Florida suit hints pretexting is used widely by lenders
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Some of nation's the largest banks were customers of a Florida firm shut down this year for pretexting, or lying, to get personal information such as phone records, the same practice that Hewlett-Packard Co. executives will testify to Congress about today.
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Q: I have been receiving an increasing number of e-mail requests to participate in financial schemes that are clearly bogus and illegal.
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The Justice Department is investigating possible accounting fraud at Fannie Mae, the mortgage finance company, a source close to the matter said on Thursday.
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Fraud is running rampant in the nation's mortgage industry, with nearly three times as many reports of suspicious activity so far this year compared with 2001, a top FBI official said Friday.
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Apparently it&#39;s not just unwary individuals that fall victim to online scammers. Even large corporations, it seems, can get suckered into parting with their money by devious&#160;phishers.Case in point: Eden Prairie, MN.-based grocery chain Supervalu, which earlier this year got conned into depositing more than $10 million into two fraudulent bank accounts before recognizing the ruse. Details of the case are contained in court documents filed in connection with two forfeiture cases stemming from the incident.According to federal court filings in the U.S. District Court for the District of Idaho, the fraudulent activity took place in late February and early March this year. In the court filings, Stephen Kilgroff, Supervalu&#39;s vice president of legal affairs, said that on February 26 and 28 the company received two separate e-mails, one purporting to be from an employee at American Greetings Corp. and the second from an employee at Frito-Lay, both company-approved vendors.Both e-mails told Supervalu to send future payments for each vendor to new bank account numbers. In the case of the e-mail that purported to be from American Greetings Corp., Supervalu was advised to send payments to an HSBC account in Miami. The other e-mail advised Supervalu to send Frito-Lay payments to an account at First Security Bank in Rogers, Arkansas.Between Feb 28 and March 3, Supervalu deposited just over $6.5 million via multiple wire-transfers to the HSBC account, thinking that it was sending the money to American Greetings Corp. Similarly, on March 2 it made eight separate wire-transfers to the bank in Arkansas, depositing a total of $3.6 million to an account it thought belonged to Frito-Lay.In addition to the $6.5 million deposited by Supervalu into the HSBC account, an additional amount of $500,000 had been deposited into the same account by a second company, identified as &quot;ROHM&quot; on court documents. No information has been available concerning the second company, and it is not a party to subsequent litigation.Around March 6, according to the filings made by Kilgroff, Supervalu discovered that it had been &quot;induced&quot; into making the transfers to the bogus accounts. Following the discovery of the fraud, Supervalu quickly notified the appropriate law enforcement authorities, who managed to recover nearly all of the money before it could be withdrawn from the accounts.The recovered money is now being claimed by Frito-Lay, American Greetings and Supervalu. In making the claim to the recovered money, Frito-Lay said that it believes the money belongs to Supervalu and said supported that company&#39;s claim to ownership of the misdirected funds.&quot;However to the extent there is any determination that the ownership of these funds changed from Albertsons/Supervalu [the Albertsons grocery chain was recently acquired by Supervalu] to Frito-Lay (as a result of the attempted transfer, the misdirection, or any other development) Frito-Lay makes this claim to these funds in the alternative and subject to any claim of ownership by Albertsons/Supervalu&quot; the company said in an affidavit.A federal judge is expected to rule sometime in November on which firm should receive the recovered funds.A spokeswoman from Supervalu responded via e-mail to a request for comment. &quot;As indicated by the forfeiture complaint filed by the U.S. Attorney&#39;s Office in Boise, Supervalu was the target of attempted financial fraud,&quot; spokeswoman Haley Meyer said. &quot;Due to our internal controls and processes, we were able to quickly discover and report this to the FBI. As a result of the quick work of the Boise FBI Office and the U.S. Attorney, any funds lost are minimal.&quot;Computerworld is an InfoWorld affiliate.&#160;
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An investigation into insurance industry sales practices launched last week by the New York attorney general has widened to other states, and an increasing number of insurance companies have reported receiving subpoenas.
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By STOCK ROB  PROPERTY SPRUIKING firm Richmastery is at the centre of a Googling row with several top financial authors and property investors, including some who accuse it of plagiarism.
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The homeowners who signed these mortgages must be held accountable somehow ("State to refinance troubled mortgages," July 11). Yes, the mortgage companies may have taken advantage, but if the homeowners had hired an attorney or did their homework, there wouldn't be a problem. This is like rewarding stupidity.
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The Property Casualty Insurers Association of America (PCI), the group from which member companies write about a third of Florida homeowners insurance, said initial reports from claims adjusters indicate damage from Hurricane Charley, while extensive, was ...
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Top executives of Verizon   Communications VZ.N, Sprint Nextel Corp. S.N, Cingular and   T-Mobile USA have been invited to testify Friday at a U.S.   House Energy and Commerce Committee hearing into the use of   deceptive measures to obtain personal information, known as   pretexting, the panel said on Monday.
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Questions are growing about whether law firms that helped investment banks bundle home loans into securities adequately disclosed the risks to investors.
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Fannie Mae (nyse: FNM - news - people ) disclosed Tuesday that prosecutors had asked the company to preserve documents as part of a criminal probe by the US Department of Justice.
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The subpoenas seek information on nontraditional insurance and transactions that some companies have used to improve the appearance of their financial statements.
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The measures promise to protect borrowers from prepayment penalties and misleading loans.
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Securities regulators told the mortgage giant Wednesday that they are considering civil charges for alleged manipulation of the company's reported earnings.
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Securities regulators are probing several brokerage firms dealing with collateralized mortgage obligations, the Wall Street Journal reported on Friday.
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Florida's Hurricane Catastrophe Fund will seek to borrow several billion dollars so it can quickly pay claims if a large hurricane hits the state this year.