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The Briefing September2012

Regional Directors

Great LakesLarry Turner Indiana State Police

Mid-AtlanticMike Brown Bedford County Sheriff’s Office, VA

MidwestKen Nix Clayton Police Department, MO

MountainTom Jarvie Green River Police Department, WY

NortheastChristopher Cotta Rhode Island Office of the Attorney General

South CentralTom McCormick Louisiana Department of Justice

SoutheastCorbett Lewis South Carolina Law Enforcement Division

WestSean Rooney California Department of Corporations

NW3C Board of Directors

Director of NW3CDon Brackman

ChairmanGlen B. Gainer, III West Virginia State Auditor’s Office

Non-Regional DirectorsJim Hood Mississippi Office of the Attorney GeneralBill Williams Los Angeles Police Department, CA

More than 100 law enforcement profession-als representing 51 different local, state and

federal agencies attended a recent training con-ference presented by NW3C on “Effectively Com-bating I-95 Cigarette Trafficking.” The training took place August 16 at the Emergency Services Training Center in Burlington, NJ, and provided attendees with a variety of perspectives on tobac-co trafficking and how law enforcement, policy makers and private industry have confronted the problem. NW3C has offered contraband tobacco training since 2008.

At the training, representatives from the New York Sheriff ’s Office – Undersheriff Kyle Williams and Lieutenant Julio Lopez – gave a presentation focused on trafficking trends and methods. New York has the highest cigarette tax rate in the U.S. at $6.46 per pack, compared with Virginia, which has one of the lowest, at .30 cents per pack. The dif-ferences in state sales tax rates on cigarettes have “made the northeastern U.S. a smuggling Mecca,” Williams and Lopez explained.

Virginia State Crime Commission Direc-tor of Legal Affairs G. Stewart Petoe provided an overview of a recent Virginia cigarette traf-ficking study and the state’s newly enacted (as of July 2012) anti-smuggling legislation, which makes it a Class 2 misdemeanor for any person who is not a manufacturer, wholesaler or retail-er to possess more than 25 cartons of tax-paid cigarettes with intent to distribute. A second of-fense is a Class 1 misdemeanor.

Maryland State Police Trooper James Ward discussed the development of interdiction opera-

tions. Smugglers use a variety of vehicles – from small passenger cars to box trucks – to transport cigarettes up and down the I-95 corridor, mak-ing it difficult for law enforcement to track them. Smugglers create hidden panels and compart-ments to hide their loads or simply cover cartons with a blanket, Ward said. He reviewed several re-cent seizures and discussed similarities and differ-ences among the incidents.

Joseph Fox, with Alcohol, Tobacco and Fire-arms (ATF), discussed tobacco diversion, a fi-nancial crime connected to many other offenses, including wire fraud, money laundering and con-spiracy. Recent contraband cigarette cases, Fox explained, have had connections with organized crime, terrorism, hijacking and multi-million-dollar burglaries.

A recent case from Virginia highlights the is-sue of cigarette trafficking (http://bit.ly/PB7B2x). A Berryville, VA couple was convicted in federal court for their role in an $8-million trafficking scheme. From 2009 to 2011, the couple bought about 400,000 cigarette cartons in Virginia and re-sold them in New York.

Representatives from Philip Morris, a ciga-rette manufacturer, reviewed how private indus-try is helping law enforcement through training, funding and other efforts, such as support for ongoing investigations, inspecting and authen-ticating products and packaging, and destroying seized products.

Law enforcement at the conference expressed a need for a central repository to collect and share cigarette trafficking information. NW3C already has an intelligence database in place that can pro-vide information and investigative support related to tobacco crime. The Criminal Information Point-er Database (CIPD) is a viable tool for law enforce-ment nationwide. Learn more about the CIPD da-tabase at: www.nw3c.org/services/ISS/cipd.

