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Cybercrooks step up targeted attacks by 50

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NEW YORK (3/9/10)--Cybercrooks or eCrime syndicates are expanding the base of the brands they exploit for online fraud far beyond major financial institutions and online merchants, said the Anti-Phishing Working Group (APWP) in its fourth quarter Phishing Activity Trends Report. Now they're targeting the big phish hoping to hook key individuals in corporations and institutions. The number of hijacked brands reached a record 356 in October, up nearly 4.4% from the previous record of 341 in August 2009, said APWG. "No brand is safe from the threat of spoofing for the purposes of online fraud," said APWG Secretary General Peter Cassidy. "Once, only the largest banks were targeted. Now, every kind of enterprise from banks and credit unions of all sizes to charities, to, in a recent case, a hardware manufacturer, are now seeing their brands exploited in all manner of fraud scheme," he added ( March 8) . The number of unique phish reports declined nearly 29% from 40,261 in August. However, the decline masks a trend that is of "grave concern" to APWG members: a substantial increase in phishing focused on high-value targets--such as personnel with treasury authority. The increase in spear-phishing and whale phishing, which target individuals inside of corporations or those who are of "high net worth," means phisher and malware attackers are trying to gain access to corporate online banking systems, corporate virtual private networks or VPNs, and other online resources, according to APWG. While some research indicates the volume of phishing e-mails is decreasing, it is important to note that these attacks are targeting more varied industries with the intent on generating greater financial success, says Cyveillance, a cyber intelligence company. While banks and credit unions continue to be the top targets of phishers, governments and the technology and energy industries are now seeing growing number of attacks, said the company. During the second half of 2009, Cyveillance found that first time phishing targets grew to 399 brands, nearly double the number during the first half of 2009 (Investment Weekly News March 13). More than 36,000 confirmed, unique attacks were noted per month in the same period, said Cyveillance. That means phishing attacks continued to reel in their victims--despite advances made in consumer education and added protections implemented by security departments within the targeted organizations.

Michigan regulator Ponzi scheme by CUSO broker

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LANSING, Mich. (3/9/10)--Michigan's Office of Financial and Insurance Regulation (OFIR) issued a cease-and-desist order against a broker who sold unregistered securities in a multi-million dollar Ponzi scheme while operating out of a credit union service organization in Ann Arbor. OFIR also has issued orders to revoke securities and insurance licenses of Mark Carpenter, who sold investment products through his company, TGBG Financial, while employed with CUSO Financial Services from June 2007 through October 2008. CUSO Financial maintained a securities branch office inside MidWest Financial CU. The credit union and CUSO Financial were not involved in the scheme. "This was a multi-headed Ponzi hydra," said OFIR Commissioner Ken Ross in a press release. "Bank records indicate that Carpenter got scammed and then set up his own scam. We found fraud within fraud involving working people who were robbed of their life savings. These were not high rollers," he added. OFIR said the investments totaled at least $5 million. It identified at least 12 investors who were MFCU members and 20 investors who were also CUSO Financial clients. An OFIR investigation found that in December 2007, Carpenter became a victim of a Ponzi scam involving bogus Arab crude oil bonds and operated by Michael Winans Jr. and his father, gospel singer Michael Winans Sr. of Detroit. Carpenter then sold interests in the phony crude oil bonds to his own clients, forming TGBG (for "To God Be Glory") to funnel funds into the Winans scam, said the OFIR. Carpenter also was involved with other frauds including an alleged gold mine developed by Ronald Brito and his company, GetMoni.Com, a Nevada-based corporation, and an Orlando, Fla. real estate development called the Blue Rose Orlando Project, OFIR said. The regulator said Carpenter transferred large sums to his personal bank accounts and used funds to invest in GetMoni, pay his personal and TGBG's expenses and pay interest or principal payments that were due to earlier investors in a classic Ponzi scheme style. The Winans, Brito and GetMoni.Com also have received cease-and-desist orders from the Michigan OFIR. Carpenter allegedly promised investors they would double their investment with 60 days (or 1,200% annually) and "guranteed" the returns. OFIR said it has accounted for $5 million that Carpenter and TGBG received in the schemes for investment. Roughly 47% was received by GetMoni, 18% by Carpenter and TGBG, 17% by Mike Winans and the Winans Foundation, and 4% by a friend, James Smith and his businesses. The remaining 14% was disbursed to investors as alleged interest payments, said OFIR. OFIR has handed the results of its investigation to law enforcement agencies. Violations of the Uniform Securities Act are subject to a criminal penalty of a maximum of $25,000 for each violation, or imprisonment of up to 10 years, or both.

