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Thursday, 12 April, 2001, 16:49 GMT 17:49 UK
Net fraud scam foiled
graphic of web fraud
An internet fraud, involving the issue of fake banking guarantees worth nearly $4bn (2.8bn) has been uncovered by the International Chamber of Commerce (ICC).

The ICC's Commercial Crime Services unit, which polices financial breaches on the net, said the fraudsters had published fake European banking guarantees on at least 29 different websites.


The amounts...on the fraudulent sites ranged from $50m to over $400m


Jon Merrett, ICC

The aim was to lure potential clients into investing in projects and finance schemes.

The web addresses gave the impression that the fake sites were run by legitimate organisations.

"Advance fees of hundreds of thousands of dollars were paid for the issue of these fraudulent guarantees, and the websites were used to validate the documents," said Jon Merrett of the ICC's cybercrime unit.

"The amounts represented on the sites ranged from $50m to over $400m," he added.

At least ten cases of victims being duped had emerged so far, the ICC said, with one US businessman being conned out of $70,000.

The ICC approached the fraudster's Internet Service Provider who complied with their request to shut down the offending sites.

Worldwide operation

But the masterminds behind the fraud are still at large and could be running other online fraud schemes, said Jon Merrett.

"We believe two people were arrested in Switzerland and two in San Francisco, but we don't think anything came of that as they were not the masterminds," he said.

"It is definitely organised crime".

The fraud operated in the US and in Asia, but the false guarantees had been presented to banks in several countries, including the UK, Merrett said.

The sites were hosted by an ISP in the US.

Cyber crime up

Online fraud is on the rise worldwide, with criminals playing on the anonymity of the web and the difficulty in policing it.

Even if a fraudster is tracked down and caught, they can be very difficult to prosecute as the authorities have to find out where they have committed the crime.

Internet Service Providers, which generally offer free web space for their clients and email addresses, do not do any checks on the people setting them up.

Online credit card fraud runs into billions of US dollars.

There are also fears about online security in internet banks.

One estimate has put web fraud at more than 50 billion euros (US$45bn) every year.

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See also:

30 Mar 00 | Americas
US regulators fight internet fraud
24 Mar 00 | Business
US leads internet fraud sweep
13 Nov 00 | UK Politics
'Cyber cops' plan unveiled
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