Reshipping Schemes: Where Credit Card Thieves Get Help from the Lonely and the Unemployed

Scott Moritz - Protiviti NY 2013 (hi res)

 

by Scott Moritz
Managing Director – Leader, Protiviti’s Investigations and Fraud Risk Management Practice

In recognition of the Association of Certified Fraud Examiners and International Fraud Awareness Week, Protiviti, whose practitioners include over 100 members of the ACFE, is releasing a series of tips on fraud awareness to assist the ACFE in communicating the many ways that fraud can affect your organization. We also suggest proactive steps you can take to better position you and your organization in the ongoing fight against fraud.

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Nigerian fraudsters are some of the most ingenious financial criminals in the world. “Nigerian Letter” or “419 Fraud” is arguably the longest running, most lucrative fraud scheme in existence.

You may not know them by these names, but over time, you undoubtedly have received dozens of emails from the heir of a recently deceased Nigerian government minister who has spirited away millions of dollars and wants to deposit the money in your checking account. Or maybe he wants to send you lottery winnings for a lottery you didn’t enter.

Indeed, the Great Barrier Reef is to great white sharks as Nigeria is to fraudsters. The latest highly successful scheme that comes to us from Nigeria is “the Reshipper Scheme.” Fraudsters either place employment ads online for people who want to work at home part-time or pretend to be looking for relationships on an online dating site. With the part-time ads, the fraudsters have job candidates complete applications that require them to provide their personal details, including name, social security number, date of birth and home address.

In the case of dating websites, the fraudsters establish fake profiles online and strike up conversations pretending to be potential matches. Over the course of one or more exchanges via a dating website’s chat, email or instant messaging function, they elicit personal information – most importantly, a home address. While they are cultivating these relationships, their co-conspirators are stealing credit card numbers and using them to buy products from online clothing, luxury goods or electronics retailers, and having them shipped to the addresses they recently elicited from the fake employment ads and from interacting with unwitting accomplices on online dating sites.

The fraudsters will contact the unwitting recipients of the stolen goods and either provide them with shipping labels or a stolen credit card number to use to reship the goods. Sometimes they are requested to ship directly to an address in Nigeria or somewhere in West Africa. Other times they are requested to send the package to a shipping company in a major city, which in turn will fill a container with the proceeds of multiple, smaller reshipments and ship it to Nigeria.

Another variation of this scheme also utilizes unwitting victims (who sometimes become witting accomplices). But instead of using stolen credit cards to purchase goods online, fraudsters instead email fraudulent purchase orders that appear to represent legitimate requests to buy products from wholesalers, but direct that the shipments be sent to an address that has nothing to do with the company whose name is on the fraudulent purchase order. Instead, the fraudulent purchase order directs that the goods be sent to the address of one of the unwitting accomplices, who either believe that this is part of their new work-at-home job or that they are doing a favor for their new friend whom they met on a dating site.

Individuals should be very wary of anyone they meet online via job advertisements or dating websites who request that they agree to receive deliveries to their home or place of business and then resend the merchandise to another location. This very likely is property that is either the proceeds of credit card, mail or wire fraud. It could result in you being held responsible for the value of the stolen goods and possibly held liable for the underlying criminal offense of receiving stolen property.

In addition, companies that ship goods via purchase order should consider taking a number of steps to verify the legitimacy of purchase orders received, including:

  • Contact the company directly (not utilizing the contact information on the purchase order) and seek to confirm the legitimacy of the purchase order (including the number on it) and the shipping address.
  • Research the names of the parties, phone numbers and “ship to” addresses to determine if they are identifiable with the company named on the purchase order and/or if the addresses, names or phone numbers are private homes, motels, known mail drops, or other locations that are unlikely shipping destinations.

Remember, if something sounds too good to be true, it probably is.

Editor’s Note: Scott Moritz and Protiviti Director Peter Grupe recently hosted a webinar titled “Internal Investigations for Non-Investigators.” You can view the webinar here.

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