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5 Internet Cons and How They Were Caught

Forget Nigerian emails offering pots of cash in return for your bank account details and don’t worry about herbal mood enhancers that are made of nothing more than horny goat weed and ginger. Only the truly dumb are taken in by one of those spam-delivered cons. Some Internet-based confidence tricks though are spectacular, smart and they might well have got past you. Here are five of the best and the biggest.

R.J. Ellory’s Sock Puppets

The Theakston Old Peculier Crime Writing Festival sounds like the sort of event in which authors discuss acts of deception rather than confess to them. But that’s what ebook author Stephen Leather did earlier this summer at the annual Harrogate writers’ get-together. As he defended the economics of low-priced digital books and argued that pirates help to promote his titles, he also confessed to using “sock puppets.” He posted fake positive reviews of his own books on Amazon and used false identities on forums to recommend his titles.

“As soon as my book is out I’m on Facebook and Twitter several times a day talking about it. I’ll go on to several forums, the well-known forums, and post there under my name and under various other names and various other characters. You build up this whole network of characters who talk about your books and sometimes have conversations with yourself,” he told the festival.

That got people talking but it was author Jeremy Duns’ outing of crime writer RJ Ellory as Amazon reviewer Nicodemus Jones that really kicked up a storm. It wasn’t enough that “Jones,” just one of a number of Ellory’s sock puppets, had a fawning love of Ellory’s books; he also had a particularly unpleasant attitude towards the works of Ellory’s competitors dismissing them as imitative and clichéd.

Reviewing your own work appears to breach Amazon’s review guidelines which prohibit “Sentiments by or on behalf of a person or company with a financial interest in the product or a directly competing product (including reviews by publishers, manufacturers, or third-party merchants selling the product)” but as far as Amazon is concerned there’s nothing wrong with knocking a competitor’s work even if you do it under an assumed name. When author Ian Mortimer wrote to Amazon to complain about criticism placed under his book by a rival author, Amazon just told him to add his own positive reviews.

Sock puppets aren’t new. The New York Times has a story from 2007 about executives using false identities in online forums. But if you’ve ever made a book-buying decision based on an Amazon recommendation, you could have been taken in by a master of crime.

The Eve Online Phaser Inc. Ponzi Scheme

The sock puppetry of authors was discovered following a confession, then an outing which prompted an apology from RJ Ellory. “Mordor Exuel” and  “Eddie Lampert” were less contrite last year following the discovery of their online fraud. The two players of Eve Online, a space-based MMORPG, set up Phaser Inc., an investment firm which promised to help players grow their ISK, the currency used in the game to buy ships, mods and other in-game items.

Right from the beginning though, the scheme was intended as a fraud. The goal was to steal more than 1 trillion ISK.

The pair began by spamming local chat channels and accepting invitations to private conversations. Gradually, they automated the process, using an API to update accounts while placing ads in emails. Within eight months, they’d taken in more than a trillion ISK, were spending as much time defrauding players as working in real life jobs, and called it a day.

The justification for their actions, posted on Eve News 24, was that they fitted the morality of a game in which players try to shoot each other.

“We went through the possible options to earn ISK and decided a scam would be the most profitable thing to do. The downside of a scam, however, is that other players lose the ISK that we gain. This was, at first, a rather large moral obstacle for both of us. We talked it over for quite a while and came to the decision that we could live with it. The main reason being that scramming people’s money is allowed by CCP. The game rules support – maybe even encourage – scam and fraud. It’s actually as much allowed as two players shooting one another in low and nullsec. Simply put: it’s part of the game.”

Players seemed to agree. More than the success of the scheme, the con artists were surprised by the messages of support they received — even from their victims.

UK Minister Sells Website Scraper

“Mordor Exuel” and  “Eddie Lampert” walked out of their scheme with a certain level of popularity. That’s harder to say of Grant Shapps. Previously the UK’s Housing Minister and now the chairman of the Conservative Party, Shapps was previously known as Michael Green — and Sebastian Fox — an Internet marketing expert responsible for TrafficPaymaster. The software package, which sells for $497, creates AdSense-supported Web pages by automatically rewriting the content of existing Web pages.

According to The Guardian Shapps has promised buyers that they could be making $20,000 in 20 days by putting Google’s ads on their automated pages. He says his wife now runs the firm.

Those figures were always unlikely. They’re even less likely to be realistic considering that Google has already found TrafficPaymaster to be in in “violation” of its policies regarding unoriginal content. Its algorithms will drop the ranking of any Web pages made with the software.

“We have strict policies in place to ensure web users are presented with useful ads when browsing sites in our content network and to ensure our advertisers reach an engaged audience. If we are alerted to a site which breaks our AdSense policies, we will review it and can remove it from our network,” the company told  The Guardian.

You might not be willing to spend $497 on a program that Google hates, but if you live in the UK, your taxes are paying the salary of the man who has sold it.

Web Scam Generates False Advertising

There’s nothing subtle about the one-page sales letter and oversized promises of TrafficPaymaster. One group of Estonians, though,  came up with a scam that was so quiet you wouldn’t have noticed it — if they hadn’t infected 100 computers at NASA, an act which brought in the FBI and the help of security firms.

The hackers first used infected websites to install malware on around half a million US computers. The malware did two things: it changed search results so that companies favored by the hackers were placed higher.  A search for “I.R.S.,” for instance, took users to tax preparers H&R Block who paid the swindlers a referral fee. And, even more cunningly, the software also swapped graphic ads on sites including Amazon and ESPN for ads that produced click revenue for the hackers.

Publishers would have felt a drop in their earnings, but users would have noticed little wrong.

Conning the Feds

Fortunately though, not all Internet con artists are as bright as the Estonians. In June 2010, undercover investigators set up their own website where hackers could meet, gather and swap tips — all under the eyes of the Feds. Among those arrested were a New Yorker who swapped the account details of fifteen credit card holders for a digital camera. He later complained that the model wasn’t exactly what he was looking for. The investigator who gave it to him might not have been the client he was looking for either.

The sting ran for two years and according to MercuryNews protected more than 400,000 potential victims and prevented losses of around $205 million.

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