“Overall, this conference provided a unique op-portunity for law enforcement to hear local, state and federal perspectives on tobacco contraband enforcement efforts,” said NW3C Investigative Sup-port Manager J.P. Meade. “The feedback we received from attendees demonstrated that this conference was a tremendous success. NW3C looks forward to continuing its support of efforts at all enforcement levels to tackle this serious crime.”

NW3C Presents Training on Cigarette Trafficking

The Northeast has become a major destination for smuggled tobacco products.

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Report Examines Factors Behind Deadly Assaults of Police Officers

A new report from the International Association of Chiefs of Police’s

(IACP) National Center for the Pre-vention of Violence Against the Police (NCPVAP) takes a deeper look into the circumstances behind a 27-percent increase in the number of law enforce-ment officers feloniously killed in the line of duty last year.

In 2011, 72 officers lost their lives to felonious assault while responding to calls for service, up from 56 the year before, marking a 17-year high. Last year saw a tragic spike in line-of-duty deaths as 177 officers died in the field.

Since 2001, 613 officers have been feloniously killed, according to FBI statistics cited in the NCPVAP re-port. The report represents the first phase in an ongoing analysis of the circumstances in which these deadly assaults on officers occur and how agencies might better prevent them

in the future. Open-source informa-tion (news accounts and other public documents) and contact with the in-volved agencies were used to compile case-by-case details of each officer’s death, which were then categorized by call type:

• Disturbance: 15 deaths• Arrest situation: 14 deaths• Ambush: 11 deaths• Traffic pursuit/stop: 11 deaths• Warrant service: 10 deaths• Investigating suspicious cir-

cumstances: 9 deaths

• Handling/transporting pris-oner: 2 deaths

On average, there are 58,000 assaults on law enforcement officers nation-wide annually, resulting in more than 50 deaths. “Although the sheer number of assaults against law enforcement is clearly a concern, the focus in this report is singular – to improve awareness in the field,” the document noted.

NCPVAP will work with law en-forcement agencies nationwide to de-velop a sample post-incident review protocol for felonious assaults against officers. “This protocol will be based on best practices from law enforcement agencies and act as a guide for others to follow in order to learn from critical incidents and line-of-duty deaths,” the report concluded.

For additional information, go to www.theiacp.org/NCPVAP.

IC3 Scam Alerts - A New Twist to Old ScamsThe Work-At-Home Scheme

IC3 previously reported on work-at-home schemes

where victims advised they applied for employ-ment through online resumes. The alleged em-ployers used the names of well-known financial institutions and industry agencies to lure their victims into the scheme. The potential “employees” were contacted via email and interviewed for various positions using Yahoo! Instant Messenger.

In some cases, the “employees” were required to purchase various software packages to perform the tasks required for their employment. The “employees” received a check and were instructed to keep a portion of the funds for supplies and wire the remaining funds to another individual. Once the “employ-ee” wired the funds, the check was returned as counterfeit. IC3 recently received over 80 complaints identifying a new twist to the scheme. “Employees” were also asked to post employ-ment advertisements on Craigslist and provide full details of a credit card, including owner name, address, card number, security code, and the expiration date of the card. In doing so, the victim unknowingly became a recruiter for the fraudster.The Hit Man Scam

Victims informed IC3 that they received emails advising they have been targeted for assassination. The emails

advised them to purchase a security alarm to use if they see

suspicious activity. The emails were signed by Agent Bauer of the International Intelli-gence Bureau and included the following language:

“You have been targeted for assassination over a past legal financial matters. A hired international

assassin has been hired to kill you. All information and con-crete evidence will be forwarded to you, but that should be after the apprehension of the assassin. Please do not disclose this information to any body, including any other enforce-ment personal in your region. Our effort to trap him might be jeopadise, if our strategies are expose by other enforcement agencies behind this crime. From this moment see anybody as somebody that wants to kill you.

“The private international investigator tracking the assas-sin, wants you to purchase our device security alarm, as you are expected to press the device alarm if you suspect any activ-ities. We can come to your rescue through any of our attached security personel, and this is possible within our network close to you in less than 10 minutes.

