Tag Archives: FBI

Online Dating and Relationship Scams

Valentine’s Day is around the corner, but if an online love interest asks you for money, it’s probably a scam.online-dating-scams-3_350

The Federal Trade Commission (FTC) receives thousands of reports each year about romance scammers who create fake online relationships only to rob their victims.

Millions of Americans use dating sites, social networking sites and chat rooms to meet people, but scammers use them too, and eventually the scammers ask for money.

The FTC’s new infographic, developed with the American Bankers Association Foundation, lists common signs of online dating scams and how to handle them.

How to Recognize a Scam

The relationship may not be what you think, especially if your sweetheart:

  • wants to leave the dating site immediately and use personal email or IM
  • claims love in a heartbeat
  • claims to be from the U.S., but is traveling or working overseas
  • plans to visit, but is prevented by a traumatic event or a business deal gone sour

Scammers also like to say they’re out of the country for business or military service.

What You Can Do About It

You may lose your heart, but you don’t have to lose your shirt, too. Don’t wire money to cover:

  • travel
  • medical emergencies
  • hotel bills
  • hospital bills for a child or other relative
  • visas or other official documents
  • or losses from a temporary financial setback

Don’t send money to tide someone over after a mugging or robbery, and don’t do anyone a favor by making an online purchase or forwarding a package to another country. One request leads to another, and delays and disappointments will follow. In the end, your money will be gone along with the person you thought you knew.

Report relationship scams to:

If you or your business have legal questions or concerns regarding computer law, privacy, or cybersecurity law matters, contact attorney Jeffrey A. Franklin at Prince Law Offices.

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BEC Attacks to Exceed $9B in 2018

Business email compromise is projected to skyrocket as attackers adopt sophisticated techniques to dupe their victims.

Business email compromise (BEC) attacks are projected to exceed $9 billion in 2018. The attacks continue to become more sophisticated and fleece more money from U.S. businesses.

How it works

There has been an increase of computer intrusions linked to BEC scams, involving fraudsters impersonating high level executives, sending phishing emails from seemingly legitimate sources, and requesting wire transfers to alternate, fraudulent accounts. In some cases these methods ultimately lead to successful intrusion and unfettered access to their victims’ credentials.

The Internet Crime Complaint Center (IC3) puts BEC attacks in five categories: Bogus Invoice Schemes, CEO Fraud, Account Compromise, Attorney Impersonation, and Data

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Theft. More information is available from the Federal Bureau of Investigation (FBI) IC3.

Growth Industry

The combination of simplicity and effectiveness have ensured that BEC will continue to be one of the most popular attacks according to a January 18, 2018 Trend Micro report “Delving into the World of Business Email Compromise (BEC).” Researchers analyzed BEC as a cybercriminal operation from January through September 2017, dissecting tools and strategies commonly used in these attacks to predict activity for this year.

The Internet Crime Complaint Center (IC3) puts BEC attacks in five categories: Bogus Invoice Schemes, CEO Fraud, Account Compromise, Attorney Impersonation, and Data Theft. In this case, researchers split them in two: Credential-grabbing and Email-only. Attackers must be proficient in at least one of these methods for the scheme to work, researchers report.

Defending against the scam

Businesses are advised to stay vigilant and educate employees on how to prevent being victimized by BEC scams and other similar attacks. It’s important to know that cybercriminals do not care about your company’s size—the more victims, the better. Additionally, cybercriminals need not to be highly technical as they can find tools and services that cater to all levels of technical expertise in the cybercriminal underground. Here are some tips on how to avoid these scams:

• Employee awareness and education is the first step. Organizations should train employees how to spot phishing attacks.

• Email is often used to perform BEC attacks, relying on deception and social engineering to trick employees into downloading files, visiting websites or providing information. End users should know what to look out for when it comes to email—as even the most convincing BEC attacks typically have telltale signs that can be used to distinguish a legitimate email from a malicious one.

• Verify the legitimacy of fund transfer requests, especially those that involve large amounts. Just because the request seemingly comes from an executive, it does not mean that it is legitimate. If possible, confirm the request directly with the person who sent the request if there is something unusual or suspicious about the request.

• For vendors and suppliers, organizations should verify payment requests and invoices before transferring funds. If the vendor or supplier suddenly provides a different payment location, consider it a red flag and verify the change via a secondary sign-off by company personnel.

• Any request should be verified and challenged. If the request comes in via email, making a phone call or face-to-face discussion with the person making the request to ensure its validity will help mitigate BEC attacks. Use known good telephone numbers, not those in the email.

