NYC Cross-Border Fraud Lawyers

In 2012, President Barack Obama signed the Safe Web Act, which was originally passed in 2006. The Safe Web Act provides United States Federal authorities the power to carry out investigations that concern cross-border fraud that takes place on the Internet. This act will remain in effect until 2020. For the first six years after the act was set in place, it aided in more than 100 investigations, which concerned foreign entities, that were in preparation for cross-border scams. In addition, the investigations yielded more than 50 cross-border cases.

For the prosecution, it can be extremely difficult to pursue a conviction because some of these crimes were allegedly carried out in other countries that are outside of United States jurisdiction. However, United States authorities can extradite individuals who are accused of cross-border fraud under certain circumstances.

Cross-Border Fraud Defined
Cross-border fraud is a general term that can refer to any scam that extends beyond national borders. Between 2006 to 2011, there were an estimated 500,000 individuals in the United States who filed complaints regarding fraudulent transactions, which totaled more than $1.4 billion dollars, that was paid to international businesses. Although fraud scams have different variations, the primary goal for an international scammer is to obtain funds by scheming consumers in the United States.

In most cases, cross-border fraud will involve an individual attempting to get someone to send funds to somewhere outside of the United States. This takes place through transactions that are untraceable and instant, which may include wire transfers that get a person to send goods outside of the United States (where it can’t be recovered). There are numerous ways individuals attempt to facilitate a fraudulent transfer of funds outside the United States. However, it is important to note that when misleading statements are declared that involve material facts about a specific transaction, it could be considered fraudulent behavior.

There are different types of cross-border fraud, but a here are a few of the most common:

Reshipping
When goods are purchased through stolen credit cards or other funds that are stolen and sent to the United States to be repackaged and sold, it is reshipping. Many of the individuals that reship the goods are unaware, as they are under the assumption it is a work from home job that is legitimate, but they are actually taking part in a scam that involves mailing stolen items.

Advance Fee Fraud
This type of fraud typically involves scams that promise to send funds or allow an individual to take part in an exclusive deal, but there is an upfront fee that must be sent in exchange for the goods. When the funds from the upfront fee are wired to the scammer, the expected gift, funds, or deals never arrive, and the victim it out the upfront fee. Many of these scams take place through foreign letters that are fake. In these circumstances, an individual is told that he or she is a winner but must first send the funds to pay taxes or a processing fee for the item.

Mail Order Bride Scams (Romance Scams)
Mail order bride or romance scams are when a scammer will create a false profile and start a romantic relationship with individuals only to ask them to send money. Some of these scammers may ask for funds to purchase an airplane ticket to visit the victim and then never show.

Money Mule Scams
This type of scam is an international fraud set up that takes place when one individual gets funds by cashing a fraudulent check or depositing the check into his or her checking account. Then, the victim will send the funds via wire transfer to the scammer. By the time it is discovered that the check is fraudulent, the scammer will be untraceable, as Money Gram, Western Union, and other methods of wire transfers are untraceable and instant.

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Work at Home Scams
With these scams, individuals are lured through work at home employment opportunities to provide their personal information, which makes them an easy target for identity theft. In addition, these scammers may also ask individuals to send money for employment opportunities that never materialize.

Legal Scenario: What Would You Do?

Scenario

You run an e-commerce business that ships products internationally, and you've just received a letter from the FTC stating that your company is under investigation for cross-border fraud after customers in Canada and the UK filed complaints about deceptive pricing practices on your website. Federal agents have requested access to your transaction records under the Safe Web Act, and you're unsure whether U.S. authorities even have jurisdiction over complaints originating from foreign consumers.

Can U.S. federal authorities really investigate my domestic online business based on complaints from customers in other countries?

Attorney's Answer

Yes — the U.S. SAFE WEB Act (International Consumer Protection Act) specifically grants the FTC expanded authority to investigate and take enforcement action against cross-border fraud schemes, including those conducted over the Internet. Under this law, the FTC can share investigative files with foreign counterparts and receive evidence from international agencies, meaning complaints filed abroad can absolutely trigger a federal investigation here at home. You should not respond to any government requests or turn over records without first consulting an experienced cross-border fraud defense attorney who can assess whether the investigation is properly authorized and protect your rights under the Fourth and Fifth Amendments. Early legal intervention is critical in these cases because cooperating without counsel can inadvertently expose you to both federal charges and parallel enforcement actions in foreign jurisdictions.

This is general information only. Contact us for advice specific to your situation.

Penalties for Cross-Border Fraud
The United States government has the authority to press charges that result in severe criminal penalties in the instance cross-border fraud takes place. However, the government has difficulty with these cases because it can be difficult to gain jurisdiction from foreign countries to arrest scammers.

Federal criminal offenses come with serious penalties for convictions that involve fraud, which is especially true when wire services or postal services are used for fraudulent behavior. If an individual is charged with mail fraud, the or she could face a prison sentence that is up to 20 years, and there is a maximum prison sentence of 30 years for those found guilty of fraudulent behavior that involves a financial institution.