(My comments included)

Bellingham police are alerting local business owners and employees to a phone scam targeting several area restaurants. The first incident occurred late Thursday afternoon when a local restaurant manager spoke by phone to a man who identified himself as a Deputy for the Sheriff’s Office. The caller told the manager that an employee had been arrested for DUI and was in the Whatcom County Jail.

The caller told the manager that he could not disclose the name of the employee but can confirm the name if the manager offered one. (What’s wrong with THIS picture? JS)

After the manager gave out several names, one was confirmed by the caller as the one in jail.

The caller told the manager that if he wired $700.00 to a bail depository in Portland Oregon, the employee would be released.  In at least one case, the manager wired the money.  At this time, several other complaints have been received but no other losses reported.

The Sheriff’s Office does not solicit bail for inmates. Anyone can verify if someone is in custody in the Whatcom County Jail by calling (360)676-6848.  If you have been a victim of this scam please call 9-1-1 to file a report.

The fact that the phony deputy did not offer the name of the arrested person is a big red flag. The caller was obviously fishing for a name. The names of arrested persons are public information, and besides verifying an arrest by phone, as the police suggest, you can also check out the Whatcom County Jail online.

There is an online jail roster, as well as a list of people booked each day.

I am saddened to learn that somebody fell for this. They violated my favorite rule: Don’t wire money anywhere based on a phone call or email from somebody you don’t know.

]]> http://blogs.bellinghamherald.com/consumer/?feed=rss2&p=894 http://blogs.bellinghamherald.com/consumer/?p=885 http://blogs.bellinghamherald.com/consumer/?p=885#comments Wed, 18 Nov 2009 18:21:00 +0000 john http://blogs.bellinghamherald.com/consumer/?p=885 The regional office of the BBB warns us to beware of unscrupulous repair contractors and bogus charities that seem to follow in the wake of bad weather:

DuPont, Wash. – Nov. 17, 2009 – Western Washington residents may be feeling panicked and powerless as storms, high winds and floods destroy homes, buildings and other property.
Better Business Bureau cautions homeowners, businesses and charity donors that faux charities solicit donations and fly-by-night repair companies seek to take advantage of those in need during times of natural disaster.
BBB serving Alaska, Oregon and Western Washington suggests doing research before hiring a soliciting contractor to help with disaster-relief:
Be wary of bad businesses. Don’t get lured in by quick pitches or fancy advertisements. Be skeptical of businesses that expect full payment up-front, show up at the doorstep with “left-over” supplies from the neighbors’ projects, provide references that can’t be verified or offer special discounts available only upon immediate purchase.
Compare companies. Thoroughly check out companies before hiring one to perform repairs on flood-damaged property. Collect bids, references and proof of licensing before making the decision. Make sure the contractor is properly licensed, bonded and insured. The Washington State Department of Labor and Industries can help determine if a contractor’s license is required.
Utilize BBB. During times of disaster, consumers should take steps in advance to ensure that they are only hiring legitimate and reliable companies. Find free BBB Reliability Reports on contractors, repair providers, and restoration service companies at www.bbb.org.
Get a set price in writing. Obtain an itemized estimate before any work is performed. Negotiate a payment plan and avoid paying for the entire service up-front.
BBB suggests the following tips before donating to soliciting charities that claim to offer disaster-relief aid:
Choose a reliable charity. Be suspicious of charities that accept only cash as payment, refuse to provide a contribution receipt or solicit door-to-door without identification. Don’t give money on the spot or give into demands for an immediate donation.
Donate wisely. Find free BBB Charity Review Reports at www.bbb.org/charity. BBB’s Charity Review Reports include information on how an organization is governed, ways it spends money, truthfulness of its representations, and its willingness to disclose basic information to the public. BBB’s Charity Review Program is a free service provided by BBB Foundation to assist potential donors in finding reliable local charities and organizations.

I took some comfort from this little AP story out of North Dakota, where some retail employees spotted the scam and managed to convince one grandma to hang onto her cash. These employees went well out of their way to help this woman and foil the crooks.

Also of note:  Walmart trains its employees to be alert for these kinds of scams.

JAMESTOWN, N.D. (AP) - Jamestown police are praising employees of two stores who kept a woman from getting scammed out of $2,700 by refusing to allow her to wire money to Canada.

Police say 84-year-old Bernice Wipperling of Carrington was told her grandson needed money to get out of a Canadian jail.

