Brian Ebert Cancels a Counterfeit Credit Card Racket

Brian Ebert

Beau Friedlander:

Adam.

Travis Taylor:

Beau.

Beau Friedlander:

Travis?

Travis Taylor:

Beau, I know you’re an animal lover. Specifically, a dog lover. And I was wondering if you’d heard about the puppy scam?

Beau Friedlander:

I shudder to think. No, I have not. What is it?

Travis Taylor:

It’s something where during COVID, during the first part of the COVID lockdown, everyone was adopting dogs. I know at least five or six people who just got a dog just because they’re trapped inside, nothing else to do. So apparently, there are these scam rings where they will get the cutest little picture of a puppy with sad Basset Hound eyes and scam people into adopting them and then just pretty much running off with their money.

Speaker 5:

It’s a multimillion dollar crime that leaves heartbreak in its wake and those who track it say it is run by organized gangs.

Speaker 6:

We’re talking about puppy scams. Tonight, consumer investigator, Stacy [crosstalk 00:00:48]-

Beau Friedlander:

It’s okay, Adam. You’re a good boy. This is … First thing I thought was Toby the Rabbit. Do you remember Toby the Rabbit, anybody?

Travis Taylor:

No.

Beau Friedlander:

Adam?

Adam Levin:

I remember Harvey the Invisible Rabbit.

Beau Friedlander:

No, Harvey’s different. Toby was a cute little bunny and there was a photograph of him on a frying pan. And the caption said, “If we don’t make $10,000 by the end of the day, we’re going to eat Toby.” And people sent the money. You don’t remember this, Travis?

Travis Taylor:

I think you talked about it in another episode but I don’t remember the actual bunny.

Speaker 5:

An empty crate, unfilled food bowls, and puppy toys waiting to be played with. All of it purchased in anticipation of Millie, a Havenese puppy who warmed the hearts of the Mac family.

Beau Friedlander:

So no, I don’t know about this but that is exactly the sort of thing that makes me want to get a really cool suit and swear more than I even already do and become the second coming of Deadpool and get the bad guys.

Travis Taylor:

Well if it’s any consolation, it does sound like Google is suing the main guy behind it.

Beau Friedlander:

How does it even work? Was there just one dude who was pinkie to the lips stealing puppy money?

Travis Taylor:

Yeah, he was apparently soliciting, specifically Basset Hounds, and the way to pay him was, wait for it, gift cards.

Beau Friedlander:

Oh, shut up.

Travis Taylor:

He wanted $700 worth of gift cards. So you would think that would be the first red flag there because I have never once seen anyone buy a puppy with Apple gift cards but there you have it.

Adam Levin:

And if we’re talking about Basset Hounds, I’m all ears.

Beau Friedlander:

And Adam actually does … I didn’t know this was wrong but Adam pays me in gift cards.

Adam Levin:

Yes, I certainly do, don’t I?

Beau Friedlander:

Yes, yes. So-

Adam Levin:

No wonder you don’t get a W-2 or a 10-99.

Beau Friedlander:

But so [crosstalk 00:02:49]. But it seems kind of nuts to me. You get somebody’s … Adam-

Adam Levin:

Beau.

Beau Friedlander:

I have the water skiing boat … I’m sure that’s not what you’d call it. You can tell that I don’t water ski, that you’ve been looking for just like old Noah, our previous guest. And you can have it. You just need to give me $20,000 in Amazon gift cards. I mean, really?

Travis Taylor:

Well one of the main things too is that they … This one scammer in particular, went after elderly people who were sequestered during COVID.

Beau Friedlander:

That’s bad, oh [crosstalk 00:03:20]. Counterfeit dogs. What will they think of next?

Adam Levin:

Counterfeit credit cards.

Beau Friedlander:

Which brings us to our episode today. Although, they weren’t counterfeit dogs, were they?

Adam Levin:

But you have to love the picture of a duck with cardboard puppy ears taped to its head.

Beau Friedlander:

Oh, that was you who sent me that. Gotcha.

Beau Friedlander:

Welcome to What The Hack with Adam Levin. A show about hackers, scammers, and the people they go after. I’m Beau, cyber-skimmer.

Adam Levin:

I’m Adam AKA Kenneth, Beau’s bear.

Beau Friedlander:

How did you know what I named my bear.

Adam Levin:

Because you told me what you named your bear.

Beau Friedlander:

Oh, Kenny.

Travis Taylor:

And I’m Travis, cyber-donkey.

