Chris Hansen went undercover to investigate credit card fraud and identity theft, and the results were aired last night on Dateline NBC. The heart of the problem is people stealing credit card and banking information, selling it to people overseas, who eventually use the info illegally to buy merchandise such as electronics.

The story began in chat rooms, where people are actually brokering personal information. There are also certain “code words” that retailers can put on their websites, which let these thieves know that they accept stolen credit card numbers.

Information is usually obtained by a hacker who gets into the computer systems of large retailers, like TJMaxx. That company had the credit card information of 45 million customers stolen.

Hansen got a credit card issuer to issue valid credit card numbers to be used as part of the sting. Hansen then offered the “stolen” credit card numbers to online thieves, who used them to buy merchandise online. He tracked down the merchandise and started asking questions.

The number of people involved in this type of theft is staggering. Some are finding easy marks in the U.S. who will receive the goods bought with the stolen credit cards, and then ship them overseas. (Many retailers don’t ship overseas, so a U.S. connection is needed to facilitate the theft.)

Consumers are encouraged to take a look at this story. They need to know how easy it is for their banking information to be compromised. Cleaning up from identity theft and credit card fraud can be long and painful. The first step toward stopping this crime is awareness.

Interesting side note: If someone uses your credit card number illegally, that is credit card theft and not identity theft. Identity theft only occurs when someone uses your identity (poses as you) to illegally obtain a loan or credit card in your name. Consumers often confuse the two.

Whistleblower Law Blog has a post about OxyContin abuse and the Purdue Pharma sentencing. Executives of Purdue Pharma were sentenced to probation and community service in drug treatment programs for lying about the risk of addiction and abuse with OxyContin.

The blog also points us to a site run by Ed Bisch, a father who lost his 18-year-old son to death by overdose on OxyContin in 2001. Bisch’s site, www.Oxyabusekills.com, was started the day after his son died, and its goal is to let people know how addictive OxyContin is and how easy it is to overdose.

OxyContin is a strong and long-acting narcotic that was introduced to treat severe cancer pain. Yet shortly after it was approved by the FDA, critics started complaining about how strongly addicted users can become. Critics allege that Purdue was marketing this drug to non-expert doctors (ones who didn’t know how to prescribe it properly) and that they didn’t tell the doctors about the powerful high produced by the drug or the extremely addictive properties.

Executives eventually pleaded guilty to federal charges related to deceptive marketing, and the company paid a $634 million fine.

Charles H. Green presents Credentials, Elitism and Web 2.0 posted at Trust Matters, saying, “How much does someone having credentials protect you from false information?” He also presents Linking Integrity and Success – CFOs and UBS , asking “s integrity integral to success? Or is that just something people say?”

Steven Silvers presents Despite the PR pundits, there’s not much to learn from the Whole Foods fiasco, commenting that “PR platitudes about reputation and ethics are mostly irrelevant to the melt-down caused by Whole Foods CEO John Mackey anonymously pumping his stock and flaming competitors on Internet investor boards. ”

Leon Gettler presents Burned up cooking the books posted at Sox First, saying, “Crime doesn’t pay. Well, for some. Contrary to claims that managers lie, cheat, cook the books and get away with it, a new study shows that individual perpetrators suffer huge consequences. Not all, but a lot of them.” He also presents Conrad Black’s bail and the hunt for his cash, and comments, “Fraudster Conrad Black has been let out on bail but confined to the US. Now his enemies have lodged lawsuits seeking more than $1 billion in damages. But chances are they won’t see the money, he has hidden it away.”

The ever-entertaining Wenchypoo presents Invasion of the Pod People, Round 2. This is a brilliant, brilliant analysis of all the stupid things we talk about and do because it makes people feel good… things like “Title 9″ for sports, protection of wetlands, universal health care, and global warming. I can only hope the lefties could read and understand!

And I’m still writing about Usana Health Sciences, the multi-level marketing company (read: pyramid scheme) that can’t seem to stay out of trouble or be truthful about the business model and financial statements. Last week they announced that their auditors, Grant Thornton, quit… and we’re supposed to believe this is actually a good thing!

Well, it’s official. I now delete more submissions than I actually publish. For the life of me, I can’t understand what starting a home based business, providing good customer service, selecting a CRM system, and such have to do with fraud and scams.

If you have a blog post related to scams, schemes, and fraud, please submit it for the next Carnival of Fraud.

SUPREME COURT OF WISCONSIN
CASE NO.: 2006AP578-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings Against Hazel J. Washington, Attorney at Law:

Office of Lawyer Regulation, Complainant, v. Hazel J. Washington, Respondent.
OPINION FILED: May 30, 2007

David R. Schanker
Clerk of Supreme Court
ATTORNEY disciplinary proceeding. Attorney’s license suspended.

