FBI steps up efforts against ‘money mules’ online fraud
By ERIC TUCKER and MICHAEL BALSAMO
Thursday, December 27
WASHINGTON (AP) — The email caught the executive at a small company by surprise one morning in 2016. The company’s owner, or so he thought, was requesting a money transfer to pay for supplies from a new vendor.
It wasn’t until that night when the executive, hours after the money had been transferred and still puzzled by the out-of-the-blue demand, texted the owner to make sure he’d heard the request correctly.
The befuddled reply was disheartening: “I just saw your message about a wire transfer today. What is that about?”
It was all part of a fraud scam that targeted companies, schools and nonprofits in Connecticut and elsewhere in the United States and that resulted this month in a 45-month prison sentence for one of the culprits. The case is part of a seemingly endless cycle of money laundering schemes that law enforcement officials say they’re scrambling to slow through a combination of prosecution and public awareness.
Beyond the run-of-the-mill plots, officials say, is a particularly concerning trend involving “money mules” — people who, unwittingly or not, use their own bank accounts to move money for criminals for purposes they think are legitimate or even noble.
The “mule” concept has attracted renewed attention with this month’s release of Clint Eastwood’s “The Mule,” a real-life tale of an elderly horticulturist who smuggled cocaine for a Mexican cartel. But the modern-day mules of most concern to the FBI are people who get themselves entangled in complicated, international money laundering schemes that cause huge economic losses and show no signs of stopping.
“They trial and error this stuff and they see what works and they see what doesn’t,” FBI supervisory special agent James Abbott said in an interview. “It’s a much higher success rate when you have a lot of money using somebody else’s account going through there instead of trying to cross the border with a physical transportation of cash.”
The FBI and international law enforcement agencies have stepped up efforts against the fraud and say they’re building bigger cases than before. Europol said this month it had identified 1,504 money mules, arresting 168, in a continent-wide bust. The FBI in June announced the arrests of 74 people, including 29 in Nigeria, for schemes targeting businesses and the elderly, and has launched a publicity campaign called “Don’t Be a Mule.”
The money mule cases are an offshoot of more generic frauds encountered by the FBI, including schemes that dupe people into thinking they’ve won the lottery and can claim their prizes by wiring an advance payment, or that trick the unsuspecting into believing a relative has been arrested and needs urgent bail money or that a supposed paramour they’ve met online requires cash. In cases like the Connecticut one, fraudsters assume identities of executives and scam employees into wiring cash.
That’s what happened in 2016 at Beacon Systems, a Texas company where a new employee received emails from someone she thought was the chief executive officer instructing her to transfer nearly $100,000 for a vendor-related payment.
Several weeks later, Kerry Williams, the CEO whose identity was impersonated, was on her way to the airport when the FBI contacted her and explained how the company had been victimized as part of a much broader swindle. A dual Nigerian-U.S. citizen was ultimately sentenced to four years in prison in connection with the scheme.
“It makes you kind of paranoid,” Williams said, describing how the experience also made the SAP consulting firm more vigilant. “Even to this day, we’re overly cautious about everything. I think you kind of go to that extreme.”
As for money mules, they’re persuaded, sometimes with the incentive of keeping a cut of the funds, into allowing money transfers into their own bank accounts at the direction of a fraudster they may mistake for an online friend or romantic partner, a military officer overseas or an employer. They’re then instructed to transfer those funds elsewhere, into accounts controlled by criminals.
In one example, the FBI says, a fraudster posing as an Army captain stationed overseas recruited a man he met online to be a money mule, saying he was making arrangements to travel home and needed the man’s help receiving and sending some funds. The FBI says $10,000 was wired into the man’s account. He was then instructed to withdraw it in small increments and send it to a woman in Texas.
The mules are sometimes witting conspirators. Other times, they’re elderly, lonely or just confused. The ones the FBI concludes are merely unwitting are given stern warnings but generally avoid prosecution.
“When we approach them and talk to them and explain to them what they’ve been doing, a lot of times, the horror is there, said Steven D’Antuono, an FBI section chief specializing in financial crimes. “It’s all walks of life, all educational levels. Anyone can fall victim to this.”
In the Connecticut case, the executive recounted those horrors in a letter to the judge before the sentencing of one of the defendants earlier this year.
The executive, whose name and company are redacted in the letter, described feeling initially apprehensive about the money transfer instructions and advising the company owner that it was a “lot of money for supplies.”