• Building a culture of security within the organization from top to bottom.

What to do

If you suspect that you have been a victim of a BEC email, report the incident to your company and financial institution immediately.  Also, consider filing a complaint with the IC3 no matter how much the amount.

If you or your business have legal questions or concerns regarding computer law, privacy, or cybersecurity law matters, contact attorney Jeffrey A. Franklin at Prince Law Offices.

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Roses are Red, Violets are Blue, You’re a Trustee, So No Background Check For You!

In late March, I wrote an article questioning whether ATF directed FFLs to abuse the NICS system in “requiring” a background check on a trustee to be performed on the transfer of a silencer to a trust. Furthermore, I contended that a Pennsylvania FFL who utilized the PICS system to perform such a check was committing a felony of the third degree under state law.

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To my knowledge there is a legal service, who will remain unnamed, that advised Pennsylvania based FFLs to stop transferring silencers to trusts relying on the Dakota Silencer letter that had been published. Relying on the faulty logic that ATF utilized, the legal service concluded that because a trust is not defined as a person under the Gun Control Act of 1968, a trustee must undergo a background check in order to have the silencer transferred from the Pennsylvania FFL to the trustee. I am aware of several Pennsylvania FFLs who have either stopped transferring silencers to trustees or have required that individuals undergo background checks.

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Prior to the writing of the article I had submitted a Right to Know Law Request to the Pennsylvania State Police asking for:

…all records, including but not limited to, any and all communications (either internal or external), determinations, notes, documents, records, etc. regarding gun/firearms trusts and the Uniform Firearms Act 18 Pa.C.S. 6101, et seq. and whether a background check being performed on a trustee purchasing or receiving a transfer on behalf of the trust is necessary.

I received a response today granting my request in part and denying it in part. The denial was merely based on personal identifying information (phone numbers and email addresses which were redacted). You can find the documents here.

The response includes a chain of emails between Christopher Clark of the Pennsylvania State Police and Susan B. Whitman of ATF. Mr. Clark inquires of Mrs. Whitman whether “ATF requires a NICS check on a trustee picking up a silencer on behalf of a trust”.

Mrs. Whitman replies:

No, ATF does not require a PICS/NICS check or a silencer/suppressor or a NFA firearm. PSP requires a PICS check on all firearms including NFA firearms. Silencer/Suppressors do not meet the PA state definition of firearm.

(Emphasis added, misspellings original).

Mr. Clark then asks if it makes a difference if it is being transferred to a trust or corporation and that he received a call from an attorney who indicated to him that ATF told him there has to be a background check when it involves a trust.

Mrs. Whitman responds:

An ATF Form 4473 is required, but the NICS is not required if the firearm/silencer is subject to the provisions of the National Firearms Act (NFA) and has been approved for transfer. The licensee must keep an ATF Form 4473 on file for all NFA transfers.

Under PA State law, all firearm transfers/sales between licensees require a PICS, therefore the ATF Form 4473 for the NFA firearms would include completing the NICS section and conducting a PICS background check.

(Emphasis added).

atf reference

A look at the FAQs in the newest edition of the ATF’s Federal Firearms Regulations Reference Guide (Revised September 2014) has an entry P18: “Are there transfers that are exempt from the NICS background check requirement?” The answer in the guide is rather telling.

Firearm transfers are exempt from the requirement for a NICS background check in three situations. These include transfers: (1) to transferees having a State permit that has been recognized by ATF as an alternative to a NICS check; (2) of National Firearms Act weapons to persons approved by ATF; and (3) certi­fied by ATF as exempt because compli­ance with the NICS background check requirement is impracticable.

[18 U.S.C. 922(t); 27 CFR 478.102(d)]

(Emphasis added). ATF states in its Federal Firearms Regulations Reference Guide, which was updated after the letter sent to Dakota Silencer, that no NICS check is required for a NFA firearm to a person approved by ATF. Since all NFA firearm transfers have to be approved by ATF, there is only one conclusion to draw. No NICS check is required. Period.