Beau Friedlander:

Donkey.

Adam Levin:

Donkey. And today, we’re talking with a former Secret Service agent who took down a transnational counterfeit credit card ring. The man, the myth, the legend, Brian Ebert.

Brian Ebert:

Hey, what’s going on, guys?

Beau Friedlander:

It is good to see you and it’s nice that we have someone who looks respectable on this show. Welcome, it’s so great to see you.

Brian Ebert:

Fantastic to be here.

Adam Levin:

I missed you. Folks in our audience know, Brian and I had the opportunity to work together for a couple of years. I have nothing but admiration for Brian. Brian is one of those guys that when you think about superstars, Brian is a superstar.

Beau Friedlander:

Okay, now hold it, Adam.

Adam Levin:

Yeah.

Beau Friedlander:

I had no idea that you were in the Secret Service?

Adam Levin:

You didn’t know that? You understand that’s why it’s called Secret.

Beau Friedlander:

I think Travis probably has some questions here because I don’t buy it. I don’t think you were in the Secret Service.

Travis Taylor:

Yeah, I’d have to say I’m skeptical on that note. But so Brian, pleasure to meet you. What did you do for the Secret Service?

Brian Ebert:

So I was with the Secret Service for 30 years, hard to believe. I retired last year. The role I was retired from, I was the Chief of Staff of the agency. And a couple of roles I had before that, I was the Deputy Assistant Director for Protective Operations. I happened to lead our Global Protection Mission. And prior to that, I was the Special Agent in charge of our Washington Field Office which covers Washington, DC and parts of Northern Virginia and Southern Maryland.

Travis Taylor:

Wow. How did you actually land that gig or those gigs?

Brian Ebert:

Just spent a career in the Secret Service. And we have two missions to the Secret Service. To investigate financial crimes and to protect our elected leaders. So it’s surprising how often the two different parts of our mission mutually support each other. So throughout our careers, we bounce around on different assignments on both sides of that mission area. You became a better and better investigator and stronger and stronger at working protective operations. So I just had some great opportunities to work some really fun, diverse assignments around the world. It was a fantastic career.

Adam Levin:

As the head of protective details, you had to have protected some really cool people, right?

Brian Ebert:

Yes. Unfortunately, I can’t go into a lot of details but I can certainly talk about who I was involved in protecting. So we protect the president and vice-president and their families. Everybody knows that. During campaign season, we protect the candidates when they reach a certain threshold as decided by … A panel up in Congress decides. So we protect most of the major candidates as well. And then what a lot of people … We protect the former presidents but what a lot of people don’t know is we protect all the foreign visiting heads of state. So the presidents, prime ministers, kings, queens, that when they’re on US soil, Secret Service is responsible for protecting them as well.

Adam Levin:

All right. So without revealing too much information, who was, in your estimation, in all the years that you were involved doing your work with the Secret Service, who was the most interesting foreign dignitary that you were in charge of the protective detail for?

Brian Ebert:

Wow. There was so many and I did a few years up in our New York office and a lot of these world leaders would come in for the United Nations so we had a lot of them. You know, the President of Tuvalu, which is a small island-

Beau Friedlander:

What?

Brian Ebert:

I know, I know. A small island in the Pacific. And smaller than Manhattan with a much smaller population. That was really … That was really interesting because they adhered to a lot of the customs and cultures from their small island country and they hadn’t spent a lot of time in the United States or in my big cities. So I was a young agent when I was on that detail back when I was assigned to our Los Angeles Field Office. And we actually went to Disneyland in California and took the leader there with his small little entourage, his Chief of Staff was his brother-in-law. And we went and did Disneyland and did all the rides. And Disneyland itself had a bigger population than his country and was not physically much smaller than his country.

Brian Ebert:

So that was probably the most interesting experience I had because at the same time, as small as the country is and as differently cultural, he’s one of the 160-some world leaders that are represented at the United Nations. So it was interesting to spend time with him.

Beau Friedlander:

And I have to ask. So did you take him on the It’s a Small World ride?

Brian Ebert:

We did the It’s a Small World ride and we did a number of rides. And I got to know him a little bit. And I pointed out Space Mountain and I said, “So are you interested in doing Space Mountain?” The other agents on this protective assignment were senior agents that have been around a long time and I was the new kid. And so I was … And I was a little bit closer to spending time in amusement parks than these senior agents were. So I was given the task of communicating with him about what he wanted to do. And I have to say, I pushed him towards-

Adam Levin:

To Space Mountain.