SUPREME COURT OF WISCONSIN – OFFICE OF LAWYER REGULATION
Public Reprimand With Consent 2007-OLR-10
Hazel J. Washington, Attorney at Law

Attorney Hazel J. Washington (“Washington”), a Wisconsin bar member since 1988, practiced law in Milwaukee, Wisconsin. Washington’s law license was suspended at the time of the imposition of this reprimand. On November 3, 2003, Glenda Bailey retained Atty. Hazel J. Washington to represent Terranze C. Sharp (“Sharp”) who was sentenced on August 13, 1991, to life imprisonment for first degree intentional homicide. The initial retainer was for the purpose of reviewing trial transcripts and post-conviction matters in Sharp’s criminal case filed in Milwaukee County, State of Wisconsin vs. Terranze Curtis Sharp, Milwaukee County Case Number 1990CF904071.

David Welch was the CFO of Cardinal Bancshares, and the first person to file a claim for whistleblower protection under Sarbanes-Oxley Section 806.

The Department of Labor ruled in his favor in regards to reinstatement to his job. But Cardinal refused to reinstate him and appealed to the highest level, and Welch’s case was ruled to have no merit.

Welch says that he raised concerns about the company’s accounting policies and internal controls, and then refused to certify Cardinal’s financial results. He says he was fired for this, but the bank says that he was fired instead because he refused to meet with an independent auditor and company lawyer without his own lawyer present.

The appeals board ruled that as the head of finance at Cardinal and as a CPA, Welch “could not have reasonably believed that Cardinal misstated its financial condition,” and therefore didn’t deserve protection under Sarbanes-Oxley.

Welch now intends to file his case in federal court.

A study of almost 1,000 whistleblower complaints filed under Sarbanes-Oxley has found that none has resulted in a “win” for the whistleblower. Section 806 of the Sarbanes-Oxley Act is meant to give protection to employees of public companies who report wrongdoing. It is administered by the Department of Labor’s Occupational Safety and Health Administration (OSHA).

Since its inception, 947 whistleblower cases have been filed. 665 cases were dismissed as having no merit, while 126 were withdrawn by the complainant. 138 were settled before the DOL ruled. Only 17 of the cases were deemed to be with merit by the DOL.

Of the cases that proceeded, only 6 cases survived the DOL’s first level of the appeal process, and none have been before the DOL’s Administrative Review Board, the highest appeal level.

Wow. This will surely make would-be whistleblowers think before they complain about wrongdoing at companies. Why risk one’s job and livelihood, when it is likely that the case will be dismissed or lost?

I had a winner of an idea for a book on fraud, and I had a willing publisher in John Wiley & Sons. I expected the next step of the process to be putting together a book proposal.

My friend Susan Marshall of Executive Advisor had told me how challenging that part can be. Susan has done several book proposals and has published a few books, and she emphasized how important the book proposal is. You can have a great idea with a bountiful market for the book, but a bad proposal can put a stop to your publishing dreams.

Imagine my surprise when my editor said that I didn’t have to do a proposal. My editor was committed to the project, and would create an “internal proposal” that needed approval from the marketing department and the executives.

The editor was going to do the hard work, and all I had to do was provide key pieces of information.

I developed the outline for the book further, putting in more details about my approach to the various components of fraud detection, investigation, and prevention.

More importantly, I had to detail my platform for Wiley. First I detailed important national clients I’ve worked with, as these may be potential purchasers of the book. Then I detailed my speaking engagements over the last year, as well as those booked for the upcoming year. Traveling the country training and presenting on fraud investigation and prevention as I have is very attractive to a publisher. It demonstrates more potential buyers for the book, and identifies opportunities to promote the book in the future.

I also outlined for Wiley all the publications I’ve written for and the increase in my online presence. I’ve written lots of articles that have been published around the country, and this has played a part in the significant increase in traffic to my website and blog.

Finally, I noted two highly visible and well-respected individuals who would each be willing to write a forward for the book. I also mentioned some promotional activities that I believe will positively impact book sales.

I wrapped it all up with a bow and sent it off. I waited my editor to put together the actual proposal and to receive word back…

Next: Negotiating a contract with Wiley.

I held out hope that Ashanti Hamilton was going to be one of the good guys. A guy who represented his constituents with integrity, and demanded the same of his colleagues.

I was wrong.

Here are his shameful words at a rally to support habitual criminal, Michael McGee Jr., as reported by 620 WTMJ Radio:

…or so Usana Health Sciences would have us believe. But don’t listen to them. No, no. Listen to a third party. An unbiased person who is quite knowledgeable about the reasons why auditors quit. Or not.

It took me a moment to pick myself up off the floor after rolling around and laughing, thanks to Scott Van Winkle of Canaccord Adams.

We all understand that investment analysts aren’t really independent. I mean, we get it that Canaccord Adams earns money from Usana and therefore has a vested interest in the company staying afloat.

But doesn’t Van Winkle have at least some common sense and self-respect? Do you think he realized exactly how silly he made himself look? You can’t make this stuff up. The guy really said this, as quoted by the Associated Press: