#AceNewsReport – Oct.23: These scams can look a few different ways. In one version, scammers offer to “refund” you for an unauthorized purchase but “accidentally transfer” more than promised. They then ask you to send back the difference.
#AceDailyNews FTC Report: Amazon impersonators: So what you need to know according to the FTC’s new Data Spotlight, since July 2020, about one in three people who have reported a business impersonator scam say the scammer pretended to be Amazon……
Acting Associate Director, Division of Consumer Response and Operations : October 20, 2021: Maria Mayo
What really happens?
The scammer moves your own money from one of your bank accounts to the other (like your Savings to Checkings, or vice versa) to make it look like you were refunded. Any money you send back to “Amazon” is your money (not an overpayment) — and as soon as you send it out of your account, it becomes theirs. In another version of the scam, you’re told that hackers have gotten access to your account — and the only way to supposedly protect it is to buy gift cards and share the gift card number and PIN on the back. Once that information is theirs, the money is, too.
Here are some ways to avoid an Amazon impersonator scam:
Never call back an unknown number. Use the information on Amazon’s website and not a number listed in an unexpected email or text.
Don’t pay for anything with a gift card. Gift cards are for gifts. If anyone asks you to pay with a gift card – or buy gift cards for anything other than a gift, it’s a scam.
Don’t give remote access to someone who contacts you unexpectedly. This gives scammers easy access to your personal and financial information—like access to your bank accounts.
If you think someone has gotten access to your accounts or personal information, visit IdentityTheft.gov. There, you’ll find steps to take to see if your identity has been misused, and how to report and recover from identity theft.
#AceNewsReport – Sept.23: Officers yesterday we arrested a man on suspicion of using the tactic to talk his way inside a 95-year-old woman’s Allesley home last month……
#AceDailyNews reports that recently WM Police officers urged everyone in the area to be vigilant against so called ‘Nottingham Knockers’ – scammers who go door-to-door pretending to be selling homewares but who are looking for an opportunity to sneak inside and steal…….For more safety advice go to this section of their website.
20th September 2021
The trusting woman opened her door to a man on 27 August at around midday. He was offering things like cloths and tea towels for sale.
He then claimed to be thirsty and when the woman went to get him a glass of water he sneaked inside and swiped her purse. He even drank the water before leaving with her cash and cards.
Yesterday our officers spotted a man in Walgrave Road who we’d been looking for in connection with the offence.
He tried running off but they arrested him in back gardens.
A 42-year-old man has now been charged with burglary and is due in court this afternoon.
We’re also really keen to hear from any residents who may have experienced this type of con in recent weeks.
The scam involves the offender suggesting they’ve been released from prison and are trying to turn their life around as a salesperson offering housewares to residents.
If you believed you’ve been targeted then please get in touch. Call us on 101 or message us via Live Chat through our website.
#AceNewsReport – Aug.26: The indictment alleges the defendants were members and associates of a criminal enterprise that defrauded elderly Americans by making them falsely believe that a grandchild (or other close relative) was in trouble and needed their help. The elderly victims each paid thousands to tens of thousands of dollars to the criminal organization in this scheme…..
#AceDailyNews reports that Multiple Defendants in ‘Grandparent Scam Network Indicted for Racketeering Conspiracy’ charging the defendants with conspiracy under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Click to view the indictment.
Six defendants have been arrested – Timothy Ingram aka Bleezy, 29, of North Hollywood, California; Anajah Gifford, 23, of North Hollywood, California; Joaquin Lopez, 45, of Hollywood, Florida; Jack Owuor, 24, of Paramount, California; Tracy Glinton, 34, of Orlando, Florida; and Lyda Harris, 73, of Laveen, Arizona. Two additional defendants – Tracy Adrine Knowles, 29, and Adonis Alexis Butler Wong, 29, who each resided in Florida during the alleged offense – have also been charged.
“These defendants were part of a large network of individuals that systematically targeted elderly Americans by preying on their concern for loved ones,” said Deputy Assistant Attorney General Arun Rao for the Justice Department’s Civil Division. “The Department of Justice is committed to prosecuting individuals who take part in such schemes that target vulnerable people. We are grateful to our partners at the U.S. Attorney’s Office in the Southern District of California and the FBI in advancing the Department’s efforts against organized elder fraud, and to the San Diego County District Attorney’s Office.”
“This scheme has left many elderly victims financially and emotionally devastated,” said Acting U.S. Attorney Randy Grossman for the Southern District of California. “It is unconscionable to target the elderly and exploit their love for their grandchildren. Elder fraud is a serious crime against some of our nation’s most vulnerable citizens. We are committed to combating all types of elder abuse in our community.”
“Elder Fraud is a massive and growing problem, as our county’s population gets older, with losses into the billions of dollars nationwide,” said Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office. “The San Diego Elder Justice Task Force was set up to combine resources, experience, and capabilities to have a sophisticated and coordinated law enforcement response to fight this battle.”
According to the indictment, the defendants were members and associates of a network of individuals who, through extortion and fraud, induced elderly Americans across the United States to pay thousands to tens of thousands of dollars each to purportedly help their grandchild or other close family relatives. According to statements made by prosecutors in court, the defendants swindled more than $2 million from 70-plus elderly victims across the nation, with at least 10 in San Diego County. The perpetrators contacted elderly Americans by telephone and impersonated a grandchild, other close relative, or friend of the victim. They falsely convinced the victims that their relatives were in legal trouble and needed money to pay for bail, medical expenses for car accident victims, or to prevent additional charges from being filed. The defendants and their co-conspirators received money from victims via various means, including in-person pickup, mail, and wire transfer, and laundered the proceeds, including through cryptocurrency.
The case was investigated by the San Diego Elder Justice Task Force, which is a collaboration between the U.S. Attorney’s Office, the FBI, the District Attorney’s Office and all San Diego County law enforcement agencies. The Elder Justice Task Force was officially launched in February 2020 and is believed to be the first comprehensive local law enforcement effort for this purpose anywhere in the country.
A number of law enforcement agencies and offices across the country have investigated components of the scheme, including the FBI’s field offices in Cleveland, Dallas, Los Angeles, Miami, Orlando, and San Francisco; the Dallas Police Department; and police departments across several states, including the Jacksonville Police Department in Alabama; the Anaheim Police Department, Burbank Police Department, Carlsbad Police Department, Downey Police Department, El Cajon Police Department, Garden Grove Police Department, Huntington Beach Police Department, Nevada County Sheriff’s Office, Oceanside Police Department, Pasadena Police Department, Riverside County Sheriff’s Department, San Diego County Sheriff’s Department, San Diego Police Department, San Francisco Police Department, Santa Monica Police Department, and Ventura County Sheriff’s Office in California; the Dalton Police Department and Spalding County Police Department in Georgia; the Lee County Sheriff’s Department in North Carolina; the Akron Police Department, Cleveland Division of Police, and Sagamore Hills Police Department in Ohio; the Carmel Police Department in Indiana; the St. Joseph Sheriff and Troy Police Department in Michigan; the Fergus Falls Police Department in Minnesota; the New York State Police and Suffolk County Police Department in New York; and the Colleyville Police Department, City of Fair Oaks Ranch Police Department, Grand Prairie Police Department, and Richardson Police Department in Texas. The U.S. Attorneys’ Offices in the District of Arizona, Central District of California, Middle District of Florida, Western District of North Carolina, and Northern District of Ohio provided assistance in the investigation.
Trial Attorneys Lauren M. Elfner and Wei Xiang with the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Oleksandra Johnson of the Southern District of California are prosecuting the case.
The Consumer Protection Branch coordinates the department’s Transnational Elder Fraud Strike Force, working with U.S. Attorney’s Offices and law enforcement agencies to investigate and prosecute scams run by transnational criminal organizations, including mass mailing, telemarketing, and tech support scams. For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch
An indictment merely contains allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
#AceNewsReport – Aug.22: Scammers are impersonating FTC Chair Lina Khan in a new phishing scheme. The email says the FTC wants to send you Coronavirus relief funds and tells you to send some personal information, like your name, address, and date of birth. The FTC is not distributing Coronavirus economic stimulus or relief money to people.
#AceNewsReport – Aug.18: Over £63m was lost nationally by victims of investment fraud who referred to a social media platform in their report to Action Fraud, the national reporting centre for fraud and cyber crime. Some victims mentioned being approached directly by an investment fraudster, whilst others said they were attracted to a fake investment through adverts…..
#AceDailyNews reports that Superintendent Sanjay Andersen, from the City of London Police’s National Fraud Intelligence Bureau, said: New figures reveal victims lost over £63m to investment fraud scams on social media
“Reports of investment fraud have increased significantly since the start of the coronavirus pandemic, which is unsurprising when you think the vast majority of us have had to conduct nearly every aspect of our lives on a computer or mobile phone.
“Being online more means criminals have a greater opportunity to approach unsuspecting victims with their scams. We would encourage anyone thinking about making an investment to do their research first. Visit the FCA’s website and check and double check every detail before handing over your money or personal details.”
During a 12 month period, 5,039 reports of investment fraud made reference to a social media platform, with 44.7 per cent of reports stating the fake commodity they had been scammed into investing in was a type of cryptocurrency. In the reports, Instagram was the most referenced platform (35.2 per cent), followed by Facebook (18.4 per cent).
The City of London Police says the use of social media by criminals is helping to buck the trend for typical investment fraud victims, with under 30s being most affected. Specifically, 27.5 per cent of all investment fraud victims who mentioned social media in their report were aged 19-25, and 61 per cent were men. By contrast, when looking at investment fraud reports where social media didn’t play a factor in the scam, the average age of victims was over 50.
Criminals are also using social media influencers to carry out their scams, exploiting the brand image and reputation of well-known individuals without their knowledge and advertising bogus celebrity endorsements.
Fraudsters present professional and credible looking online adverts, send emails, and create websites to advertise fake investment opportunities in cryptocurrency, foreign exchange trading and bonds. Often, fake testimonials are accompanied with a picture of a well-known figure to help the investment seem legitimate. Between April 2020 and March 2021, Action Fraud received over 500 investment fraud reports which made reference to a bogus celebrity endorsement, with losses reaching over £10m.
Another common trend seen by crime analysts at the City of London Police’s National Fraud Intelligence Bureau, relates to cloned company investment fraud, where criminals will copy the branding of legitimate investment companies to trick people into handing over money. Some reports even mentioned seeing LinkedIn profiles for the broker who had approached them, which helped persuade them that the offer was legitimate.
The force teamed up with the Financial Conduct Authority and the National Economic Crime Centre to warn the public about cloned company investment fraud in January. However, a recent report identified that 8 per cent of all cloned company fraud victims had initiated contact with the suspect following a direct approach, or after seeing an advert, on a social media platform. Whilst the average victim age for cloned company fraud overall was found to be 60 years, this nearly halved amongst those who referenced a social media platform in their report.
How to protect yourself from investment fraud
Be suspicious if you are contacted out the blue about an investment opportunity. This could be via a cold-call, an e-mail or an approach on social media.
Don’t be rushed into making an investment. No legitimate organisation will pressure you into making a transaction, or committing to something on the spot. Take time to do your research.
Seek advice from trusted friends, family members or independent professional advice services before making a significant financial decision. Even genuine investment schemes can be high risk.
Use a financial advisor accredited by the Financial Conduct Authority. Paying for professional advice may seem like an unnecessary expense, but it will help prevent you from being scammed.
#AceNewsReport – June.11: Scammers may say your tax returns must be done differently because of a name change — and they need your Social Security number to fix it. For recently married people, or someone going through gender reassignment and a name change, the excuses scammers use might make sense. But wait right there. Scammers are just phishing for personal information they can use to steal your identity or take your money:
SCAM ALERT: How to spot a government impersonator scam: For Pride Month, the FTC wants the LGBTQ+ community to know about government imposter scams and how to avoid them: Government imposters may call to “verify your Social Security number,” or say your Social Security number or Medicare benefits have been “suspended” due to a mix-up.
