- The Washington Times - Thursday, November 20, 2003

More than 125 people have been charged in a nationwide raid of computer hackers, identity thieves and other Internet criminals as part of a federal investigation called Operation Cyber Sweep, Attorney General John Ashcroft said yesterday.

The joint Justice Department and Department of Homeland Security probe, coordinated by 34 U.S. attorneys’ offices, the FBI, the U.S. Postal Inspection Service, the Federal Trade Commission, the Secret Service and the Bureau of Immigration and Customs Enforcement, targeted online economic crimes involving schemes including fraud, software piracy and the fencing of stolen goods.

The investigation, Mr. Ashcroft said, exposed the ways in which economic crimes are becoming increasingly global and multijurisdictional in nature.

“Online criminals assume that they can conduct their schemes with impunity,” Mr. Ashcroft said. “Operation Cyber Sweep is proving them wrong, by piercing the criminals’ cloak of anonymity and prosecuting them to the fullest extent of the law.”

The attorney general said the investigation, which began Oct. 1, uncovered more than 125,000 victims with estimated losses of more than $100 million. More than 90 search and seizure warrants were executed as part of the operation, he said, and prosecutors have obtained more than 70 indictments.

One of the cases centered on an Internet operation in Virginia and Tennessee.

Mr. Ashcroft said K.C. Smith, 21, pleaded guilty to two felony charges of securities fraud and admitted to using the Internet in 2002 to promote a fraudulent scheme that promised investors high returns on their “international tax-free” investments in the “Maryland Investment Club,” which was a fictitious enterprise.

After moving to Tennessee, Smith continued advertising his bogus enterprise through the use of unsolicited bulk e-mail, commonly referred to as spam, Mr. Ashcroft said. Smith was sentenced to 14 months in prison.

Mr. Ashcroft said another Virginia resident, Helen Carr, pleaded guilty to conspiracy to possess unauthorized access devices. He said she sent out fake e-mail messages to America Online customers, claiming to be an AOL representative and advising customers they must update their credit-card and personal information on file to maintain their accounts.

“Cyber-crime will continue to be one of the FBI’s highest priorities for the foreseeable future,” said FBI Assistant Director Jana Monroe. “The results of Operation Cyber Sweep should send a clear warning to those criminals who exploit technology and use the Internet to commit criminal acts. The FBI, in conjunction with our law enforcement and private-sector partners, will move swiftly and aggressively to pursue these criminals worldwide.”

Operation Cyber Sweep was begun in response to an increase in the reporting of Internet-related complaints to federal agencies, Mr. Ashcroft said.

The Internet Fraud Complaint Center (IFCC), a joint project of the FBI and the National White-Collar Crime Center, reported that in the first nine months of 2003, it referred 58,392 Internet-related fraud complaints to law enforcement. In contrast, in all of calendar year 2002, the IFCC referred about 48,000 Internet-related fraud complaints to law enforcement.

The FTC reported that more than half of the 218,000 fraud complaints it received in 2002 were Internet-related.

Operation Cyber Sweep was a follow-up to Operation E-Con, announced by Mr. Ashcroft in May. E-Con resulted in the execution of 70 search and seizure warrants and charges against more than 130 people.


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