Brian Ebert:

… Space Mountain and he was very concerned about going on it at first, that it was a scary rollercoaster. But I explained that there was a planet that looked like a giant chocolate chip cookie. The president really liked his chocolate chip cookies. And so he eventually agreed to go on the rollercoaster. His brother-in-law, the Chief of Staff, was not at all happy about it but he turned a little bit green on it. But the men and I rode in the front seat and I got him to put his arms up and that was [crosstalk 00:11:01]-

Beau Friedlander:

American tradition.

Brian Ebert:

[crosstalk 00:11:03]-

Adam Levin:

Did you turn a little green in the front seat? Okay.

Travis Taylor:

Did he have Mickey ears is the question I had.

Brian Ebert:

He did not. The only time I saw him, he’s a very humble man, a very nice man, the only time I saw him assert his privilege a little bit is he turned to the VIP host that was taking us through after the rollercoaster came back, he wasn’t quick to get out of the car when it came back and the guardrail came up. And he said, “We will ride your Space Mountain again.” And so we went and did a second round of [crosstalk 00:11:39]-

Adam Levin:

I love it.

Adam Levin:

What was your most Jason Bourne moment?

Beau Friedlander:

I need to know this too. You’re a Secret Service guy. You must be able to do back flips while you’re shooting people upside down, right?

Brian Ebert:

Well you know, the younger agents are up and evolved with more of the acrobatics. I mean the job is really … It’s a very, very interesting job but it’s all about relationships with other law enforcement partners and with the intelligence community and international partners. And building those relationships and getting everybody on the same page is what it’s all about. Certainly, the most exciting moments I had were probably more in our investigative mission back … And I came up on the West coast so working fraud cases and working informants and involved in undercover deals. And doing surveillances on the bad guys and staking them out. And when you get the search warrant, doing entries into the houses and locking up the bad guys. All that. There was a couple car chases, a couple of folks that didn’t want to be arrested that either ran or wanted to fight a little bit. So plenty of excitement. But mostly, it’s about just nose to the grindstone, doing the investigations, building the relationships, and getting the mission done.

Beau Friedlander:

So the Secret Service started actually on the financial side as tracking down counterfeiters and stuff like that. Am I right? Or how did it begin?

Brian Ebert:

You’re exactly right. We came into existence in 1865. President Lincoln actually commissioned us to investigate counterfeit currency during the Civil War at that time. It was estimated that over a third of all the currency in population was actually counterfeit. But yeah, we worked for currency investigations which we still work to this day. And it kind of morphed into the other types of fraud.

Brian Ebert:

It wasn’t until 1901 when President McKinley was assassinated that we actually started … Our protective mission started. And both of our investigative mission and our protective mission, which we really consider one mission, two different parts of our mission, have really grown exponentially on both sides. And protecting people grew into protecting places as well as events, certain events that are designated. So we protect those events as well.

Brian Ebert:

And on the investigative side, we’ve grown to a point where our job is to help keep the financial infrastructure of the country safe. And so we really mostly now, we still work kind of for currency and more traditional frauds but the majority of what we do is we investigate cyber-enabled fraud cases. And so that’s really the backbone of our investigative mission. And we’re able to use what we learn on both sides of our mission to support the other. And that’s why it makes sense to have these two parts to the mission which seem to be unrelated at first but it really makes sense for one agency to be involved with both because they mutually support each other so well.

Adam Levin:

And you’re also working on things like cryptocurrency scams, too, right? Wouldn’t that be part of the-

Brian Ebert:

Absolutely. I mean right now, I know the agency … I’ve been out for a few months but I know the agency’s very focused on investigating and seasoning digital assets from cyber criminal actors and educating the public also about how to recognize the use of digital assets like BitCoin and other digital currencies that then the bad guys are using to launder, cashout stolen funds from ransomware attacks or other types of digital scams. Like exploiting online dating and professional networking sites, social media scams. Any type of cyber-enabled financial crimes. The Secret Service actually has the new public-facing cyber currency awareness site to educate the community and to provide a forum for reporting potentially illegal activity.

Adam Levin:

When you talk about counterfeiting, so there’s obviously counterfeiting currency but you also talked about another kind of counterfeiting program and that had to do with credit card counterfeiting, right?

Brian Ebert:

Absolutely. We got involved with credit cards soon after they started to be used and the bad guys are always adapting and evolving so we have to be as well. And they were quickly learning how to commit fraud with either stolen credit cards or doling credit card numbers that could be encoded onto the magnetic strip of counterfeit credit cards and embossed onto the front of the card. And then often using a counterfeit IDs to support with these counterfeit credit cards, again containing stolen credit card account information to purchase high dollar items. So that’s certainly been an issue for a long time.