That night, he described the interactions to his wife, who asked if he was really certain the emails were legitimate. He suddenly wasn’t so sure, realizing for the first time he may have been duped.
“Because of crimes like these,” he wrote, “our society is losing much of the trust and openness that we once experienced.”
Strength in US growth at end of year likely to fade in 2019
By MARTIN CRUTSINGER
AP Economics Writer
Saturday, December 22
WASHINGTON (AP) — The U.S. economy has turned in a stellar performance this year. But mounting problems, from trade tensions to jittery financial markets and political gridlock in Washington, are expected to sharply slow growth in 2019.
The Commerce Department estimated Friday that the economy, as measured by the gross domestic product, grew at a brisk 3.4 percent annual percent rate in the July-September quarter. That was barely down from an estimate of 3.5 percent that the government made a month ago. That performance followed a sizzling 4.2 percent annual growth rate in the April-June quarter.
And analysts have said they think growth has remained solid in the current October-December quarter, with many forecasting annual growth of around 2.5 percent to 2.8 percent.
That would put the economy on track to record growth for all of 2018 of around 3 percent. It would be the best performance since 2005 and well above the tepid annual growth rates of roughly 2 percent that have prevailed since the recession officially ended in 2009.
President Donald Trump has often cited the upturn in growth this year as evidence that his economic program is succeeding. Economists agree that the $1.5 trillion tax cut Congress passed a year ago, along with a boost in defense and domestic spending approved by Congress in February, helped fuel growth this year.
But an array of risks lie ahead. They range from a slowing global economy, disruptions caused by the tit-for-tat trade war between the United States and China, higher borrowing costs for consumers and businesses as the Federal Reserve raises interest rates to control inflation and the potential shock to business and consumer confidence shaken from steep declines in stock prices.
Adding to those problems was a new element of uncertainty. A fight between Trump and Democrats in Congress over providing money for Trump’s proposed wall along the U.S.-Mexico border appeared to be a harbinger of battles ahead as Democrats take control of the House in January.
“We have a dysfunctional government in Washington, and that is just adding to all the uncertainty about the economy,” said Sung Won Sohn, chief economist at SS Economics. “The political fights are coming on top of uncertainty over how the trade fight with China will get resolved and where the Fed goes next with monetary policy.”
The Fed raised its key policy rate on Wednesday for the fourth time this year but reduced its estimate of the number of rate hikes for 2019 from three to two. Still, the Fed’s actions and a news conference by Chairman Jerome Powell failed to ease fears on Wall Street that the central bank may overdo its rate tightening and end up pushing the economy into a recession.
Stocks plunged this week, extending a slide in which the major U.S. indexes have shed more than 11 percent in December.
John Williams, the president of the Fed’s New York regional bank, sought to ease those concerns Friday. Williams noted that the Fed had changed the wording in its policy statement this week to say it “judges” that “some” further rate hikes will be needed, instead of saying that it “expects” further hikes. Williams said this was an effort to underscore that the Fed will be watching to see how the economy performs before deciding to boost rates next year.
Sohn said he expects growth to slow to around 2.3 percent next year.
“I don’t expect we will have a recession, but there will be a significant slowdown,” he said.
Mark Zandi, chief economist at Moody’s Analytics, said he expects growth to slow only slightly to 2.7 percent in 2019. But then he foresees a much sharper slowdown to around 0.9 percent growth in 2020.
“I think the economy will come to a virtual standstill by the spring of 2020,” Zandi said. “The government stimulus in the form of tax cuts and extra spending will have faded by then, and the economy will be struggling with higher interest rates.”
The Trump administration foresees a rather sunnier economic future. It projects that after reaching 3 percent growth this year, the economy will achieve sustained annual growth rates of around 3 percent over the next decade.
Treasury Secretary Steven Mnuchin called the market’s sell-off on Wednesday after the Fed’s rate hike “completely overblown.” He noted that the U.S. economy was still growing “significantly higher” than in Europe and other parts of the world.
In a statement Friday noting the one-year anniversary of Congress passing the tax cut, Mnuchin said, “Tax cuts and regulatory relief actions by the Trump administration have led to more investment in America, strong economic growth, higher wages and more Americans going back to work.”
Deaths of 2 children raise doubts about US border agency
By NOMAAN MERCHANT
Thursday, December 27
HOUSTON (AP) — The deaths of two migrant children in just over two weeks raised strong new doubts Wednesday about the ability of U.S. border authorities to care for the thousands of minors arriving as part of a surge of families trying to enter the country.
An 8-year-old boy identified by Guatemalan officials as Felipe Gomez Alonzo died in U.S. custody at a New Mexico hospital on Christmas Eve after suffering a cough, vomiting and fever, authorities said. The cause is under investigation, as is the death Dec. 8 of another Guatemalan child, 7-year-old Jakelin Caal.
“There is a real failure here that we all need to reckon with,” said incoming Rep. Veronica Escobar, a Democrat elected last month to represent El Paso in Congress. “We need to know how many other Jakelins and Felipes there have been.”
The U.S. government’s system for detaining migrants crossing the border is severely overtaxed. Authorities would not say how many children U.S. Customs and Border Protection is now holding. But the country is seeing a sharp rise in families with children.
In the wake of the two deaths, Homeland Security Secretary Kirstjen Nielsen asked the Coast Guard to study CBP’s medical programs and announced that all children who enter the agency’s custody will be given “more thorough” assessments.
Also, border authorities said that they conducted health checks in reaction to Felipe’s death on nearly all children in their custody. They did not disclose the results.
Nielsen blamed “a system that prevents parents who bring their children on a dangerous illegal journey from facing consequences for their actions.” The Trump administration contends it must detain more people to discourage other Central American families from trying to enter the country.
Felipe had been detained by U.S. border authorities for a week and moved between facilities with his father, officials said. The last place the boy was held — after the first of two visits to the hospital on the day he died — was a highway checkpoint in New Mexico.
Felipe’s father, Agustin Gomez, did not see any signs of illness from his son until Monday, according to Guatemalan consul Oscar Padilla, who spoke to Gomez on Wednesday. Felipe and his father had left Guatemala on Dec. 14 and were detained at the U.S-Mexico border four days later, Padilla told The Associated Press.
By its own regulations, CBP is supposed to detain people for no more than 72 hours before turning them over to other government agencies responsible for long-term detention. CBP facilities are typically spartan, with food, water and blankets but often no medical professionals, teachers or some of the other resources longer-term detention centers offer.
Similarly, Jakelin was first held with her father at a small base in rural New Mexico that did not have running water, according to Democrats who visited it after the girl’s death.
Rep. Henry Cuellar, a Texas Democrat who sits on a key subcommittee overseeing border funding, said he has pushed to fund more alternatives to detention such as ankle monitors, which he said could have been issued to Felipe’s father.
He said the Trump administration has prioritized the president’s border wall — the subject of the partial government shutdown since last week — over investing in CBP checkpoints that have long needed attention.
“They’re not set up to hold people for a long time,” Cuellar said. “There’s so much money that the wall sucks up that it’s hard to address some of the other issues. I wish the administration would understand that.”
CBP said it is reviewing all available options to relieve overcrowding in the El Paso sector, where Felipe and his father were apprehended. The agency also said it has reached out to other government agencies for “surge medical assistance.”
CBP Commissioner Kevin McAleenan said in the agency’s defense that CBP has more than 1,500 emergency medical technicians on staff and that officers are taking dozens of sick children to hospitals every day.
“This is an extraordinarily rare occurrence,” McAleenan told “CBS This Morning” of the two child deaths. “It’s been more than a decade since we’ve had a child pass away anywhere in a CBP process, so this is just devastating for us.”
It’s not uncommon for families in El Paso these days to spend more than a week in holding cells just as Felipe and his father did, said Ruben Garcia, director of El Paso’s Annunciation House shelter.
Those problems predate the Trump administration. During a 2014 surge at the border, some families were put in holding cells for up to 20 days before being released, Garcia said.
Homeland Security’s inspector general examined nine CBP holding facilities earlier this year. In a September report, the inspector general said that the facilities complied with CBP standards and that people had access to food and water, toilets and sinks, and hygiene items — with “the exception of inconsistent cleanliness of the hold rooms.”
Just three of the nine facilities had “trained medical staff to conduct medical screening and provide basic medical care,” the report said. And showers were available for unaccompanied children at only four facilities.
Felipe and his father were taken to two of the facilities the inspector general examined: the processing center at the Paso del Norte port of entry, then the El Paso Border Patrol station.