Furthermore, the citation to the Brady Bill language in 18 U.S.C. 922 at the bottom of the FAQ references the same provision I cited in my previous article on the subject. The regulation that is referenced states:

(d) Exceptions to NICS check. The provisions of paragraph (a) of this section shall not apply if—…

(2) The firearm is subject to the provisions of the National Firearms Act and has been approved for transfer under 27 CFR part 479…

 

UPDATE:

As there have been some emails and comments on this post, it is appropriate to update it so there is no confusion. In PA and from what I understand, several other states, the definition of a firearm does not include a silencer. However, in PA SBRs, SBSs, Machine Guns and AOWs would require a FFL to conduct a PICS check as the definition of firearm would include those items. I apologize if anyone was misled. This was strictly in the context of a silencer. As always, consult with your legal counsel before making any decisions.

 

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Has ATF Directed FFLs to Abuse the NICS System?

It’s no secret that ATF told at least one FFL they need to run a NICS check on trustees picking up NFA firearms on behalf of a trust. In a letter addressed to Dakota Silencer, ATF explained:

The term “person” is defined by the GCA at 18 U.S.C. § 921(a)(1), to include “any individual, corporation, company, association, firm, partnership, society, or joint stock company.”

ATF has interpreted the GCA exception in sections 922(t)(3)(B) and 478.102(d)(2) to mean that firearms transfers are exempt from a NICS check when they have been approved under the NFA to the person receiving the firearm. Unlike individuals, corporations, partnerships, and associations; unincorporated trusts do not fall within the definition of “person” in the GCA.

Because unincorporated trusts are not “persons” under the GCA, a Federal firearms licensee (FFL) cannot transfer firearms to them without complying with the GCA. Thus, when an FFL transfers an NFA firearm to a trustee or other person acting on behalf of a trust, the transfer is made to this person as an individual (i.e., not as a trust). As the trustee or other person acting on behalf of the trust is not the approved transferee under the NFA, 18 U.S.C. 5812, the trustee or other person acting on behalf of a trust must undergo a NICS check. The individual must also be a resident of the same State as the FFL when receiving the firearm.

This interpretation is what spawned the blog post “Did ATF’s Determination on NICS Checks Open the Door for Manufacture of New Machineguns for Trusts”  by Chief Counsel Joshua Prince. And as we all know, the NFA Examiners issued a number of approved Form 1s before they had to recall them due to an “error”.

Since this letter was published, a number of FFLs either on their own accord or through advice of counsel have begun to perform background checks when transferring NFA Firearms to trustees. But is this actually required?

A person under the National Firearms Act is defined in 26 U.S.C.A. § 7701:

The term “person” shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.

As defined in the National Firearms Act of 1934, the term firearm means:

 (1) a shotgun having a barrel or barrels of less than 18 inches in length; (2) a weapon made from a shotgun if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 18 inches in length; (3) a rifle having a barrel or barrels of less than 16 inches in length; (4) a weapon made from a rifle if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 16 inches in length; (5) any other weapon, as defined in subsection (e); (6) a machinegun; (7) any silencer (as defined in section 921 of Title 18, United States Code); and (8) a destructive device. 26 U.S.C.S § 5845(a)

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As defined in the Gun Control Act of 1968, the term firearm means:

(A) any weapon (including a starter gun) which will or is designed to or may readily be converted to expel a projectile by the action of an explosive; (B) the frame or receiver of any such weapon; (C) any firearm muffler or firearm silencer; or (D) any destructive device. Such term does not include an antique firearm. 18 U.S.C. § 921(a)(3)

So what’s the big deal you ask? There are a few different issues that need to be addressed.

First, does the GCA of 1968 even APPLY to trusts? As Section 921(a)(1) does not define the term “person” to include an unincorporated trust, there is nothing in the GCA to indicate a trust falls under its purview! As Chief Counsel Joshua Prince pointed out to me in our discussions on this topic, ATF has said that a trust cannot hold an FFL because trusts, by definition, are not a person under the GCA and thus do not fall into the purview of 18 U.S.C. § 923. Yet, in the same breath, ATF is stating that trustees need to have a background check performed when they pick up a NFA item! How is it that ATF can refuse an FFL to a trust, because it is not a person under the GCA and refuse to pierce through the trust to an actual person, while requiring an FFL to, in essence, pierce through the trust to perform a background check for an NFA item?

It would seem that ATF is directing at least one FFL to perform a background check that I can find no legal requirement to perform. To my knowledge there has not been an industry wide newsletter or open letter directing that FFLs perform such a check. And even if there were, there is nothing I can find in the law to suggest that it is actually required.

ATF in a 2011 newsletter to FFLs, addressed the licensing of trusts under federal firearms law. ATF stated that only a person under the GCA could obtain a FFL. ATF went on to say that under Section 921:

“The term ‘person’ does not include trusts.”

