ignore it's inherent faults and focus on what it could be if everything magically worked they way you want it to. Benevolent dictatorships have lots of advantages, except that no one is good enough or smart enough for those to be realized, and most people in power

          • Wow. Learn what "communism" is supposed to be. For most people, it is the picture of utopia.

            Same could be said of democracy, and look how that keeps turning out. Not trying to trash democracy here, just noting that people keep fucking it up.

          • Seriously, I invite you to learn what communism is supposed to be. If you spend even a little time learning about that and about human behavior, especially from a sociological perspective, you will see pretty clearly that communism is a huge lie that can never happen because people are involved.

            Exactly, it's too idealistic to be practical. Like Libertarianism (real Libertarianism, not the corporate-sponsored version that's sweeping the land).

          • Re: (Score:1)

            by Anonymous Coward

            Your statement is true even if every instance "communism" is replaced with "capitalism" (in the Happy Adam Smith sense) or even "democratic". The comedy here is that people seem to be under the impression that America is a Democracy with Free Markets. It really isn't, not by a long shot.

          • Seriously, I invite you to learn what communism is supposed to be. If you spend even a little time learning about that and about human behavior, especially from a sociological perspective, you will see pretty clearly that communism is a huge lie that can never happen because people are involved.

            The same can be said for Libertarianism. Both belief systems are based on fundamental misunderstandings of human nature: communism is founded on the notion that workers are somehow less corrupt and greedy than the rich and the despised middle class, libertarianism on the concept that humans will somehow behave at all times, in regards to all decisions, in a thoroughly rational manner, based strictly on their own self-interest, particularly where money is concerned. Both are utterly laughable ideas. The firs

          • The way I get it (and I am not expert) is that Communism is simply the political extension of commune or communal. That is where people work and live together for the common good. I think ideologically it simply means that the rights of the state supersede that of the individual. So far as an ideal goes, its pretty darn good, in principle.

            In practice however Greed, and Power tend to get in there and mess about. Where everyone is supposed to be "equal" there tends to be large inequity. China saw that the sta

            • I think ideologically it simply means that the rights of the state supersede that of the individual. So far as an ideal goes, its pretty darn good, in principle.

              Until you are the individual whose rights get superseded. It can only sound good to you if it is other people's rights getting superseded but not yours and if you are a selfish arsehole totally lacking in compassion. Unless of course it is only the BAD people whose rights get superseded and they deserve it and it won't affect you because you are one of the GOOD people, in which case it differs little from a theocracy.

              • I guess I meant from an ideological perspective.

                First supposedly in Communism there is no, Bad or Good people all are equal as that is the whole point. The ONLY bad people would be those that refuse to participate in Communism, hence some of the strife caused.

                However, yes if you are the guy that gets his rights taken away, it sucks, but supposedly it is for good reason for the greater benefit for all, and thus worthwhile.

                The classic harsh example might be: You have to be killed, but in being killed you save

          • Re: (Score:2)

            by jesseck ( 942036 )
            I've believed Communism would be the best form of government... but Human Nature makes that impossible. So, we'll settle for second best, such as a Republic or Democracy, where at least a mass of human nature can hopefully cancel out the evil.

          • Re:Cant figure this one out. Quite inexplicable. (Score:4, Informative)

            by Hatta ( 162192 ) on Wednesday April 27, 2011 @02:29PM (#35956460) Journal

            The problem with communism as it's been tried so far is that it hasn't been democratic. Totalitarian communism is just as bad, and bad for the same reasons, as totalitarianism capitalism. What the world needs is democratic communism.

            FWIW, Bakunin forsaw the problems with Marxism well before it was ever applied. He famously said "freedom without Socialism is privilege and injustice and that Socialism without freedom is slavery and brutality". He was right on both counts.

        • Communist is a subset of control freaks - there are plenty of control freak systems that are not communism.

          And you can't be stupid enough to not know that.

        • On the other, they live under an oppressive government that claims to be communist but are actually just an abusive bunch of control freaks.

          What's the difference?

          It's always great to hear insightful and interesting comments from experts in political philosophy.

          In the meantime...

      • Why complain when you can bomb them? That seems like your standard foreing-policy to deal with all those half-naked, food-deprived, thirsty countries in the middle east.

