Sometime last year computers at the U.S. Social Security Administration were hacked and the identities of millions of Americans were compromised. What, you didn’t hear about that? Nobody did.
The extent of damage is only just now coming to light in the form of millions of false 2011 income tax returns filed in the names of people currently receiving Social Security benefits.
I’ve heard a few stories, over the years, of what happens when collectors who own art try to sell that art through a gallery. In the first instance, the gallery is always very bullish, and promises to sell it for a high price at a modest commission. But then it somehow never sells, and the consignor becomes increasingly desperate, and eventually accepts a sum of money from the gallery which is a mere fraction of the amount originally mooted. It’s a standard m.o. in the gallery world: never sell anything too quickly, and wait instead for the seller’s need for cash to be as urgent as possible. That minimizes the amount the gallery needs to pay the seller, and therefore maximizes the amount the gallery can keep for itself. (…)
In a nutshell, Jan’s no-good son Charles got desperate for cash, and so sold her Lichtenstein through Gagosian without her knowledge or consent. What’s more, his desperation was so obvious to Gagosian that he wound up getting spectacularly ripped off: while Gagosian had initially promised him $2.5 million for the piece, the final payment to Cowles was just $1 million. (…)
No matter who wins the legal case, is that the opacity, skullduggery, and information asymmetry in the art world should put off anybody who ever thinks they’re dealing fair and square with a prominent dealer.
A new study led by two Florida State University marketing professors finds that some frontline service employees who are rewarded for hikes in customer loyalty and satisfaction also may engage in “service sweethearting,” a clandestine practice that costs their employers billions of dollars annually in lost revenue.
The study, the first to examine the employee and customer sides of this activity, will appear in the upcoming issue of the Journal of Marketing, a publication of the American Marketing Association. It identifies traits that may predispose some employees toward service sweethearting and may aid employers in weeding them out of the candidate pool. The study also reveals that in cases of sweethearting, customer loyalty is tied to the rogue employee rather than the company, so that firing the employee actually hurts the firm’s ability to retain customers.
The term service sweethearting describes the behavior of employees who provide friends and acquaintances with food and beverages or other free services that never appear on the bill. Though the practice is most prevalent in the hospitality industry, the potential for such behavior exists in any industry in which employees interact with customers at the point of sale, according to the study. In a retail setting, for example, a cashier may slide a product around a bar-code scanner, giving the false impression that a friend is paying for the item.
Two men have been arrested for installing “skimmers” on 11 separate Chase ATMs near Union Square in January. They stole $300K altogether. Maybe some was yours!
related { Using a credit card induces euphoria, new research shows. }
For most people, the term art crime invariably brings to mind images of daring museum break-ins, the theft of million-dollar paintings, and the stylish, sexy thieves who mastermind them.
In reality, high-value museum thefts are the exception rather than the rule. As retired FBI Art Crime Team Special Agent Bob Wittman recounts in his memoir, “art theft is rarely about the love of art or the cleverness of the crime, and the thief is rarely the Hollywood caricature. (…) Nearly all the art thieves I met in my career had one thing in common: brute greed. They stole for money, not beauty.”
Selbee bought $307,000 worth of $2 tickets for a relatively obscure game called Cash WinFall, tying up the machine that spits out the pink tickets for hours at a time. Down the road at Jerry’s Place, a coffee shop in South Deerfield, Selbee’s husband, Gerald, was also spending $307,000 on Cash WinFall. Together, the couple bought more than 300,000 tickets for a game whose biggest prize - about $2 million - has been claimed exactly once in the game’s seven-year history.
But the Selbees, who run a gambling company called GS Investment Strategies, know a secret about the Massachusetts State Lottery: For a few days about every three months, Cash WinFall may be the most reliably lucrative lottery game in the country. Because of a quirk in the rules, when the jackpot reaches roughly $2 million and no one wins, payoffs for smaller prizes swell dramatically, which statisticians say practically assures a profit to anyone who buys at least $100,000 worth of tickets.
photo { Kate Peters }
After the U.S.-led invasion of Iraq in March 2003, the George W. Bush administration flooded the conquered country with so much cash to pay for reconstruction and other projects in the first year that a new unit of measurement was born.
