Thursday, November 30, 2023

DOJ must tackle the scourge of online scams

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Last week the Federal Bureau of Investigation published its annual internet crime report and internet fraud figures were both predictable and worrying.

It was another banner year. The office received 791,790 complaints of “Internet crime” in 2020 (a 69% increase from the previous year), representing more than $ 4.1 billion in reported losses (a 20% increase ). These complaints included a wide range of crimes, such as phishing, identity theft, extortion, data breaches and identity theft. Collectively, they represent further evidence of the Department of Justice’s long-standing failure to effectively prosecute internet fraud.

From the beginning of the pandemic, the scope and frequency of this criminal activity has significantly worsened. Online fraudsters have stolen government relief checks, sold fake test kits and vaccines, and exploited the selfless impulses of the American public through bogus charities. But this broader failure has caused untold harm to the American public for years, including those of our most vulnerable and less tech-savvy populations, such as the elderly. The most recent FBI report makes it clear that the government needs to dramatically step up and rethink its approach to combating Internet fraud – including how it is tracking this problem, as well as how it can punish and deter these crimes more effectively in the world. ‘to come up.

For two decades, FBI internet crime figures have been constantly increasing. Moreover, these numbers probably underestimate the actual amount by several orders of magnitude. There are two reasons for this: First, the government does not conduct surveys to collect data on the prevalence of financial fraud as it does for other crimes. And second, fraud in general is a notoriously under-stated crime, because many people are embarrassed to report that they have been duped.

I know these problems well. While working at the Department of Justice, I led the prosecution of a massive Internet fraud launched from Israel that assaulted people around the world by fraudulently marketing financial instruments called “binary options”. Tens of thousands of people have lost a total of approximately $ 145 million. It wasn’t easy, but in 2019, thanks in no small part to the work of two dedicated FBI agents over two and a half years (and a bit of luck), we were able to condemned Lee Elbaz, the CEO of the company, with lower level participants. Unfortunately, these results are far too rare.

One of the main reasons internet fraud remains such a persistent and thorny problem is that the Justice Department has never made it a real priority, in part because these types of cases are not particularly attractive. for prosecutors. Losses to victims on an individual basis tend to be relatively small and widely dispersed. Much of this crime comes from overseas as well, and it can be difficult and bureaucratically time-consuming to obtain evidence from foreign governments, especially from countries where these scams include a large de facto industry which employs many people. It is also much more difficult to find and obtain co-operative inside witnesses when the perpetrators are beyond our borders. And even in the best-case scenario, the large body of documentary evidence involved in fraud cases can be extremely difficult to collect and review. If you can overcome all of these obstacles, you may have to face years of extradition litigation before anyone sees inside a courtroom. To make matters worse, much of the press does not view these cases as particularly newsworthy – in itself a symptom of how internet fraud has become common – and prosecutors like be in the press.

The situation worsened under the Trump administration. According to Syracuse University’s Transactional Records Access Clearinghouse, the number of prosecutions for “white collar crime” – including internet fraud –Many times fell to All the time low during those four years. And like a lot of the federal government under Trump, the Justice Department’s anti-criminal fraud efforts became even less effective, while unqualified and sometimes incompetent officials took over and mismanaged them.


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