INTERNET schemes net 66 arrests

Wednesday, May 23rd 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ Sixty-two people have been arrested or have pleaded guilty to charges that they bilked tens of thousands of consumers out of $117 million through Internet scams that ranged from fraudulent investments to bogus sales offers, the FBI said Wednesday.

More than 56,000 consumers were victimized by online fraud schemes uncovered through a series of investigations, code-named ``Operation Cyber Loss,'' conducted by the FBI and other federal, state and local law enforcement agencies.

Individual losses ranged from $50 to $5,000. One scheme based in San Diego and lasting three years involved criminals pitching an Internet service _ never delivered _ to 3,000 investors, who collectively lost $50 million.

In that case, 39 people were indicted and 20 of them were arrested in the last 24 hours, the FBI said.

The nationwide operation has resulted in charges against 88 people in the last 10 days.

FBI officials said Wednesday's announcement should serve as a warning to Internet users that criminals are aggressively exploiting the online world, where it's easy to attract consumers and hide an identity.

``The old adage that you can't believe everything you read also holds true for what you read on the Internet,'' said Tom Pickard, deputy director of the FBI.

The investigations were initiated through information gathered at the year-old Internet Fraud Complaint Center, a joint operation of the FBI and the National White Collar Crime Center.

The center takes in complaints from consumers and companies on its Web site, analyzes the information to find common threads and distributes the leads to law enforcement agencies.

The center has received 36,000 complaints in the last year. Over 30,000 were found to be valid and were referred to police, said Rueben Garcia, assistant director of the FBI's criminal investigation division.

In Miami, the FBI investigated a series of complaints by consumers who paid $295 each to gain access to a nonexistent Internet shopping mall. About 46,000 consumers were taken in by the scam; losses amounted to $14 million, FBI officials said.

In another case, a company lured investors into a scheme that guaranteed to pay a 4 percent return. More than 400 people lost $13 million. Over $6 million has been recovered and will be returned to investors.

``Internet fraud, whether its in the form of securities and investment schemes, online auction and merchandizing schemes, credit card fraud or identity theft, has been one of the fastest growing and pervasive forms of white-collar crime,'' said Deputy Attorney General Larry Thompson