May 2004 Topics
Phishing, Have Something Up Your Sleeve,
Spoliation, Stash House
 

Is someone contacting your customers by copying
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Fraud In Other Words
Professional Jargon and Uncensored Street Slang
By Larry C. Adams, CFE, CPA, CIA, CISA

 

Phishing (Fishing, Carding, Spoofing, Trolling)
Phishing is the mass distribution of e-mail messages with return addresses, brandings, and Web site links that appear to come from major banks, insurance agencies, retailers, Internet service providers (ISPs), online payment services, or credit card companies. The e-mail looks official and is designed to lure a sea of recipients into divulging personal authentication data such as account usernames, passwords, e-commerce account numbers, bank account numbers, mailing addresses, credit card numbers, birth dates, or Social Security numbers. Often the e-mail warns an account may be closed for failing to respond. The logos, forms, and Web pages are copied from companies to look legitimate, but a hacker has altered the underlying source code. The responders are hooked and do not realize their information is transmitted unsecured to a hacker instead of to the company. Up to 5% of the recipients respond to this spam, resulting in identity theft, unauthorized purchases, and financial losses. The word phishing first appeared in 1996 when hackers were stealing passwords from unsuspecting America Online users. Hacked customer accounts are called phish. Hackers routinely trade blocks of good phish accounts for new hack software. Hackers commonly use ‘ph’ instead of ‘f’ in their pseudonyms to acknowledge the original method of telephone hacking with the infamous Blue Box called “phreaking” in the 1970s.
Anti-Phishing Working Group, http://www.antiphishing.org, February 28, 2004.

 

Have Something Up Your Sleeve
To have something in reserve in case of need, such as another scheme, an alternate plan, a bit of testimony or more evidence to use when an original plan is not successful. The original phrase pertained to men’s garments in medieval times. They had no pockets. Essential items were commonly hung from a belt. When sleeves were designed slightly fuller between the wrists and elbows, men discovered that they could conceal a variety of things in their sleeves. Magicians were well known for concealing rabbits and tricks up their sleeves. Gamblers hid aces, chips, and weapons until they were needed in a card game. Sleeves were part of contest-rigging schemes at The Venetian in Las Vegas in 2002. A casino executive hid the winning ticket for a Mercedes-Benz SUV in his sleeve and pretended to draw it randomly. He was attempting to keep a high roller happy who had lost $5 million. The Nevada Gaming Control Board had something up their sleeves too – they fined the hotel casino $1 million for predetermining the winners of drawings and cheating other customers in the charade.
Ralph Siraco, “Big Fine a Warning to Casinos,” Daily Racing Form, http://www.drf.com/news/article/53649.html, February 28, 2004.
Photo: www.ancientcircles.com/clothing/.

 

Spoliation
The destruction of evidence, which constitutes an obstruction of justice. The significant and meaningful alteration of a relevant document to make it invalid or unusable for litigation. The loss of evidence may be intentional, reckless, or negligent, such as the shredding of documents in the Enron case. Sanctions have been imposed in other cases for inadvertently erasing backup e-mail and intentionally destroying electronic records. Courts have the discretion of submitting a spoliation presumption instruction to a jury. Omnia praesumuntur contra spoliatorem is the Latin maxim or general rule advising them that all things destroyed are presumed to be harmful against the spoiler’s case. The Sarbanes-Oxley Act of 2002 requires auditors to retain their audit related documents for five years. The Securities and Exchange Commission (SEC) requires record retention for seven years after an audit is filed.
Jason S. Coomer, “The Impact of Spoliation of Evidence: A Survey of Texas Law,” http://www.texaslawyers.com/coomer/Paperspo.htm, February 28, 2004.

 

Stash House (Drop House)
A house or series of houses rented by a “coyote” or smuggler, who uses them to temporarily hide illegal immigrants secretly brought into the United States from Mexico and raise the price of the scam. A stash house is often located in a quiet, affluent neighborhood where there is less pressure from police surveillance than in a low-income neighborhood. A high wall around the property or a large garage is used to prevent neighbors from watching 80 to 250 undocumented immigrants being unloaded from large trucks or vans at night. The crowded migrants are kept locked inside dirty rooms with no furniture, no water, no electric and no working bathroom. They are fed once a day. Security bars are on the windows. The immigrants and their children are held in the stash house waiting to be transported to other houses in other states by air or road. Typically a smuggler charges $1,500 or more to guide a migrant across the border.  Before an immigrant is moved out of a stash house to another location, the coyote often changes the scheme and demands another $2,500 from the migrant’s relatives.
Channel 12 News, KPNX-TV, Phoenix, Arizona, February 13, 2004.

 

ã Copyright 2004 Larry C. Adams.
All rights reserved.
 

This article is in the May/June 2004 issue of FRAUD Magazine, the Journal of the Association of Certified Fraud Examiners.  Also it is in the July 2004 issue of Bulletin of the Baroda Branch of the Western India Regional Council of the Institute of Chartered Accountants of India.
 

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