Pentagon officials determined that one giant C-130 Hercules cargo plane could carry $2.4 billion in shrink-wrapped bricks of $100 bills. They sent an initial full planeload of cash, followed by 20 other flights to Iraq by May 2004 in a $12-billion haul that U.S. officials believe to be the biggest international cash airlift of all time.
This month, the Pentagon and the Iraqi government are finally closing the books on the program that handled all those Benjamins. But despite years of audits and investigations, U.S. Defense officials still cannot say what happened to $6.6 billion in cash.
The widely publicized hack of Sony’s computer networks is worse than previously thought, also affecting 24.6 million Sony Online Entertainment network accounts. (…)
Add this to the 77 million accounts that may have been compromised last week, and Sony is responsible for one of the largest recorded data breaches.
{ Computer World | Continue reading }
Remember, after the recent earthquake and tsunami in Japan, those stories about wallets filled with money being found and turned-in to the authorities, still stuffed with cash? That’s one positive aspect of Japanese culture, but does it also make them too trusting? (…)
“For whatever reason (low crime rate, maybe?),” my reader says, “the Japanese cannot seem to get their heads around the fact that unencrypted cardholder data sitting on servers in unsecured areas and being transmitted across public networks is a bit of a risk. Every other country in Asia has grasped this easy concept, but not Japan. (…)
I can’t imagine such exposed servers having not been repeatedly explored by bad guys over the past two years. That information isn’t just vulnerable, it is gone.
We sat around night after night getting stoned and trying to come up with original ideas to make money. Since Bo was broke, we decided that we would do two banks, one after the other, and use the distraction of the first to reduce the police presence at the second. We also wanted a natural barrier between the banks, some type of separation that would slow down the response from the first bank to the second. The simplest would be mountains or a river, something natural. (…)
Finally, we decided on our first bank, which was staffed by women. It was about two-and-a-half miles from the big bridge. It was sort of on the edge of a residential area. There was an easy exit to the main street and an adjacent residential street where we could change cars or follow the street all the way back to the bridge on-ramp by staying off the main avenue. For some reason, cops always want to go to the bank after it’s been robbed. They know you won’t be there, but they still go.
JamesMTitus was manufactured by cyber-security specialists in New Zealand participating in a two-week social-engineering experiment organized by the Web Ecology Project. Based in Boston, the group had conducted demographic analyses of Chatroulette and studies of Twitter networks during the recent Middle East protests. It was now interested in a question of particular concern to social-media experts and marketers: Is it possible not only to infiltrate social networks, but also to influence them on a large scale?
The group invited three teams to program “social bots”—fake identities—that could mimic human conversation on Twitter, and then picked 500 real users on the social network, the core of whom shared a fondness for cats. The Kiwis armed JamesMTitus with a database of generic responses (“Oh, that’s very interesting, tell me more about that”) and designed it to systematically test parts of the network for what tweets generated the most responses, and then to talk to the most responsive people.
After the first week, the teams were allowed to tweak their bot’s code and to launch secondary identities designed to sabotage their competitors’ bots.
Microsoft’s recent takedown of the world’s largest spam engine offered tantalizing new clues to the identity and earnings of the Rustock botmasters. The data shows that Rustock’s curators made millions by pimping rogue Internet pharmacies, but also highlights the challenges that investigators still face in tracking down those responsible for building and profiting from this complex crime machine.
Earlier this month, Microsoft crippled Rustock by convincing a court to let it seize dozens of Rustock control servers that were scattered among several U.S.-based hosting providers. Shortly after that takedown, I began following the money trail to learn who ultimately paid the botnet controllers’ hosts for their services.
According to interviews with investigators involved in the Rustock takedown, approximately one-third of the control servers were rented from U.S. hosting providers by one entity: A small business in Eastern Europe that specializes in reselling hosting services to shadowy individuals who frequent underground hacker forums.