“Please try to cooperate with us. We wait to hear from you.”*Recipients must be cautious of emails purportedly from

any government agency endorsing a product or encouraging the recipient to send money for any reason. The United States government does not endorse products via email.

*Note: The language above is copied directly from the email. Misspellings and errors have not been corrected.

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NW3C Helps Secure Conviction in Investment Scam

David A. Silver of Henrico (VA) was sentenced to five years in prison and three years of supervised release for false

representations made to investors on real estate development investments. U.S. District Judge Henry E. Hudson increased the sentence from the recommended four years in prison. Judge Hudson stated he did not believe anyone would have invested with Silver had they known the level of risk and that Silver “had caused a lot of damage.”

The investigation of this case was conducted by the FBI, the U.S. Postal Inspection Service and the Internal Revenue Service’s criminal investigation unit with support from the Vir-ginia State Corporation Commission and NW3C.

Silver was the owner of Old Dominion Financial Services, a private lender for real estate development projects. Begin-ning in 2000, Silver started doing business with Donald Lacey, who ran Capitol Funding & Consulting. Silver directed investor funds to Lacey for renovation projects. Silver solicited investors to make loans for these properties and they would receive deeds of trust against a particular property meant to protect their in-vestment. Silver made false statements to investors, telling them their money would be escrowed and the loan-to-value ratio for

each project would not exceed 80-percent.NW3C Investigative Support analysts worked with the lead

investigating agencies to analyze all of the investments, transac-tions and accounts for Silver. They worked to put together charts and timelines outlining the details of the investment and where the money went to show the court how Silver defrauded his investors.

All investor funds were immediately transferred to Lacey through one of three Lacey-owned limited liability corporations. Instead of completing renovation projects, Lacey used the money to pay other investors, and significantly overleveraged properties with multiple liens. For each construction loan Lacey arranged, Silver received a substantial brokerage fee at settlement and, in many instances, a cash payment from Lacey. Lacey was convicted in 2010 and is currently serving 10 years in prison.

NW3C analysts play a critical role in investigations like these, as they establish financial transaction patterns, develop possible links between criminal targets and associated criminal activity and provide link charts, timelines and graphs for court presentations.

For more information on Investigative Support services visit www.nw3c.org/services/iss.

What’s the Password?

Which password is stronger, “QT*2pass” or “TheQuick-DogJumps”?

The answer is: “TheQuick-DogJumps.” This may be a surprise, as many would probably think the pass-word with the number and the symbol could be harder to crack, but a modern password cracker – a software pro-gram that cycles through every possi-ble combination of characters – could crack the eight-character gibberish password in less than four hours. The longer password with plain English would take more than 300 years.

The key is to focus on the length of the password and not just the combination of characters or complexity. If you have a long password that is beyond eight or nine characters and you add special characters, such as upper and lowercase letters, numbers and symbols, the password becomes extremely hard to break.

Most online systems, like banks or social media outlets will lock up after several failed attempts to login. To circum-vent this, hackers try to break in and capture a site’s entire password database. From there, the hackers work to decipher the passwords. A single high-end desktop computer running a cracker can process 17 billion combinations in an hour. If the password is longer; the harder it will be to crack the code.

Hackers have recently been very successful at accessing passwords for popular websites. The most notable was when

hackers stole more than 6 million passwords from LinkedIn® this past summer. Also, Yahoo® recently had 450,000 passwords

stolen and Gamingo® (an online gaming site) had a breach that exposed 8.24 mil-lion passwords and email addresses.

The Gamingo leak has been noted as one of the largest breaches cyber secu-rity officials have seen. If someone uses the same password for multiple sites, once compromised, other accounts can be easily hacked.