NASCUS wants larger state role in corporate rules

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ARLINGTON, Va. (3/9/10)--The National Credit Union Administration (NCUA) will need to balance reconsideration of regulatory oversight of the corporate system with the ability of the system to recapitalize going forward, said the National Association of State Credit Union Supervisors (NASCUS), in a comment letter Friday about NCUA's proposed rule, Part 704, Corporate Credit Unions. NASCUS is also seeking enhanced joint federal and state oversight as well as state law preservation over certain areas of corporate regulation and governance, the letter said. During the rulemaking process, NASCUS state regulators worked with NCUA to provide the state regulatory system's perspective. NASCUS commended NCUA for moving forward toward a final rule and made these recommendations:
* Restore diversity to the corporate system by allowing state regulations to vary from NCUA's section 704; * Provide state regulators access to federal corporate credit union books and records; * Amend the proposed Prompt Corrective Action (PCA) provisions to mirror the natural person credit union PCA provisions regarding consultation and cooperation with state regulators; * Limit governance provisions to federal corporate credit unions; and * Promulgate the stress testing and asset liability management provisions as thresholds rather than inflexible limits.
NASCUS--as did the Credit Union National Association in its comment letter to NCUA--identified legacy assets as a critical area to consider. (See related story: "With tweaks, NCUA corporate plan protects system.") For NASCUS' full comment letter, use the link.

Fowler named South Carolina league presidentCEO

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COLUMBIA, S.C. (3/9/10)--The South Carolina Credit Union League board of directors has named Steve Fowler the new president/CEO of the South Carolina Credit Union League & Affiliates (SCCUL). Fowler has 38 years of experience in the state’s credit union movement. “This is a critical time in the credit union industry and the leadership role at the association has never been more important,” said league Chairman Scott Woods, who is president/CEO of South Carolina FCU in North Charleston. “We worked hard to align our strategy for strong advocacy at the association level with an individual who understands the needs of our member credit unions.” Fowler has been interim CEO since Jan. 1 and is a veteran to the credit union political scene, having served as the league executive vice president and principal lobbyist. In that position, Fowler already led SCCUL member services such as conferences and training, internal audit services and accounting services. His role includes management of the South Carolina Service Corp., which provides fee-based services to league-affiliated credit unions. Fowler joined SCCUL as an auditor in 1971. Since then, he has worked in member services and managed the league’s service corporation and corporate credit union--now merged with First Carolina Corporate CU in Greensboro--before moving into advocacy and association services.

Maryland lawmakers join Move Your Money groundswell

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ANNAPOLIS, Md. (3/9/10)--The Maryland General Assembly is considering legislation that would give credit unions and state-chartered banks an advantage when bidding to serve state agencies or local governments. The potential legislation comes in the wake of The Huffington Post’s recent Move Your Money campaign, which tells consumers to switch their deposits to credit unions or small banks from big banks that benefited from taxpayer bailouts and now are reluctant to lend ( March 7). “While you should switch banks only if it makes financial sense, the Move Your Money campaign does nudge us to review our relationship with banks,” wrote Eileen Ambrose, personal finance columnist for the newspaper. “That’s something all of us should do more regularly.” “Credit unions also are fans of the Move Your Money campaign, and some have started using the theme in their marketing, Mark Wolff, spokesman with the Credit Union National Association,” said in the article. The New York Times also noted consumer animosity toward big banks in an article titled “A Banking Battleground,” by Hannah Fairfield. “Tales of reckless lending and huge compensation for executives have led to major animosity toward major banks,” Fairfield wrote. “A ‘Move your Money’ groundswell was ignited in January by Arianna Huffington of The Huffington Post and Rob Johnson, director of the Economic Policy Initiative at the Roosevelt Institute. Their hope is to spur reform at megabanks by encouraging people to move their money to smaller community banks and credit unions.” To read the articles, use the links.