{ In 1900, a German named Wilhelm von Osten displayed to the public his horse, Clever Hans (Kluge Hans), who was apparently able to perform mathematical calculations. | Encyclopedia of Claims, Frauds, and Hoaxes of the Occult and Supernatural | Continue reading }
The police began sorting through a trove of physical evidence. In Wells’ car, they discovered the 2-foot-long cane, which turned out to be an ingeniously crafted homemade gun. The bomb itself was likewise a marvel of DIY design and construction. The device consisted of two parts: a triple-banded metal collar with four keyholes and a three-digit combination lock, and an iron box containing two 6-inch pipe bombs loaded with double-base smokeless powder. The hinged collar locked around Wells’ neck like a giant handcuff. Investigators could tell that it had been built using professional tools. The device also contained two Sunbeam kitchen timers and one electronic countdown timer. It had wires running through it that connected to nothing—decoys to throw off would-be disablers—and stickers bearing deceptive warnings. The contraption was a puzzle in and of itself.
The most perplexing and intriguing pieces of evidence, though, were the handwritten notes that investigators found inside Wells’ car. Addressed to the “Bomb Hostage,” the notes instructed Wells to rob the bank of $250,000, then follow a set of complex instructions to find various keys and combination codes hidden throughout Erie. It contained drawings, threats, and detailed maps.
{ The Incredible True Story of the Collar Bomb Heist | Wired | Continue reading }
The number of financial fraud cases put before the UK’s courts reached record levels in 2010, a report suggests. (…)
KPMG also highlighted the case of a group of men who were accused of using stolen credit card details to buy their own songs on iTunes, generating almost half a million pounds in royalties.
The men targeted the Apple and Amazon sites with 20 songs which they sold through the websites.
It is thought they then stole approximately 1,500 credit cards to buy the songs, and claimed back just under £469,000 in royalties.
{ BBC | Continue reading | via Chris Charfin/prefix }
photo { Moyra Davey }
Can we not tell an authentic literary work from a fabricated one? The answer is: no, we cannot tell, and never could. We have no real idea how many of the works that we treasure are the fruit of a literary hoax.
The fountainhead of the Western novel, Cervantes’s Don Quixote (1605), claims to be only a rough translation of a prior work in Arabic, which it is not. (…) André Makine’s first four novels, “translated from Russian by Françoise Bour” according to their title pages, were written in French. (…) The longest-running hoax of this kind are the exquisite Letters of a Portuguese Nun that first appeared in French translation in 1669 and were read, studied, and translated until 1954, when Leo Spitzer identified them beyond dispute as the work of Guilleragues, a friend of Jean Racine, who wrote them in French. (…)
Human speech has existed for a hundred thousand years and maybe even longer, but writing is a recent development - only five thousand years old - and we’re still getting used to it. There’s no problem knowing who said something, and knowing also that the meaning, force and value of what’s said depends on the person who said it. (…)
The greatest scam of all literature (excluding those we don’t yet know about!) happened in Paris between 1974 and 1981. A well-established, widely-read novelist with an unfashionable profile among the literati of Saint-Germain-des-Prés - he was a war hero, a Gaullist, a millionaire, a jet-set celebrity, an ex-diplomat, the ex-husband of one of the world’s most beautiful women, and a journalist to boot - published a novel under a false name. In itself that is quite ordinary: Molière, Voltaire, George Sand and George Eliot didn’t use their real names either. But Romain Gary’s special twist was to make sure that his publisher didn’t know who the author of the new novel was either, and that took a good deal of extra-literary cloak-and-daggery. The manuscript was handed in by an accomplice in an envelope that purported to come from a French exile living in Brazil. Against all statistical odds, the publisher’s reader spotted the text–called at this stage The Loneliness of a Python in Paris, and recommended it strongly to the editorial board. A contract was signed by exchange of letters with a fictional entity called Emile Ajar, and Gary had another unwitting accomplice sign it, so he should not himself be guilty of forgery. Gros-Câlin - the title finally chosen by the publisher - appeared in the autumn of 1974 and was a runaway success. An entirely fictitious author-biography was circulated, and accepted as true. Gary set about writing the sequel, which turned out to be the highest-selling French novel of the twentieth century: La Vie devant soi (”Life Before Us”) by Émile Ajar, to which the Académie Goncourt awarded its 1975 prize, the greatest accolade available for a French novelist, including non-existent ones.
