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Common Fraud Scams
Fraud is a Growing Problem in Modern Times
Annually, thousands of individuals are victims of different forms of fraud. With the increasing prominence of the Internet and the sheer volume of personal information that gets uploaded to the web, it has become so much easier for criminals to prey on victims. As such, this has ended up in an increased governmental focus on ending common fraud scams as well as heavier pressure to prosecute scammers. Unfortunately, all over the United States, there are also far too many individuals wrongfully convicted of being involved in a fraud scam.
In the event that a federal prosecutor has charged you with a fraud crime, make sure to get in touch with a defense attorney who has experience with federal fraud crime cases.
Identity Theft Scams
Identity theft is potentially one of the most frequent of all the fraud scams. This crime affects roughly 15 million Americans annually. In general, identity theft entails the taking of another person’s identity in order to commit fraud or another criminal act. Some common methods of identity theft are:
- Forgery
- Check forgery
- Counterfeiting
- Mail fraud
- Cyber scams and phishing
- Medical identity theft
In general, before a person is charged with identity theft, he/she comes under investigation by either state or federal prosecutors. An alleged crime(s) that may have occurred across state lines has a higher chance of being dealt with by federal prosecutors from the investigation stage and on. Because of this, it is highly recommended to contact a criminal defense lawyer who is well skilled in both state and federal court right away when you learn that you’re under investigation.
Case Study: The Nigerian Letter and Advanced Fee Fraud
The Nigerian letter fraud scam, also referred to as “419” fraud, combines impersonation fraud with a variation of an advanced fee con. The “advanced fee” con entails someone promising a reward to the target, but the “target” must pay a fee before he/she can receive that reward. Frequently, this type of fraud involves a person posing as a self-proclaimed government official or a member of royalty attempting to transfer money out of Nigeria, and saying that to do so, the target needs to provide bank account information or make a small money transfer.
Some characteristics of “419” or other advanced fee scams include:
- A promise to send you money or products
- An offer to permit your participation in a special deal
- A request to assist in removing money from a country in political turmoil
- A promise to find financial arrangements
Health Insurance Fraud or Health Care Fraud
There are a number of situations that might constitute healthcare or health insurance fraud. These can include medical equipment fraud, “rolling lab” scams, services not performed schemes, and Medicare fraud. Since health care and health insurance, in a general sense, can be rather complex and convoluted, it can be fairly simple for even intelligent and diligent people to unwittingly take part in this kind of fraud. For example, the victim might be tricked into signing a blank insurance form or giving a blank authorization form to a health provider to bill for services.
Ponzi and Pyramid Schemes
Ponzi and pyramid schemes can be extremely complex and, often, such schemes can involve large dollar amounts and/or a large number of victims. In both of these kinds of scams, the con artist pays out dividends or other shares (like in an investing setting) to earlier victims in order to create a facade of legitimacy. In simpler terms, the funds that the victim invests is used to finance the dividends for an earlier investor. As such, the victim’s funds do not go towards any investment as promised.
Market Manipulation Fraud
Market manipulation is frequently referred to as a “pump and dump” scheme. In this scheme, the fraud perpetrator(s) create artificial buying power for a particular security. The offenders then artificially inflate the trading volume for the security to bring its price up higher. This is part of the scheme that is known as the “pump.” When the security hits a certain price level, the offenders quickly sell off their shares of the security (the “dump”) to earn illicit gains at the expense of third-party investors.