In a 2008 newsletter to FFLs, ATF addressed the transfer of a National Firearms Act firearm to a corporation or other legal entity.

Procedure after approval
Approved NFA transfers are exempt from the NICS background check. So, when the FFL arranges for the disposition of the NFA firearm to a representative of the corporation or other entity, only the ATF
Form 4473, Firearms Transaction Record, must be completed by the representative of the corporation or other entity.

Furthermore, the NICS system isn’t even run by ATF. FBI is responsible for NICS and for what purposes it can be used. 28 C.F.R. § 25.6 provides:

(a) FFLs may initiate a NICS background check only in connection with a proposed firearm transfer as required by the Brady Act. FFLs are strictly prohibited from initiating a NICS background check for any other purpose.

The Brady Act amended § 922 along with a few other sections of Chapter 44.

Looking at 18 U.S.C. § 922(t)(1), it provides:

Beginning on the date that is 30 days after the Attorney General notifies licensees under section 103(d) of the Brady Handgun Violence Prevention Act that the national instant criminal background check system is established, a … licensed dealer shall not transfer a firearm to any other person who is not licensed under this chapter, unless—
(A) before the completion of the transfer, the licensee contacts the national instant criminal background check system established under section 103 of that Act;

Section 922(t)(3) provides:

Paragraph (1) shall not apply to a firearm transfer between a licensee and another person if–…

(B) the Attorney General has approved the transfer under section 5812 of the Internal Revenue Code of 1986;…

If the Attorney General approved the transfer under Section 5812 of the Internal Revenue Code then no NICS check is required. But the devil is in the details. We are talking about a transfer from a licensee to a person and a trust is not a person as defined in 18 U.S.C. § 921. Since the licensed dealer isn’t transferring the firearm to a person, how could the GCA apply at all? Furthermore, why does it matter that the trustee or person acting on behalf of the trust is not the approved transferee under 26 U.S.C. § 5812? What makes them so special that they need a NICS check performed? A person who comes in to pick up a NFA firearm on behalf of a corporation or a LLC isn’t the approved transferee. Yet, ATF doesn’t seem to have any qualms about that individual picking up a NFA firearm without a NICS check under the 18 U.S.C. § 922(t)(3)(B) exemption.

Moreover, 28 C.F.R. § 25.6 prohibits FFLS from utilizing the NICS system for any other purpose than required by the Brady Act. Ostensibly, FFLs cannot comply with what ATF purportedly wants them to do; access NICS to perform a background check on a Trustee picking up a NFA firearm.

Utilizing the NICS system for purposes other than allowed by Subpart A of the National Instant Criminal Background Check System as defined by 28 C.F.R. §§ 25.1-25.11 shall result in a fine not to exceed $10,000 and the possible cancellation of NICS inquiry privileges. Which can more or less be read as the loss of ability to conduct business as a FFL, if it is canceled.

Even if the NICS query would not be illegal to perform, there is another issue under Pennsylvania law!

Pennsylvania defines firearm very differently. In 18 Pa.C.S. § 6102 a firearm is defined as:

Any pistol or revolver with a barrel length less than 15 inches, any shotgun with a barrel length less than 18 inches or any rifle with a barrel length less than 16 inches, or any pistol, revolver, rifle or shotgun with an overall length of less than 26 inches. The barrel length of a firearm shall be determined by measuring from the muzzle of the barrel to the face of the closed action, bolt or cylinder, whichever is applicable.

As you are probably aware, the Pennsylvania State Police act as a point of contact for the NICS system. However, Pennsylvania law only allows for limited uses of the PICS system. These uses are defined in 18 Pa.C.S. § 6111.

psp

Section 6111(b) requires that:

No … licensed dealer shall sell or deliver any firearm to another person … until the conditions of subsection (a) have been satisfied and until he has:

(1) For purposes of a firearm as defined insection 6102 (relating to definitions), obtained a completed application/record of sale from the potential buyer or transferee…

(2) Inspected photoidentification of the potential purchaser or transferee…

(3) Requested by means of a telephone call that the Pennsylvania State Police conduct a criminal history, juvenile delinquency history and a mental health record check.

(4) Received a unique approval number for that inquiry from the Pennsylvania State Police and recorded the date and the number on the application/record of sale form.

(5) Issued a receipt containing the information from paragraph (4), including the unique approval number of the purchaser….

Section 6111(f)(1) provides:

For the purposes of this section only … “firearm” shall mean any weapon which is designed to or may readily be converted to expel any projectile by the action of an explosive or the frame or receiver of any such weapon.