      • Owning US Debt is never going to be the same as the owning the US. The US will just print it and send over the worthless digital paper. Now that would be a very unpleasant experience for Americans and also unpleasant for the Chinese (though less so).

        Pegging, well psuedo-pegging, their currency isn't really a dirty money game. The US controls half that game and could stop it overnight too.

        • This is NOT about owning our debt. It is about owning the companies, obtain the IP, and then moving the manufacturing to your own location before you decide to hit them hard.

      • But let's not confuse "chinese government" with "chinese people."

        What the hell is that supposed to mean? Is the Chinese government run by Albanians, or what?

        • No, they're run by large, multinational corporations same as every other modern country.

          • And these corporations, they're run by what, martians? See, it still makes no difference. All we are seeing is how power evolves. Humans are just the medium, not really in any direct control.

            • And these corporations, they're run by what, martians?

              Heh, maybe -- how would I know for sure? :D

              No seriously, the point is that corporations are not strictly speaking run by humans, but by committees.

      • Re: (Score:2)

        by guruevi ( 827432 )

        What's the difference with the US? Except that the US Government owes China and the US values it's currency based on oil and by forcing other economies to use it.

        The US-ians are also viciously capitalistic, they'll even forgo Universal Health Care as long as it doesn't impact them. They live under an oppressive government that claims to be democratic but are actually just an abusive bunch of politically incestuous control freaks.

        So some clever US people realized that they are pretty much "untouchable" and h

      • Speaking of which, would someone who's knowledgeable on the matter care to comment on the Chinese/US exchange rate mechanism?

        I mean, the Chinese can say that "Henceforth the yuan will be worth X". But how can you make people obey that?

        Or does Chinese government just print/destroy money as required to maintain the exchange rate? If so, it's really hard to discern what the difference between that, and the Fed's "quantitative easing [google.com]" (basically, "printing" money) is.

      • No, it is not inexplicable. This place is full of script kiddies who have access to both the scripts and the limited know-how required to run the botnets. They also have two other things that are required and that most people forget: 1) they have absolutely no morals and no interest in anyone besides their immediate family.
        2) they have a good stack of easy money from their family who are proud of their offspring and their "business acumen"

        Chinese message boards are packed with people who consider anything w

    • I am not able to understand this. They already own USA. Then why are they stealing from something they already own?

      Well, if you own a bunch of US debt, and steal a bunch of cash ... you get paid twice. Greed is a pretty easy motive to grasp.

      And, as has been pointed out, this may not be the same people who own the debt ... when you're willing to do this kind of large-scale fraud, you're certainly not playing by any "rules" of good conduct.

      • Re: (Score:2)

        by HermDog ( 24570 )
        The way things are going, I figure it's the only way the Chinese can be sure they'll get any return on their investment.
    • China holds approx 6% of outstanding near term treasury certificates. How you figure they own the US is a mystery.

    • Re: (Score:2)

      by MrHanky ( 141717 )

      Less money in circulation means each dollar is worth more. The Chinese are just taking money out of the country to prop up the value of the dollar as a currency. Otherwise it would end up worthless, destroying their investment. Really, the U.S. should thank the Chinese government for enabling them to pay back their debts in money that has value to them. Twice.

    • I am not able to understand this. They already own USA. Then why are they stealing from something they already own? Well, chalk it up to yet another thing of deep eastern mysticism unfathomable by the shallow western philosophical materialists.

      The biggest owners of the US Debt are US Citizens and companies.
      http://www.mint.com/blog/trends/who-owns-the-u-s-debt-07152010/?display=wide [mint.com]

      China only owns ~25% of the foreign holdings, which is only 23% of the debt, so basically they own ~6% of our debt.

      In the infographic, the "Federal Reserve and US Intragovernmental holdings" is mostly money lent out to print money and Social Security accounts.
      So the government for the past 30+ years has been spending like a drunk sailor (on wars, and corporate welfare)

      • You should be fair about this.
        Most billionaires pay vastly more of their income as a percentage to taxes than you or I do.
        If you want to tighten up the tax code, that's fine, but to say individual rich people are not pulling their share is FUD.

        • Most billionaires pay vastly more of their income as a percentage to taxes than you or I do.

          That would be true if you reversed the meaning entirely, so it is in a very real sense complete bollocks.

