$50M Dollar Fake Bank Website Scam & How the FBI Shut Them Down.
$50M Dollar Fake Bank Website Scam & How the FBI Shut Them Down. A California man admitted conspiring to commit wire and securities fraud scam in connection with his role in a $50 million internet enabled fraud scam scheme.
About the fake bank website scam
Allen Giltman, 56, of Irvine, California, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud.
From 2012 to October 2020, Giltman and others engaged in an internet based financial fraud scheme, which generally involved the creation of fraudulent websites to solicit funds from investors.
At times, the fraudulent websites were designed to closely resemble websites being operated by actual, well known, and publicly reputable financial institutions. Other times, the fraudulent websites were designed to resemble legitimate seeming financial institutions that did not exist.
Victims of the fraud scheme typically discovered the fraudulent websites via internet searches. The fraudulent websites advertised various types of investment opportunities, most prominently the purchase of certificates of deposit, or CDs. The fraudulent websites advertised higher than average rates of return on the CDs to lure potential victims.
The fake bank websites
The fraudulent websites used a variety of means to appear legitimate and to gain and maintain the trust of prospective investors, including:
(a) displaying the actual names and logos of real financial institutions.
(b) purporting that the institutions were members of or regulated by the Federal Deposit Insurance Corporation (FDIC), Financial Industry Regulatory Authority (FINRA), the Securities Investor Protection Corporation, or New York Stock Exchange.
(c) claiming that deposits made to the institutions associated with the fraudulent websites were FDIC-insured.
(d) using FINRA or FDIC member identification numbers issued to real financial institutions and real FINRA broker-dealers.
After discovering one of the fraudulent websites, victims would contact an individual identified in the information as Giltman by telephone or email as directed on the sites. During his communications with victims, Giltman impersonated real FINRA broker dealers by using their names and FINRA Central Registration Depository numbers. He would then provide the victims with applications and wiring instructions for the purchase of a CD.
Money movements from the fake bank website scam
The funds wired by the victims would then be moved to various domestic and international bank accounts, including accounts in Russia, the Republic of Georgia, Hong Kong, and Turkey.
None of the victims received a CD after wiring the funds.
To date, law enforcement has identified at least 150 fraudulent websites created as part of the scheme. At least 70 victims of the fraud scheme nationwide, including in New Jersey, collectively transmitted approximately $50 million that they believed to be investments.
The penalty for fake bank website scam
The wire fraud conspiracy charge carries a maximum penalty of 20 years and a $250,000 fine, or twice the gross amount of gain or loss from the offense, whichever is greatest. The securities fraud charge carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross amount of gain or loss from the offense, whichever is greatest.