Good Samaritans hit by check scam

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SHEBOYGAN, Wis. (3/9/10)--Two Good Samaritans fell victim to a check scam outside of a Madison, Wis. credit union, according to local media reports. On two different occasions, a man approached a credit union member and asked for help in cashing a personal check. The man said he and his family were stranded in Madison on their way back from New Jersey. He needed to cash a check to get back home and didn’t have an account with the credit union or an ATM card. He said the credit union wouldn’t cash the check (The Sheboygan Press Feb. 28). The man suggested that he could write a personal check payable to the members, who could cash the checks and keep $10 for their trouble. Both members fell for the scam, and neither kept the $10. The checks were for $480 each. The scammer received $960 because the checks were from with an account closed because of nonsufficient funds, the newspaper said. Last month, Wisconsin Attorney General J.B. Van Hollen warned Wisconsin consumers to be on the lookout for fake check scams. Some scams affecting consumers include those that require individuals to pay taxes on contest winnings, or those that involve a person in a foreign country asking for help in transferring a large sum of money to the U.S. The victim is sent a check to initialize the transfer, but after the money is sent back, the individuals usually discover the check was forged. The victim loses money as a result.

Students get lesson in investment fraud

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TREVOSE, Pa. (3/9/10)--With little or no credit history, high school students are prime targets of identity theft scams, says TruMark Financial CU. To address the growing problem, the Trevose, Pa.--based credit union sponsored an investment fraud presentation to more than 400 seniors at Plymouth Whitemarsh High School, Plymouth Meeting, Pa. Doug Hassenbein, representative from the Pennsylvania Securities Commission, discussed investment scams, identity theft, and affinity fraud through social media and other online channels. As part of TruMark Financial's financial literacy program, credit union employees visit local high schools and discuss topics such as identity theft, budgeting, and the potential of credit card debt. The presentations provide third-party expertise and complement the existing personal finance curriculum. TruMark Financial has more than $1.2 billion in assets and 90,000 members.

CU System briefs (03/08/2010)

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* SAN ANTONIO (3/9/10)--Matt Bonner, forward/center for the San
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Antonio Spurs in the National Basketball Association, visited Lana Longworth’s class at Harmony Elementary School in East Central San Antonio to read a special book. The visit was a reward for the young winners of the grand prize in the High Five Readers Challenge, presented annually by San Antonio FCU (SACU) and other sponsors. The $2.8 billion-asset SACU is the “Official Credit Union of the San Antonio Spurs,” and has been involved with the High Five Readers Challenge for eight consecutive years. Bonner read Tacky and the Winter Games by Helen Lester, which coincided with the Winter Olympic Games held last month in Vancouver, British Columbia. The High Five Readers Challenge is extended to all Bexar County elementary schools each year. Its purpose is to help students in first through fifth grade to exercise their minds and imaginations by spending more of their free-time reading (Photo provided by San Antonio FCU) … * CLAYMONT, Del. (3/9/10)--Eagle One FCU gained 186 new members
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during a recent membership drive where individuals who signed up with the credit union received a $10 reward and were entered into a drawing to win a flat screen TV, according to the Delaware Credit Union League (Together March 1). Eagle One is based in Philadelphia but also serves members with a branch in Delaware. Names of members who signed up for any new e-services during the drive were placed into a drawing to win a $100 gas card. Winners were drawn on Dec. 31. Pictured are Alecia Grantham, grand prize winner, and Jose Rosario, credit union loan officer. (Photo provided by the Delaware Credit Union League) ...