Wipperling said she and her husband, Wilfred, withdrew the money, drove to Jamestown and headed to a Walmart Supercenter. But employee Christina Butts refused to wire their money. Butts said the employees are trained to try to protect people who appears to be victims.

The Wipperlings then drove to Hugo’s grocery store in Jamestown. Butts called Chasta Mansavage, the Hugo’s office manager, to warn her.

Mansavage said she told the Wipperlings their grandson probably was not even in Canada. They then called their daughter, who confirmed their grandson was in school in Fargo.

It sounds like a pretty broad study, with data on more than 600,000 cases.

For the uninitiated–including me until about 90 seconds ago–ACH stands for Automated Clearing House, and businesses use it for many kinds of transactions, such as direct deposit of employee paychecks.

This is just another example of the danger involved in responding to an email that seeks sensitive financial information, especially when you are provided with a link to a website. This one is apparently more sophisticated than most, with a bogus website that looks real, and an email that does NOT contain the usual ludicrous misspellings and grammatical mistakes that often make these scams rather easy to detect.

Be on guard, and warn your business associates and employees where appropriate.

More to follow.

WASHINGTON (AP) - The swift acquittal of two Bear Stearns executives in the government’s criminal case tied to the financial meltdown likely will force prosecutors to rethink the evidence they planned to present in a raft of cases that have yet to go to trial, legal experts say.

Criminal cases may be percolating against executives at fallen mortgage lender Countrywide Financial Corp. and bailed-out insurance giant American International Group Inc., among others. The Bear Stearns acquittals show how tough it can be to prove that bank executives committed fraud by lying to investors.

The government must show that executives were actually committing fraud and not simply doing their best to manage the worst financial crisis in decades, said Michael Levy, a white-collar defense attorney at Bingham McCutchen in Washington. Jurors were not swayed by e-mails the government presented in the Bear Stearns case.

Fraud is “a very difficult theory for the government to prevail on in the context of an unprecedented financial crisis,” Levy said.

Federal prosecutors and the Securities and Exchange Commission have launched wide-ranging investigations of companies across the financial services industry. But a year after the crisis struck, charges haven’t yet come in most of the probes. The investigations also are targeting government-owned mortgage financers Fannie Mae and Freddie Mac and crisis casualty Lehman Brothers.

The Bear Stearns case was the second case to go to trial, following the conviction in August of a former Credit Suisse broker on conspiracy and securities fraud charges in connection with a $1 billion subprime mortgage fraud.

That’s a sharp contrast to the 2002 corporate accounting scandals that engulfed Enron, WorldCom and other companies. Back then, “perp walks” seemed to occur almost daily, and news conferences brought announcements of charges against a series of executives and high-profile  individuals.

Tuesday’s not-guilty verdict dealt a setback to the Justice Department. It “will cause prosecutors to rethink any future cases related to the financial meltdown,” said Robert Mintz, a former federal prosecutor who is a private defense attorney.

The Justice Department “remains committed to following the facts and the evidence where they lead,” spokeswoman Laura Sweeney said Wednesday. “If we believe the actions of individuals or companies were criminal, we will pursue those cases aggressively.”

The two Bear Stearns executives, Ralph Cioffi and Matthew Tannin, ran hedge funds that collapsed after betting heavily on the shaky subprime mortgage market. The jurors in federal court in Brooklyn, N.Y., acquitted the pair of conspiracy and other charges in an alleged scheme that cost investors about $1.6 billion.

The jurors said they decided that e-mail evidence presented against Cioffi and Tannin was contradictory and taken out of context and that the executives were blamed for a market cataclysm beyond their control.

The e-mails written by the two showed anxiety over the slide in the subprime market and what it could do to the hedge funds’ investments. Jurors said they didn’t prove intent to deceive investors.

In a panicky situation where circumstances shifted by the hour or minute, the e-mails could have conveyed “mixed messages” to a jury, Mintz said. In future cases, prosecutors will have to take care to present “clear and unambiguous evidence of wrongdoing and concealment,” he added.

The SEC, for its part, sued the two Bear Stearns executives in a civil action last spring. That case is expected to proceed.

“We of course respect the criminal verdict. But at this time we expect to go forward with litigating our civil action,” SEC spokesman John Nester said.

The burden of proof in civil litigation is lower than that for criminal cases. Some experts believe a civil case against the executives may have a better chance of success.

E-mails brought to light in the SEC’s civil fraud case against Countrywide CEO Angelo Mozilo and two other former executives of what had been the biggest U.S. mortgage lender showed their awareness that the high-risk subprime loans being sold were toxic and flirting with failure.