June 9, 2021by
Consumer Education Specialist, FTC
So how do you spot it and stop it? Here’s what to know:
Scammers call, email, or text you for money or information. But the government won’t. Anyone who calls, emails, or texts, asking for money or personal information and claims to be from the government is a scammer. Hang up and don’t respond to messages.
Scammers tell you how to pay — usually by wiring money, cryptocurrency, or gift card. Nobody legit will ever tell you to pay in any of those ways. If they call, hang up the phone. If they email, text, or message you, don’t click on any links. It’s a scam.
Even if your caller ID says it’s from the government, it could be a scam. Caller ID can be faked. Even if it shows the government agency’s real phone number, or even if it says something like “Social Security Administration,” it could be anyone calling from anywhere in the world. Don’t trust it.
#AceNewsReport – May.29: But some activities might require you to show that you’ve been vaccinated or had a recent negative #COVID19 test. How you do that may depend on the activity and where you live.
FTC SCAM ALERT: Scammers cash in on confusion over vaccine verification methods: Right now, there’s no standard way to prove you’ve been vaccinated or tested negative. Sure, there are those CDC #COVID19 vaccination cards people get when they get their vaccine.
May 28, 2021by
Division of Consumer and Business Education, FTC
But they were never designed to prove your vaccination status and they may not be enough. Some states, companies, colleges, and other organizations are creating their own verification products and services, including apps and digital passports or certificates. Some connect to state immunization databases while others rely on individual self-report. The patchwork approach gives scammers an opportunity to cash in on the confusion.
Besides not sharing your COVID-19 vaccination card online because of the risk for identity theft, here are a few other ways to help stay ahead of the scammers.
Be skeptical of anyone contacting you from the federal government. Right now, there are no official plans to create a national vaccine verification app or certificate or passport. If you get a call, email, or text from someone saying they’re from the federal government, and asking you for personal information or money to get a national vaccine certificate or passport, that’s a scam.
Check with airlines, cruise lines, and event venues about their requirements. Don’t rely on information from someone who calls, texts, or emails you out of the blue.
Contact your state governmentabout its vaccine verification plans and requirements.
Don’t share your information with just anyone. Scammers often set up real-looking websites to sell fake goods and services, so why not vaccine verification certificates or passports? Before you share any information online, check out who’s asking for it. Search online for the company or organization’s name with words like “scam,” “review,” or “complaint.” Think long and hard before you share personal information, like your Social Security, Medicare, credit card, or bank account numbers. Scammers can steal your information to commit fraud and identity theft.
If you know about a COVID-19 vaccine scam, tell the FTC about it at ReportFraud.ftc.gov. Or, file a complaint with your state or territory attorney general at consumerresources.org, the consumer website of the National Association of Attorneys General.
#AceNewsReport – May.26: You receive a fraudulent text claiming to be from a trusted organisation or individual being impersonated by criminals, including the following:
Your bank, informing you that there is a ‘problem with your account’ such as irregular activity or lack of funds.
A retailer, offering ‘vouchers’ or ‘gift cards’.
A technology provider such as Apple or Google, notifying that you ‘need to validate an account’.
A parcel delivery company, notifying you that you need to ‘confirm that you want a parcel to be delivered’.
HMRC, informing you that you are ‘due a tax refund’.
SCAM ALERT: #Smishing Report: In common with both phishing, which uses email as an initial approach, and vishing, which uses phone calls, smishing uses your mobile phone (either a smartphone or traditional non-internet connected handset). Like the other methods mentioned, it manipulates innocent people into taking various actions which lead to being defrauded:
What all smishing messages have in common is: This list is not exhaustive.
They instruct you to either go to a website or make a phone call to a specified number.
They play on your basic human emotions and needs, such as trust, safety, fear of losing money, getting something for nothing, eagerness to find a bargain or desire to find love or popularity/status.
They generally state or imply the need for your urgent action to either avoid an issue or take advantage of an offer.
Websites you visit via smishing messages generally either request confidential details or cause your internet-connected mobile device to be infected with malware. Phone calls you make in response can either result in confidential details being requested, or be to a premium rate number resulting in exorbitant charges being added to your phone bill.
How to avoid becoming a victim of smishing:
Do not click on links in text messages unless you are 100% certain that they are genuine and well-intentioned.
