Table of Contents for

System Forensics, Investigation, and Response, 3rd Edition

Investment offers are neither new nor necessarily illegal. In fact, cold-calling is a legitimate sales technique when selling stocks. However, the process can be used to artificially and fraudulently inflate the value of a target stock. The most common version of this is called the “pump and dump.” In this scheme, the perpetrators buy significant amounts of stock in a company that is relatively cheap, often penny stocks. Then, they fuel false rumors that the company is on the verge of some large contract or other business deal that would increase its value significantly. This artificially drives up the price of the stock. Once the rumors have raised the stock as high as the criminals think it will go, they dump their stock at an inflated price, thus making substantial profits. Eventually, once it is clear the rumors were not true, the stock’s value will drop again. The people who purchased the stock at an inflated price, but were not in on the scam and did not know to sell their stock before its value plummeted, lose significant amounts of money.

The growth of the Internet did not create these scams—they existed long before the Internet. But the widespread popularity and speed of the Internet simply made scams easier to perpetrate. For example, with the pump and dump, the Internet allows the perpetrator to create fake blogs, bulletin board postings, and emails, all claiming the target stock is likely to rise in value. The key to Internet-based fraud of this kind is, instead of cold-calling via the phone, to send an enticing email to as many recipients as possible. Of course, the perpetrator realizes that most people will not respond to the email, but if even a tiny percentage do, and the perpetrator sends out a million emails, he or she can still pull in a significant amount of money.

One of the more common Internet schemes involves sending out an email that suggests that you can make a large sum of money with a very minimal investment. It may be a processing fee you must submit in order to receive some lottery winnings, or perhaps legal fees in order to receive some inheritance. Perhaps the most famous of these schemes has been the Nigerian fraud. In this scenario, an email is sent to a large number of random email addresses. Each email contains a message purporting to be from a relative of some deceased Nigerian doctor or government official, always of significant social standing. (It’s more likely to convince victims that the arrangement is legitimate if it seems to involve people of good social standing.) The offer goes like this: A person has a sum of money he or she wants to transfer out of his country, and he or she cannot use normal channels. He or she wants to use your bank account to “park” the funds temporarily. If you allow the person access to your account, you will receive a hefty fee. If you do agree to this arrangement, you will receive, via normal mail, a variety of very official-looking documents—enough to convince most casual observers that the arrangement is legitimate. You will then be asked to advance some money to cover items such as taxes and wire fees. Should you actually send any money, however, you will lose it, and you will never hear from these individuals again. The U.S. FBI has issued a bulletin detailing this particular fraud scheme. Further FBI Internet crime information is available at http://www.fbi.gov/scams-safety/fraud/internet_fraud.

Intellectual property is a very real commodity. Large companies spend millions of dollars on filing patents and defending their patents and copyrights. The Internet makes distribution of illegally copied materials, or data piracy, very easy. You are probably quite familiar with illegal music downloads; however, that is only one aspect of intellectual property theft.

Illegal copies of software can be found on the Internet. There are websites that have such copies or the activation codes for software. These sites are colloquially referred to as warez (pronounced like wares) sites. As a consumer, the best advice to follow is “If it seems too good to be true, it is probably not true.” In other words, if a website boasts of a $400 software package for $89, that is probably illegally copied software.