Some secure sites now have password strength indicators that can tell you if your password is weak or strong. Here are some tips for building a strong password:

1. Use passphrases rather than passwords – the length is key.

2. Include numbers and special characters.3. Use different passwords for different sites.4. Change your passwords every few months. 5. Broaden your digital identity and use multiple

email addresses. To better protect themselves, some people use different

email accounts for different activities. For example online shopping sites may be linked to one email account, while online banking is linked to another. Some go the extra mile and will only bank on the desktop and access social media or online gaming on their notebook computer (i.e. iPad®).

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Bureau of Justice AssistanceU.S. Department of Justice

This project was supported by Grant No. 2011-BE-BX-K002 awarded by the Bureau of Justice Assistance. The Bureau of Justice Assistance is a component of the Office of Justice Programs, which also includes the Bureau of Justice Statistics, the National Institute of Justice, the Office of Juvenile Justice and Delinquency Prevention, the Office for Victims of Crime, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking. Points of view or opinions in this document are those of the author and do not necessarily represent the official position or policies of the U.S. Department of Justice. The National White Collar Crime Center (NW3C) is the copyright owner of this document. This information may not be used or reproduced in any form without express written permission of NW3C. For questions or additional information, please contact Kimberly Williams, Communications Manager at 1-800-221-4424 ext. 3320 or kwilliams@nw3c.org. NW3C TM, IC3® and ICSIS TM are trademarks of NW3C, Inc. and may not be used without written permission. © 2012. NW3C, Inc. d/b/a the National White Collar Crime Center. All rights reserved.

July - August 2012 New MembersGreat LakesBronson Police Department, MIFairfield Police Department, OHLake Township Police Department, OHMichigan Department of Treasury - Tax Compliance Bureau - Discovery & Tax Enforcement, MIOhio Casino Control Commission - Division of Enforcement, OHWashtenaw County Sheriff ’s Office, MI

Mid-AtlanticCraig County Sheriff ’s Office, VAHenrico County Sheriff ’s Office, VAIndependence Police Department, VAKentucky Office of the Commonwealth’s Attorney - 16th Judicial Circuit, KYKing & Queen County Sheriff ’s Office, VAPratt Police Department, WVTompkinsville Police Department, KYTaylor County Sheriff ’s Office, WVU.S. Department of Homeland Security - Coast Guard Investigative Service - Headquarters, VAU.S. Department of Homeland Security - Homeland Security Investigations - Special Agent-in-Charge - Baltimore, MDU.S. Department of Homeland Security - National Protection and Programs Directorate - Federal Protective Service, DCWintergreen Police Department, VA

MidwestBallwin Police Department, MOCarlyle Police Department, ILCity Colleges of Chicago - Office of the Inspector General, ILEffingham County Sheriff ’s Department, ILUniversity of Wisconsin-Oshkosh Police Department, WIWood County Sheriff ’s Department, WI

MountainDodge City Police Department, KSGoodyear Police Department, AZGreenwood County Sheriff ’s Office, KS

South Sioux City Police Department, NEU.S. Army - Criminal Investigation Command - Fort Carson, CO

NortheastLee Police Department, NHMassachusetts Port Authority Police Division, MANew Bedford Police Department, MANew Jersey Department of Human Services Police Force, NJ

South CentralGeneva Police Department, ALMissouri City Police Department, TXMustang Police Department, OKOpelika Police Department, ALWest Baton Rouge Sheriff ’s Office, LA

SoutheastCherokee County School Police Department, GACitrus County Sheriff ’s Office, FLEnotah Judicial Circuit District Attorney’s Office, GAHolmes County Sheriff ’s Office, FLIndian River County Sheriff ’s Office, FLMonroe County Sheriff ’s Office, FLMorehead City Police Department, NCNorth Georgia College and State University Department of Public Safety, GAOsceola County Sheriff ’s Office, FLSurfside Beach Police Department, SCUnion County Sheriff ’s Office, SC

