Anatomy of an Internet scam

July 9th, 2007 Posted by ZDNet Government @ July 9, 2007 @ 4:13 PM

Through persistence and tech savvy, a tenacious San Jose detective has uncovered a Internet crime ring that sheds light on how these criminals carry out their digital thievery, reports the San Jose Mercury News.

In just five months, Detective Mike Niehoff uncovered a massive Internet fraud ring that used Craigslist, eBay and PayPal to steal tens of thousands of dollars from San Francisco Bay Area consumers.

Alvin Ma, 23, and Calvin Ma, 21, and two other members of an Interent crime ring were convicted of stealing credit card numbers through a phishing scheme. They used the stolen numbers to buy and sell goods over the Internet. The Ma brothers used a free software program called Dark Mailer to create emails with fake headers that appeared to be from AOL or PayPal.

"It's quite easy to make up an email that looks just like it's coming from a legitimate company," said Robert Chestnut, eBay's global head of trust and safety. "Everybody gets these phishing emails with the eBay logo and PayPal logo, the Bank of America logo, the Amazon logo. . . . They send them to me at eBay."

Santa Clara police received a complaint by Darin Petersen, 33, after he sold his Apple Powerbook a San Jose woman calling herself "Henrietta Johnson." She transferred $1,35 to Petersen's PayPal account and sent her "husband" to pick it up. Two weeks later, the PayPal payment was cancelled.

Not one to give up, Petersen then drove to the San Jose address and discovered that someone else was using Johnson's account. That's when Detective Niehoff took over.
Peterson had the knowledge to provide the IP address of thief who had posed as Henrietta Johnson. Neihoff was then able to get a warrant so as to match it up with a real person.

Neihoff traced the IP address to 49-year-old Greson Ma in Daly City, CA. His sons, Alvin and Calvin had been arrested before for using stolen credit cards to buy stuff on the Internet.

Clean-cut honors students living in a nice Daly City neighborhood, the Ma brothers lived a double life. On the laptop Niehoff took from the Ma home, he found a template for the phishing Web site "AOL.com Billing Central," along with more than 20,000 AOL email addresses.

Along with computers, the Ma brothers plus two others bought more than $50,000 worth of Xboxes and Rolexes over the Internet with stolen credit cards. All four of the men struck plea bargains and are serving time in San Quentin.