    • Because China is at war with the west. It is not just American firms, but Western firms. That includes Canadian, Australian, UK, and all of EU. Everybody thinks that it is in China's best interest to keep us going. Nothing could be further from the truth. You always wiped out an enemies strength when possible to make it easy to invade them later. Ganghis did it. So did Napoleon and the Romans. It works wonders. The real strength of the west has been that we had a mostly diversified and distributed economy a

    • Re: (Score:2)

      by Tarlus ( 1000874 )

      China is not stealing from USA. Thieves and scammers are stealing from people and businesses.

  • I assume if your using 2 factor authentication it prevents you from an attack like this, because the attacker does not have your 2nd factor only your password?
  • It's hard to imagine that we still use things like checks and wire transfers. They are extremely vulnerable to fraud, the banks have made no strides to update a system they know is insecure because it's cheaper for them to let their customers suffer or eat the loss than to update to a secure system. Even credit/debit cards which are cloned all the time are easily protected by switching to smart cards instead of magnetic media, but at least in the US no changes have been made (In Canada I did see places no

    • Re: (Score:2)

      by jandrese ( 485 )
      The banking system seems set up to facilitate fraud sometimes. Every time we hear about a wire transfer, the police have to point out how they're untraceable and any money sent over them is just gone. This sounds insane to me, why aren't there computerized logs of every single transaction? Finding out where money went should be as simple as "ok, it was transferred to , from there it was transferred to , and then to . At the last bank it was withdrawn as cash. With that information, you should be abl

      • Every time we hear about a wire transfer, the police have to point out how they're untraceable and any money sent over them is just gone. This sounds insane to me, why aren't there computerized logs of every single transaction?

        There are. Protip: the police (and banks) lie.

        • Re: (Score:2)

          by jandrese ( 485 )
          Why? I refuse to believe that everybody else in the world is in on the scam. Is it just because it would be work and they're too lazy? It doesn't make sense to me that a bank wouldn't want to get its account back, I mean that is literally money in the bank.

      • The banking system seems set up to facilitate fraud sometimes. Every time we hear about a wire transfer, the police have to point out how they're untraceable and any money sent over them is just gone. This sounds insane to me, why aren't there computerized logs of every single transaction? Finding out where money went should be as simple as "ok, it was transferred to , from there it was transferred to , and then to . At the last bank it was withdrawn as cash. With that information, you should be able to go

    • Well obviously they should stop using wires. Everything is wireless these days, stop using the wires - problem solved!

  • "The FBI said that many of the cases it has seen involve well-known pieces of malware, such as Zeus, SpyEye and others. The amount of money the attackers try to transfer varies from $50,000 up to nearly $1 million"

    Guess this is another cost to add to those Windows TCO numbers....

  • I am very surprised by the lack of controls in some companies. I get magazine subscription form written just like an invoice. I was wondering why, when a friend told me that some companies would routinely mail payments to anything that looks like an official invoice. Also so many company provided cell phone accounts are victims of slamming (adding unauthorized service to a phone bill, mostly things like cheat code alerts for games or apps) and the companies don't even realize it. Some companies with direct

  • Obama's warning.. (Score:5, Informative)

    by HockeyPuck ( 141947 ) on Wednesday April 27, 2011 @11:16AM (#35954066)

    Dear China,

    Please stop or we'll say stop again.

    -Barack

    • Re: (Score:2)

      by McKing ( 1017 )

      That seems more like Don Sideshow's proposed ultimatum to OPEC.

    • So far, Obama is doing more than W/neo-cons did. We are seeing the Yuan rise slowly, while under W it was fixed shortly after it was supposed to be freed. Likewise, W/neo-cons passed tax breaks to send manufacturing to China. Hell, the man even allow weapons tech to flow freely to China.

      • Re:Obama's warning.. (Score:4, Insightful)

        by nedlohs ( 1335013 ) on Wednesday April 27, 2011 @12:47PM (#35955228)

        Do you just make stuff up?

        Under W the yuan moved from 8.27 per USD to 6.84 per USD or a rise of 21%.

        Under Obama it's moved from 6.84 to 6.53 or a rise of 5%.

        of course Obama has had less time, but it wasn't unpegged until mid-2005 and the highest rate of increase was during W's time.