Take time to consider your actions before responding to text messages.
Ask yourself if the sender, if genuine, would really contact you via this text.
Recognise threats of financial issues or offers that seem too good to be true, for what they really are.
If in doubt, call the correct number of the organisation or individual from whom the text claims to have been sent, to check its authenticity.
Remember that even if the text message seems to come from someone you trust, their number may have been hacked or spoofed.
Do not respond to the text message. Doing so could result in your details being added to a ‘suckers’ list’ and you will be inundated with similar messages.
Dial 7726 (or for Vodafone subscribers, 87726). This will enable your mobile network provider to take early action to block numbers that are generating spam – including scam texts – on their networks, and report them to the regulators.
Report spam text messages directly to your mobile phone provider free of charge by forwarding them to 7726 from the device they are received on.
‘Which’ also operates an online reporting service for scam texts and phone calls, here: www.which.co.uk/consumer-rights/advice/how-to-deal-with-spam-text-messages.
If you have lost money as a result of a smishing text, or via any other fraudulent activity
Report it to Action Fraud, the UK’s national fraud reporting centre by calling 0300 123 20 40 or by visiting www.actionfraud.police.uk. If you are in Scotland, contact Police Scotland on 101.
#AceNewsReport – May.25: The men were arrested in Birmingham, Coventry, London and Colchester, Essex, a specialist unit of the City of London and Metropolitan Police said:
U.K. …Eight arrests in Royal Mail text scam investigation: ‘The suspects were allegedly involved in sending fake messages, primarily posing as Royal Mail and asking people to pay a fee to retrieve a parcel’ Such messages, known as “smishing” texts, steal a victim’s personal and bank details by getting them to follow a link to a fake version of a trusted website.
20 hours ago
A man from London was charged with three offences and the others were released under investigation.
The charged man, from Enfield, will appear at Inner London Crown Court on 21 June.
He faces charges of fraud by false representation; possession of articles for use in fraud; possession of criminal property (money laundering), a spokeswoman for the Dedicated Card and Payment Crime Unit (DCPCU) said.
The unit added the arrests were made as part of a week of action against scam messages.
Det Ch Insp Gary Robinson, head of the DCPCU, said it was working with Royal Mail, the financial services sector and mobile phone networks to fight the crime.
“Ongoing investigations are now under way and we will continue to work together to bring those committing smishing scams to justice,” he said.
The BBC is not responsible for the content of external sites.
#AceNewsReport – May.22: “ The Department of Justice’s Consumer Protection Branch will vigorously pursue and prosecute fraudsters who prey on others through international telemarketing schemes,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Consumer Protection Branch, working alongside the Postal Inspection Service and our U.S. Attorney’s Office partners, will bring to justice those who threaten and defraud consumers, including immigrants who may be vulnerable to schemes that involve false threats to their liberty and ability to remain in the United States.”
CALIFORNIA: A Californian man has been sentenced to more than 10 years in prison for partnering with call centers in Peru that defrauded Spanish-speaking U.S. residents through lies and threats: According to court documents, Angel Armando Adrianzen, 46, partnered with a series of Peruvian call centers that contacted U.S. consumers, many of whom were vulnerable recent immigrants, using internet-based telephone calls’
Those callers claimed to be attorneys or government representatives, and falsely told victims that they had failed to pay for or receive delivery of products. The callers also falsely threatened victims with court proceedings, negative marks on their credit reports, imprisonment, or immigration consequences if they did not immediately pay for the purportedly delivered products and settlement fees. Many victims made payments based on these baseless threats. Adrianzen received the victims’ payments and shipped products to the victims for these call centers, knowing that the call centers used fraudulent and extortionate means to extract money from vulnerable victims. Adrianzen was also convicted of and sentenced for two counts of possession of child pornography, found on his laptop computer and cell phone when search warrants were executed upon those devices.
As part of his guilty plea, Adrianzen admitted that from April 2011 until at least September 2019, he was the owner and operator of AAD Learning Center (AAD). Adrianzen operated and oversaw AAD from California and worked in partnership with call centers in Peru to contact Spanish-speaking consumers in the United States, including in the Southern District of Florida. At AAD, Adrianzen participated in a fraudulent telemarketing scheme that offered various products to Spanish-speaking consumers in the United States to obtain payments from vulnerable victims.