WestAngels Camp Police Department, CACeres Police Department, CAElk Grove Police Department, CALinn County Sheriff ’s Office, ORMerced County Sheriff ’s Office, CASan Bernardino Police Department, CAU.S. Department of Justice - Bureau of Alcohol, Tobacco, Firearms and Explosives - Seattle Division, WA

Deputy Sheriff Sergio AlemanMilwaukee County Sheriff ’s Office, WI

Constable Brian BachmannBrazos County Constable’s Office - Precinct 1, TX

Corporal Marshall Lee BaileyWest Virginia State Police, WV

Correctional Officer Timothy BettsIndiana Department of Correction, IN

Correctional Officer Nikki Bostic-JonesCook County Sheriff ’s Office - Department of

Corrections, IL

Border Patrol Agent Leopoldo Cavazos, Jr.United States Department of Homeland Security - Customs

and Border Protection - United States Border Patrol, US

Captain Leide DeFuscoPueblo County Sheriff ’s Office, CO

Border Patrol Agent James R. DominguezUnited States Department of Homeland Security - Customs

and Border Protection - United States Border Patrol, US

Master Police Officer Jeremiah M. Goodson, Jr.Lumberton Police Department, NC

Police Officer Brian LorenzoPhiladelphia Police Department, PA

Deputy Sheriff William Mast, Jr.Watauga County Sheriff ’s Office, NC

Deputy Sheriff Josh MitchellReagan County Sheriff ’s Office, TX

Police Officer Chad MorimotoHonolulu Police Department, HI

Police Officer I Adrian MorrisPrince George’s County Police Department, MD

Deputy Sheriff Brandon NielsenSt. John the Baptist Parish Sheriff ’s Office, LA

Postal Inspector Preston Boyd ParnellUnited States Postal Inspection Service, US

Police Officer Robert A. PotterNew Mexico Motor Transportation Police, NM

Chief of Police Herbert ProffittTompkinsville Police Department, KY

Agent Wilfredo Ramos-NievesPuerto Rico Police Department, PR

Patrolman Christopher ReevesMillville Police Department, NJ

Police Officer Forrest “Dino” TaylorBaltimore City Police Department, MD

Police Officer Jose TorresWestfield Police Department, MA

Deputy Sheriff Jeremy TricheSt. John the Baptist Parish Sheriff ’s Office, LA

Police Officer Matthew TynerColorado Springs Police Department, CO

Police Officer Moses Walker, Jr.Philadelphia Police Department, PA

Deputy Sheriff Josh WilliamsWaxahachie Police Department, TX

Trooper Eric M. WorkmanWest Virginia State Police, WV

Contact Information for NW3C ServicesNW3C Websitewww.nw3c.org

Member Services(804) 967-6210 membership@nw3c.org

Investigative Support(800) 221-4424, ext. 3520

Training(877) 628-7674, ext. 2234

IC3www.ic3.govwww.nw3c.org/services/ic3(800) 251-3221

Remembering Fallen Heroes Killed in the Line of Duty* July - August 2012

*Source: www.odmp.org (as of September 25, 2012)

@NW3CNews

Search: NationalWhiteCollarCrimeCenter

2012 NW3C Scheduled Training Classeshttp://www.nw3c.org/docs/default-document-library/training_insert.pdf?sfvrsn=6

Upcoming Mortgage Fraud Training Classes

As part of a larger collabora-tive BJA effort, NW3C is of-fering mortgage fraud train-ing for investigators and prosecutors. These 2-1/2 day courses are available in the following locations:

• Tampa, FL January 15 - 17, 2013

• Nashville, TN May 28 - 30, 2013

• St. Paul, MN June 18 - 20, 2013

• Lincoln, NE July 23 - 25, 2013

For more information or to register:

http://www.nw3c.org/training/financial-

crimes/64

View the Fall edition of the Informant Online

Click the link below to read in-depth articles on West Virginia State Auditor Glen B. Gainer, III; prepaid cards; embezzlement in our schools and more!

www.nw3c.orgFollow NW3C