But just after 1 a.m. Sunday, the two were transferred 90 miles (145 kilometers) to the Border Patrol station at Alamogordo, New Mexico. CBP said it moved them “because of capacity levels” in El Paso. The next day, a border agent noticed Felipe was coughing and had “glossy eyes,” and sent him to the hospital, the CBP said.
“I can’t think of any logical reason that would happen, for the most vulnerable of children to be sent to a remote area,” Escobar said.
According to CBP statistics, border agents detained 5,283 children unaccompanied by a parent in November alone. Agents last month also apprehended 25,172 “family units,” or parents and children together. Both figures are highs for this year.
Children who arrive unaccompanied by a parent are supposed to go to longer-term facilities operated by the U.S. Department of Health and Human Services. But HHS’ system is also strained. The Associated Press reported this month that 14,300 children were being detained by HHS, most in facilities with more than 100 kids.
Associated Press writers Mary Hudetz in Albuquerque, New Mexico; Sonia Perez D. in Guatemala City; and Mark Stevenson in Mexico City contributed to this report.
UAE reopens embassy in Syrian capital closed in 2011
By BASSEM MROUE and AYA BATRAWY
Thursday, December 27
BEIRUT (AP) — The United Arab Emirates reopened its embassy in Syria’s capital on Thursday for the first time in seven years, a reflection of improved relations between President Bashar Assad and some of his Arab foes as the war winds down.
On Thursday afternoon, UAE’s charge d’affaires Abdul-Hakim Naimi visited the embassy and witnessed his country’s flag being raised again on the compound in central Damascus.
The move provides a major boost to Assad, whose forces have won a series of military victories in recent years with the help of Russia and Iran. Sudan’s President Omar Bashir visited Damascus earlier this month, becoming the first Arab head of state to visit Syria since the start of the war.
UAE’s Foreign Ministry said in a statement that “the step confirms that the UAE government is keen to restore relations between the two brotherly countries back to normal.” It added that the move is “to activate the Arab role in supporting Syria’s independence, sovereignty, unity and safety and prevent the dangers of regional intervention in Syria’s Arab affairs.”
“The opening of our embassy is a first step for the return of other Arab embassies,” Naimi told reporters outside the compound.
The United Arab Emirates was a supporter of the Syrian opposition, which is now largely confined to the northern Idlib province after losing its strongholds elsewhere. Some opposition fighters have joined Turkey for an expected assault on Kurdish forces in northeastern Syria. The UAE and other Gulf Arab supporters of the Syrian opposition view Turkey with suspicion because of its embrace of regional Islamists.
In October, Assad told a little-known Kuwaiti newspaper that Syria had reached a “major understanding” with Arab states after years of hostility. He did not name the Arab countries in the interview, which was his first with a Gulf paper since the war erupted, but said Arab and Western delegations had begun visiting Syria to prepare for the reopening of diplomatic and other missions.
The interview came on the heels of a surprisingly warm meeting between the Syrian foreign minister and his Bahraini counterpart on the sidelines of the U.N. General Assembly in September. The meeting turned heads because it featured hugs between the two ministers.
The encounter raised questions about whether the Gulf countries, most of them sworn enemies of Assad ally Iran, are reconsidering their relations with Syria.
Anwar Gargash, who is No. 2 at UAE’s Foreign Ministry, tweeted that an Arab role in Syria is necessary now to face Iran and Turkey’s intervention. He added that UAE through its presence in Damascus is trying to activate the Arab role in what would “contribute to ending war and strengthening opportunities for peace and stability for the Syrian people.”
The UAE recalled its ambassador from Syria in 2011 after the start of the popular uprising against Assad. The Syrian Embassy in the UAE remained open. There are also direct flights on Syria’s national carrier to Dubai and between the port city of Latakia and the emirate of Sharjah.
Oman, with its policy of quiet diplomacy, is the only Gulf Arab country to have kept its embassy in Damascus open throughout the civil war. In March, Syrian Foreign Minister Walid al-Moallem visited Oman on a rare trip by a Syrian official to the Arabian Peninsula.
Syria was expelled from the 22-member Arab League in 2011. Arab countries have sanctioned Damascus and condemned its use of military force against the opposition.
Also on Thursday, pro-government news outlets in Syria reported the first flight in years between Damascus and Tunisia’s capital by Syria’s private Sham Wings.
Batrawy reported from Dubai, United Arab Emirates.