The global coronavirus (COVID-19) pandemic has created opportunities for fraudsters and unscrupulous criminals to take advantage of financially distraught people and vulnerable populations.
Hudson Intelligence recently concluded a financial fraud investigation of an investment offering in which victims were cold-called by purported securities brokers, who claimed to be selling stock in a biotechnology company at below-market prices, soon after the biotech firm announced clinical trials for a corona vaccine candidate. The victims were instructed to wire the funds to a “stock transfer agent” with an overseas bank account.
“Fortunately, in this case, our client had the foresight to request investigative due diligence to confirm the facts of the investment prospectus before transferring funds,” said John Powers, president of Hudson Intelligence.
“The stock transfer agent was fake,” said Powers. “We anticipate any funds wired to its offshore account would have resulted in a total loss, with low odds of future recovery due to the unfavorable foreign jurisdiction.”
Many investors and business owners impacted by recent events are seeking alternate funding sources during the pandemic. Fraudsters capitalize on this situation by soliciting victims and persuading them to commit funds quickly before an “opportunity” disappears. High-pressure tactics are employed to manipulate desperate decision-makers, and circumvent any attempts to conduct proper due diligence before the funds are transferred.
The findings of the recent investigation by Hudson Intelligence were reported to the Federal Bureau of Investigation and Internet Crime Complaint Center.
In a separate development, yesterday the U.S. Department of Justice announced its first enforcement action related to the pandemic, detailed in a civil complaint against as-yet-unidentified operators of the website CoronaVirusMedicalKit.com in the U.S. District Court for the Western District of Texas.
The CoronaVirusMedicalKit.com website advertised fake “vaccine kits” purportedly from the World Health Organization, and prompted visitors to enter their credit card information to pay a $4.95 shipping charge, according to the complaint and a supporting statement by FBI Supervisory Agent Jordan Loyd.
The Court granted the DOJ’s motion for a temporary restraining order, and instructed the domain registrar, NameCheap.com, to effectively disable the site by removing the name server from the domain registration record.
Court papers identify a second domain — securitycovid19info.com — also hosted by NameCheap.com, which similarly appears to be the focus of investigative interest by the DOJ.
In a memo to U.S. Attorneys, Attorney General William Barr highlighted the need for increased vigilance during the corona outbreak. “The pandemic is dangerous enough without wrongdoers seeking to profit from public panic and this sort of conduct cannot be tolerated,” he stated.
Contact an Investigator
If you have concerns about the legitimacy of an investment offer or business proposal, retaining a qualified investigative firm for pre-transactional due diligence can be a critical step to confirm key details, including the identities, background and track record of the parties involved. Investigation may also be appropriate if serious problems arise later in the investment cycle, such as difficulties or delays in withdrawing available funds.
Hudson Intelligence is a licensed private investigation agency specializing in financial fraud and asset searches in the U.S. and internationally. The firm assists investors, business owners, financial institutions and law firms by conducting international fraud examinations, identifying perpetrators, and tracing assets to facilitate financial recovery.
To discuss an investigation with a certified fraud examiner, please complete the form below or contact the offices of Hudson Intelligence at 800-580-8755.