“Today’s sentence serves not only as just punishment for this defendant, but also as notice to others who may prey on vulnerable victims,” said Acting U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida. “The Justice Department and its partners will aggressively investigate such criminal activity. We will find you and ensure you are held accountable for your crimes.”
“In this international telemarketing scheme, deceptive scare tactics were used to threaten thousands of vulnerable U.S. consumers into purchasing undelivered products by falsely purporting to use America’s legal system against them and coercing them out of millions of dollars,” stated Inspector in Charge Joseph Cronin of the U.S. Postal Inspection Service, Miami Division. “Today’s sentencing hopefully brings relief to U.S. residents and immigrants who were victimized by this transnational fraudulent scheme. The U.S. Postal Inspection Service, along with the Department of Justice’s Consumer Protection branch and the U.S. Attorney’s Office, are committed to holding individuals who use the U.S. Mail to defraud consumers accountable.”
In pleading guilty, Adrianzen admitted that he assisted his co-conspirators in Peru in setting up and staffing call centers that contacted victims in the United States and, at times, provided the call centers with lists of consumers to contact and call scripts to use when doing so. The scripts incorporated various false statements, including directing callers to falsely claim to be attorneys with the U.S. Department of Education. In other scripts, the callers were directed to falsely claim to be associated with Spanish language television channels, radio stations, or toothpaste companies.
Adrianzen further admittd that his co-conspirators falsely claimed that they were lawyers, sometimes calling from a “legal department” of a company, or from a supposed “minor crimes court.” Adrianzen’s co-conspirators falsely threatened to have victims deported, arrested, and charged with crimes, and to have negative marks placed on their credit reports if they failed to pay the hundreds of dollars of demanded fees. Ultimately, Adrianzen processed over $3,500,000 in payments as part of the scheme.
Adrianzen was sentenced to serve 121 months in prison by U.S. District Judge Robert N. Scola Jr., to be followed by fifteen years’ supervised release. He was also ordered to make restitution payments to victims of his offenses. Adrianzen was arrested on Sept. 16, 2019, and has remained incarcerated. On Nov. 21, 2019, he pleaded guilty to conspiracy to commit mail and wire fraud.
The U.S. Postal Inspection Service’s Miami Division and the Civil Division’s Consumer Protection Branch investigated the case.
Trial Attorneys Phil Toomajian and Joshua Rothman of the Consumer Protection Branch prosecuted the case. Assistant U.S. Attorney Bertila Fernandez of the Southern District of Florida assisted with the prosecution of the child pornography charges.
#AceNewsReport – May.14: Some of the most common unwanted calls the FTC sees currently include pretend Social Security Administration, Medicare, and IRS calls, fake Amazon or Apple Computer support calls, and fake auto warranty and credit card calls.
AMERICA: SCAM ALERT: Unwanted calls: Just block ’em and report ’em ……..So this week, as part of Older Americans Month, we’re talking about how to block unwanted calls — for yourself, and for your friends and family. To get started, check out this video:
May 12, 2021by
Consumer Education Specialist, FTC
But no matter what type of unwanted calls you get (and everyone is getting them) your best defense is a good offense. Here are three universal truths to live by:
Don’t trust your caller ID
Hang up on robocalls
Use call blocking
Visit FTC.gov/calls to learn to block calls on your cell phone and home phone.
The FTC continues to go after the companies and scammers behind these calls, so please report unwanted calls at donotcall.gov. If you’ve lost money to a scam call, tell us at ReportFraud.ftc.gov. Your reports help us take action against scammers and illegal robocallers — just like we did in Operation Call It Quits. In this law enforcement sweep, the FTC and its state and federal partners brought 94 actions against illegal robocallers. But there’s more: we also take the phone numbers you report and release them publicly each business day. That helps phone carriers and other partners that are working on call-blocking and call-labeling solutions.