        And of course this isn't really the Yuan slowly rising, it's the dollar falling. Since Obama's been in, sure the Yuan has risen against the US Dollar. But it's fallen aginst the Aussie Dollar, it's fallen against the Euro, it's fallen against the Japanese Yen. It's fallen against the British Pound. And so on and so on. Making your own currency fall is trivial, just print more of it (see QE1 and QE2).

    • Well you know the saying:

      "Don't bite the hand that feeds you."

      and I guess it still goes if that hand every now and again bitch slaps you.

    • Re: (Score:1)

      by Anonymous Coward

      More like -Everyone.

      NOBODY is willing to stand up to China.

      Nobody in the government will stand up to them, regardless of party.
      No companies will stand up to them, because their profits will suffer. (except maybe Google...)
      No consumers will stand up to them, because they like cheap stuff too much.

      China is basically saying "we'll do whatever the hell we want" and everyone lets them get away with it.

  • I'd like more coverage of the DOJ's investigation into energy price manipulation. Specifically more news on Eric Holder's "disturbing information [cnn.com]". We are losing orders of magnitudes more money to that that what a few phony Chinese invoices manage to squeeze out of companies with poor financial controls.
    • The Fed is manipulating the price through quantitative easing. Arrest Bernanke at the press conference along with all the presidents of the federal reserve banks.

  • Meanwhile the FBI spends more time chasing after pot heads, their dealers (because it's illegal and all), people that copy music and movies, and spy on US citizen because the FISA act says they can.

    Chinese people scamming people here? Those 2 over there take care of it but one's on training to learn Chinese and the other is on maternity leave.

    • Re: (Score:2)

      by blueg3 ( 192743 )

      .>Meanwhile the FBI spends more time chasing after ... people that copy music and movies...

      That's almost exclusively done by private companies on the MPAA/RIAA's dime. The FBI is rarely involved (since it's not criminal).

      • No it's done by ICE which doesn't make it any less criminal. Hence why they keep seizing domains and replacing them with http://74.81.170.110/ [74.81.170.110]

        • Re: (Score:2)

          by blueg3 ( 192743 )

          Almost all of those domain seizures are for sites selling counterfeit products or engaged in the sale of copyrighted works. Admittedly, not all of them are. But ICE shutting down major torrent websites and sites that are profiting from counterfeiting or ignoring copyright (which *is* criminal) is a far cry from the FBI "chasing after ... people that copy music and movies".

  • Port cities? (Score:4, Interesting)

    by zalas ( 682627 ) on Wednesday April 27, 2011 @11:20AM (#35954102) Homepage

    The companies used for this fraud include the name of a Chinese port city in their official name. These cities
    include: Raohe, Fuyuan, Jixi City, Xunke, Tongjiang, and Dongning.

    Odd that they'd use the term "port city", as these don't sound like major transportation hubs. What's interesting is that all these places they've named are actually places on or near the border of Russia and China, in Heilongjiang Province.

  • I find it odd that they can't track the actual recipients of all this money. Is it government sponsored? I guess that's all I want to know.

    • Re: (Score:2)

      by hey! ( 33014 )

      Well, that may be harder than it sounds. As zalas pointed out above, the misappropriation of credit is taking place in Chinese cities bordering Russia. They probably have a money laundering scheme that converts that credit into something anonymously negotiable bought from accomplices over the border. By the time you've noticed what's happened, the money has changed hands so many times its in the hands of numerous legitimate businesses and has been for quite a few transactions.

      So what you've got to do is t

  • Yet, China directs their large number of attacks at the west, mostly America, to drain us of cash. Smart on their part.

    I think of all the lovers of that on this site, mostly from the west, who do not think once about the fact that this is backed by the CHINESE GOV.. If the CIA was backing such an operation, these same ppl would be screaming bloody murder and saying that we were in an active war with somebody. Hell, I have seen ppl here support CHina's attack on the west, while being upset about the west's
  • Doesn't seem like such a big deal. Just the 77 million stolen accounts from PSN could be worth about that already.

    So is this just another China = bogeyman propaganda piece?

    11 million is just a rounding error compared to how much the Federal Reserve, investment bankers etc have taken from the US people.

  • Not to worry. Those dollars are coming right back to you good citizens. As a loan, to pay for our Medicare. It's all part of the circle of incompetence.

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