Even with the expanded definition of firearm for the purposes of this section, a silencer does not fit into the criteria spelled out by the General Assembly!

So what does all of this mean?

Section 6111(g)(3) states:

Any … licensed dealer … who knowingly and intentionally requests a criminal history, juvenile delinquency or mental health record check or other confidential information from the Pennsylvania State Police under this chapter for any purpose other than compliance with this chapter … commits a felony of the third degree.

Even if FFLs could contact NICS to perform a background check on a trustee when delivering a NFA Firearm without abusing the system, a Pennsylvania FFL will be committing a felony of the third degree under state law!

nics

FFLs who are conducting background checks on trustees due to their interpretation of the Dakota Silencer letter or legal advice they received may wish to inquire with their counsel as to whether or not they actually need to perform one. There does not appear to be any basis in the law for such a requirement. Section 921 does not include an unincorporated trust in the definition of a “person” and the Attorney General would have approved the transfer under 26 U.S.C.A. § 5812 to the trust!

 

UPDATE:

As there have been some emails and comments on this post, it is appropriate to update it so there is no confusion. In PA and from what I understand, several other states, the definition of a firearm does not include a silencer. However, in PA SBRs, SBSs, Machine Guns and AOWs would require a FFL to conduct a PICS check as the definition of firearm would include those items. I apologize if anyone was misled. This was strictly in the context of a silencer. As always, consult with your legal counsel before making any decisions.

 

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Gun Control Proponent Leland Yee Charged With Brokering Arms Deals for Automatic Weapons and Missiles.

We told you earlier we would bring you an update when Leland Yee’s Arrest Affidavit was released, well it was released a little while ago, and it is far more than the base corruption and bribery reported earlier. It appears that Yee was also brokering major arms deals. The San Diego Union-Tribune reported that:

The allegations against State Sen. Leland Yee were outlined in an FBI affidavit in support of a criminal complaint. The affidavit accuses Yee of conspiracy to deal firearms without a license and to illegally import firearms.

…..

Yee discussed helping the agent get weapons worth $500,000 to $2.5 million, including shoulder fired automatic weapons and missiles, and took him through the entire process of acquiring them from a Muslim separatist group in the Philippines to bringing them to the United States, according to the affidavit by FBI Special Agent Emmanuel V. Pascua.

As we said earlier, we are strong proponents of presenting primary sources to our readers: here is a link to the arrest affidavit that the San Francisco Gate is hosting. Along with Wire Fraud charges Leland Yee is being charged with violations of Title 18, United States Code, Section 371, 922(a)(1) and 922(l) (Conspiracy to Deal Firearms Without a Licence and to Illegally Import Firearms). A discussion of the evidence related to this begins on page 83. Page 84 has a passage where Lee is stated to have asked the undercover agent whether he wanted automatic weapons as opposed to semi-automatic firearms.

Here is an except from the arrest affidavit detailing that passage.

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We will continue to bring you more updates as they are released.

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BREAKING NEWS: Noted Gun Control and Video Game Censorship Proponent Leland Yee Arrested for Bribery and Corruption

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Image Courtesy of Senator Leland Yee’s Official Senate Website

Leland Lee is well known for his “crusade” to ban bullet buttons* and “violent video games”**, and he’s also now becoming well known for being arrested for bribery and corruption and possible ties to the triads.

ABC 7 in San Francisco reported

Sources confirm to ABC7 News that State Senator Leland Yee has been arrested on public corruption charges.

 

Yee was transported in handcuffs by authorities to the Federal Building in San Francisco.

 

A series of search warrants are being executed by the FBI across the Bay Area this morning. ABC7 News has learned they are making numerous arrests in a widespread sweep involving suspected gang members.

NBC Bay Area reporter Diane Dwyer posted this picture of Senator Yee being arrested by the FBI

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This is a breaking story and as soon as we get access to any primary sources such as copies of the warrants or any indictments, we’ll add links to them here.

*A bullet button is device which makes many modern semi-automatic sporting rifles compliant under California law, as the firearm is judged to no longer have a detachable magazine under California law. This ensures that the firearm is not subject to bans based on certain cosmetic features under California’s onerous (as shown in this CalGuns Flowchart) “Assault Weapon” laws.

**The law, AB1179 which was championed by Lee, was ruled unconstitutional as a violation of the 1st Amendment by the United States Supreme Court in 2010’s Brown v. Entertainment Merchants Association.

 

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