Mozilo, named in the SEC’s lawsuit filed in June, is the most high-profile individual to face charges from the government in the aftermath of the financial meltdown. He has denied any wrongdoing.

Jacob Frenkel, a former federal prosecutor and SEC enforcement attorney now in private practice, said the Countrywide case “will be a very interesting test based on” the Bear Stearns verdict.

In another meltdown-related case, the SEC is pursuing civil charges against Bank of America Corp. over billions in bonuses paid at Merrill Lynch, which it acquired in a hastily arranged deal at the height of the crisis. The agency accuses the bank of failing to disclose to shareholders that it had authorized Merrill to pay the bonuses even though the investment bank had lost $27.6 billion in 2008.

Bank of America had agreed to pay $33 million to settle the charges but a judge threw that out and the case is headed to trial.

Thomas Gorman, a former senior counsel in the SEC’s enforcement division now in private practice, says the jury’s rejection in the Bear Stearns case “strongly suggests that the government reassess the line of demarcation between criminal and non-criminal conduct” in bringing charges in business cases.

Prosecutors have “extremely wide latitude” in leveling criminal charges, Gorman wrote on his blog Wednesday. “In exercising that authority it is critical that the government not overreach and criminalize conduct which, at best, may be on the margin.”

Hardly any of these stories are of any real use to the consumer blog, but many of them are amusing. This has been one of them:

WILKES-BARRE, Pa. (AP) - Authorities say a northeastern Pennsylvania barber was taking a little off the top at the county’s expense.

Robert M. Licata is charged with stealing almost $6,000 from the Luzerne County Correction Facility by claiming he gave an inflated number of inmates haircuts.

The 52-year-old barber was charged Tuesday with theft by deception and tampering with public records. Investigators say he turned in falsified haircut sign-in sheets that cost the county $5,982 over a two-year period.

Licata, of West Pittston, was paid $6 per haircut by the county. Authorities say he would turn in a sign-in sheet and be cut a check.  (Hmm. This guy claimed 997 extra haircuts, and nobody noticed?–JS)

Prison officials say a system to verify haircuts has been put in place. (This is my favorite part of the story, but I wish the reporter had explained how this system works…JS)

Licata is free on bail. A telephone listing for him could not immediately be located Wednesday. (Darn. I know the feeling. A good quote from him would have livened up the end of the story quite a bit, too.–JS)

NEW YORK (AP) - Two Bear Stearns executives who ran hedge funds that crashed in 2007 amid the subprime mortgage meltdown were acquitted Tuesday of lying to investors about the looming crisis on Wall Street.

Jurors found Ralph Cioffi and Matthew Tannin not guilty of conspiracy and other charges in an alleged fraud that cost 300 investors about $1.6 billion and nearly caused the demise of Bear Stearns itself. The firm barely avoided bankruptcy in a rescue buyout by JPMorgan Chase & Co. The jury began deliberating on Monday.

Both men had been charged with three counts of securities fraud and two counts of wire fraud. Cioffi was also charged with insider trading.

Tannin left the courtroom without comment. Cioffi said only, “I’m happy.”

During a monthlong trial in federal court in Brooklyn, prosecutors relied on a series of e-mails they alleged revealed behind-the-scenes alarm at the hedge funds as investments in complex, high-risk securities tied to the subprime market began to slide.

“The subprime market looks pretty damn ugly,” Tannin wrote to Cioffi in April 2007. If Bear’s internal reports were accurate, Tannin suggested, “I think we should close the funds now,” and “the entire subprime market is toast.”

The situation became so dire that Cioffi pulled $2 million of his own cash from the fund, but the pair still told investors that they should stay in and that the outlook was good, prosecutors said. He also was accused of hiding news that one worried investor had decided to pull out $57 million from the funds.

Based on a credit analysis, “there’s no basis for thinking this is one big disaster,” Cioffi told investors in a recorded conference call with investors that was played for jurors.

The defendants “lied to their investors. They defrauded their investors. The misled their investors,” prosecutor James McGovern said in his closing argument. “And it’s time for them to be held accountable.”

Defense attorneys sought to convince the jury that the e-mails were taken out of context. Cioffi and Tannin, they said, had no motive to steer investors off a cliff, and were honest with them about the volatility of the market.

Prosecutors failed to show that the managers “knew what the future held and they hatched a criminal scheme to lie to investors,” Cioffi’s attorney, Susan Brune, said in closing arguments.

Added Brune: “This is a case that is built on hindsight bias.”