So share these videos and this call blocking news with your friends and family. Sharing will help protect someone you care about from a scam — and it’ll help them get fewer unwanted calls, too!
#AceNewsReport – Apr.01: According to court documents, Cody Allen Easterday, 49, of Mesa, used his company, Easterday Ranches Inc., to enter into a series of agreements with Tyson and Company 1 under which Easterday Ranches agreed to purchase and feed cattle on behalf of Tyson and Company 1. Per the agreements, Tyson and Company 1 would advance Easterday Ranches the costs of buying and raising the cattle. Once the cattle were slaughtered and sold at market price, Easterday Ranches would repay the costs advanced (plus interest and certain other costs), retaining as profit the amount by which the sale price exceeded the sum repaid to Tyson and Company 1.
‘A Washington man pleaded guilty today to defrauding Tyson Foods Inc. (Tyson) and another company (Company 1) out of more than $244 million by charging them under various agreements for the purported costs of purchasing and feeding hundreds of thousands of cattle that did not actually exist’ Beginning in approximately 2016 and continuing through November 2020, Easterday submitted and caused others to submit false and fraudulent invoices and other information to Tyson and Company 1.
These false and fraudulent invoices sought and obtained reimbursement from the victim companies for the purported costs of purchasing and growing hundreds of thousands of cattle that neither Easterday nor Easterday Ranches ever purchased, and that did not actually exist. As a result of the scheme, Tyson and Company 1 paid Easterday Ranches over $244 million for the purported costs of purchasing and feeding these ghost cattle.
Easterday used the fraud proceeds for his personal use and benefit, and for the benefit of Easterday Ranches, including to cover approximately $200 million in commodity futures contracts trading losses that Easterday had incurred on behalf of Easterday Ranches. In connection with his commodity futures trading, Easterday also defrauded the CME Group Inc. (CME), which operates the world’s largest financial derivatives exchange. On two separate occasions, Easterday submitted falsified paperwork to the CME that resulted in the CME exempting Easterday Ranches from otherwise-applicable position limits in live cattle futures contracts.
“For years, Cody Easterday perpetrated a fraud scheme on a massive scale, increasing the cost of producing food for American families,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “The Criminal Division’s prosecutors are committed to swiftly and thoroughly prosecuting frauds affecting our nation’s agricultural and other commodities markets, whether in the heartland or on Wall Street.”
“I commend the agents with the Federal Deposit Insurance Company Office of the Inspector General and the U.S. Postal Inspection Service for their dedication to investigating this case and tenacity in ferreting out the fraudulent activity to which the defendant has pleaded guilty,” said Acting U.S. Attorney Joseph H. Harrington for the Eastern District of Washington.
“Today’s guilty plea holds the defendant responsible for his extensive and coordinated fraud over many years, resulting in more than $240 million of illicit gains,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG). “The defendant submitted false and fraudulent documentation, and then brazenly used the proceeds to cover his losses and for his personal benefit. This scheme was unraveled through rigorous and diligent investigative work with our law enforcement partners, and the FDIC-OIG remains committed to helping preserve the integrity of the banking sector.”
“Producing and providing false invoices and information on goods and services never delivered, were the fundamental key in defrauding an American multinational company out of hundreds of millions of dollars,” said Inspector in Charge Delany De León-Colón of the U.S. Postal Inspection Service Criminal Investigations Group. “This case highlights the collaborative investigative work undertaken by the U.S. Postal Inspection Service and its law enforcement partners to protect consumers and businesses from duplicitous practices. Anyone who engages in these fraudulent and deceptive activities will be brought to justice.”
Easterday pleaded guilty to one count of wire fraud and agreed to repay $244,031,132 in restitution. He is scheduled to be sentenced on August 4 and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Federal Deposit Insurance Corporation Office of Inspector General and the U.S. Postal Inspection Service are investigating the case.
Acting Principal Assistant Chief Avi Perry and Trial Attorney John “Fritz” Scanlon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Russell E. Smoot of the Eastern District of Washington are prosecuting the case.
The Fraud Section plays a pivotal role in the Justice Department’s fight against white collar crime around the country and is the national leader in prosecuting fraud and manipulation in the U.S. commodity markets.