But what had started as a change of writerly identity and an escape from a public persona that Gary found increasingly oppressive turned into a quite different kind of experiment. Because a Goncourt Prize puts the author into the media spotlight, and because neither the publishers nor the press had yet met “Emile Ajar”, Gary decided he would create him - not on paper, but for real. He enrolled his cousin’s son, Paul Pavlowitch, to play the role of Ajar in interviews and in discussions with publishers. Gary would write the script and fund all the travel (meetings were held in Geneva and Copenhagen, as the Ajar cover story made the writer a fugitive from French justice). Pavlowitch just had to follow the instructions. But the identity of the stooge was discovered by reporters, and his relationship to Gary uncovered. What Gary then did took literary subterfuge into a different realm. Instead of giving his game away and exulting in the victory of literature over the literary establishment, he doubled the stakes and lied his head off. No, he was not Emile Ajar And yes, it was quite flattering that his younger second cousin had been influenced by his own writing. Even so, the bloodhounds seemed too close to the kill, so Gary holed up in his retreat in Geneva and dashed off a double-hoax to put them off the scent for ever. Calling it Pseudo - a flagrant use of a literal truth to mislead the reader entirely - Gary penned a feverish, lunatic, fabricated confession by Paul Pavlowitch, saying that he was indeed Emile Ajar, and that he was insane. (…)
In this meta-fraud of a book, Gary tells the strict truth - but by packaging it as the ravings of a pseudonymous lunatic he persuaded everybody that Émile Ajar was indeed Pavlowitch and that Pavlowitch was mad. (…) The secret was kept until after Gary’s death.
Niagara Falls’ descent into blight—in spite of its proximity to an attraction that draws at least 8 million tourists each year—is a tale that Hudson’s little newspaper has been telling for years. It encompasses just about every mistake a city could make, including the one Frankie G. cited: a 1960s mayor’s decision to bulldoze his quaint downtown and replace it with a bunch of modernist follies. There was a massive hangar-like convention center designed by Philip Johnson; Cesar Pelli’s glassy indoor arboretum, the Wintergarden, which was finally torn down because it cost a fortune to heat through the Lake Erie winter; a shiny office building known locally as the “Flashcube,” formerly the headquarters of a chemical company and now home to a trinket market. Once a hydropowered center of industry, Niagara Falls is now one of America’s most infamous victims of urban decay, hollowed out by four decades of job loss, mafia infiltration, political corruption, and failed get-fixed-quick schemes. Ginger Strand, author of Inventing Niagara: Beauty, Power, and Lies, called the place “a history in miniature of wrongheaded ideas about urban renewal.”
photo { Paul Rodriguez }
I scammed department stores and gyms and book chains. You’d be surprised how easy it was to lie — and get away. (…)
In those days, J.C. Penney had the loosest return policy. No receipt? No tags? No problem. They gave the item a once-over and found something comparable in quality to gauge the price. Most stores issued a gift card to a customer without any real evidence of purchase; J.C. Penney always gave cash. (…)
I must have pocketed $150 to $200 in books every month for the better part of a year. My biggest single score came when I discovered a dollar store that sold remainders. I bought a hardcover about Richard Nixon with a list price of $35, walked it to the bookstore and left with a gift card for the full amount. Then I went back to the dollar store and bought all eight remaining copies, returning them sporadically over the next year.
Zak gave 4 millilitres of oxytocin or a placebo saline solution to 40 male volunteers in the form of a nasal spray. The volunteers were then shown 16 commercials seeking to curtail smoking, drinking, speeding, and global warming. (…)
Significantly more people who had been given oxytocin donated money than those given saline. They also donated on average 57 per cent more money. The results were presented this week at the Society for Neuroscience annual meeting in San Diego.
Oxytocin is well-known for its role in empathy and trust, though is currently only available on prescription. As a result, at the moment it can’t be used by advertisers to persuade us to feel more favourable towards their product, though many make sure their adverts contain images that evoke bursts of natural oxytocin, such as children and pets, says Zak.
illustration { Jessica Hische }