Beau Friedlander:

So when did this start though? Is this pre … I think of the Silk Road black market of yesteryear and it predated that, no? Did scams start with credit cards? I mean Adam would know the answer to this too, from day one or soon after?

Brian Ebert:

They absolutely did. I mean long before the Silk Road-

Beau Friedlander:

What year are we talking about?

Brian Ebert:

We’re talking around 2006.

Beau Friedlander:

Okay. Wow.

Adam Levin:

So that was before there were transaction alerts for credit cards. That was before we had credit cards with chips in them. Where would they get the stock that they would use for the fake credit cards?

Brian Ebert:

The group that we were investigating did not make the counterfeit cards themselves. They purchased those in bulk for sleeves of 500 from overseas. So they would come, they would have a bank on them, it might be Citibank, it might be any number of different banks on them. And the front would be blank with no numbers or name embossed into the plastic. And the magnetic strip, it would be a real magnetic strip but it would be empty of information.

Travis Taylor:

So you’re mentioning that they were getting these cards from overseas. Was there one specific hub or one country that was more prone to have these or was it just a truly worldwide operation?

Brian Ebert:

These particular cards were being purchased in Hong Kong. The bad guys were very smart. They would decentralize the different parts of this scam. The first part was that they would enlist servers in restaurants to use small, handheld devices that were skimming devices. And so when customers would pay for their meal with a credit card, on the way to the stand to run the card, they would slide it through the device, in the skimming device, which would capture the information.

Adam Levin:

So in other words, Beau would go into a restaurant. He would finish dinner. He would hand his credit card to a waiter. The waiter would go into the backroom because those were the days where they would take your credit card and go into the back as opposed to bringing a little device for you to stick your card in. They’d go in the back, they’d do the normal credit card charge, but they would make a copy for themselves while they were at it.

Brian Ebert:

That’s exactly correct.

Adam Levin:

And then what is a skimming device? What does it actually do? How does it work?

Brian Ebert:

It’s just a portable version of a … Like a [inaudible 00:20:23] still terminal except all it does … Like that you’d use at any merchant that when you put your card in, it reads the information. But this skimming device is smaller and all it does is capture the digital information that’s on the magnetic strip. So it will be the name of the cardholder and it will be the account number and perhaps some other information.

Brian Ebert:

Now this was before other security features that now exist on credit cards. Before they had been implemented-

Beau Friedlander:

Like the EMP chip or something, yeah.

Brian Ebert:

Correct. It was before … Just when chips were coming out and the CVV codes weren’t being used regularly yet. So it was before some of the … These sort of scams is why some of these security features were added by the banks, for sure.

Beau Friedlander:

In 2000 … I would say ’01, maybe right 2000, in Chinatown … I used to work in Chinatown. I purchased a-

Adam Levin:

We won’t ask Beau what he did in Chinatown.

Beau Friedlander:

I was the book publisher. And so I was-

Adam Levin:

That’s what they all say when they work in Chinatown. No, I’m a book publisher.

Beau Friedlander:

They all say, it’s weird, walk down the street, you throw a rock, and you got a book publisher. But at any rate, I was down there and I bought a pair of sneakers at this shop on Canal Street. And a few days later, my credit card had $5,000 worth of gold charged on it, gold jewelry, that was purchased on the west coast. And that was in 2000. But it sounds a bit like what you’re talking about. Is it possible that I was skimmed way back then? Or did these skimming devices not exist back then?

Brian Ebert:

It absolutely existed for sure back into the 90s. But there are also all sorts of other ways for criminals to steal the information. One of the first cases that I was involved with, I wasn’t the case agent on it but I helped out with it as a real junior agent. So this is like 1992. We called it the Frederick’s of Hollywood Case because there were folks that served as operators that you could call in to Frederick’s of Hollywood to buy a lingerie or whatever tickled your fancy from that company. And they were capturing all the credit card numbers from customers that were buying from Frederick’s of Hollywood. And sell them in bulk to other bad guys who, again, would encode and emboss them onto counterfeit cards and use them to do cash advances or to do high dollar purchases for items that they could turn around and fence. It’s been going on a long time.

Adam Levin:

So the guys who were doing the skimming in these restaurants, the waiters, were they getting a piece of the action, by the way, in those days?

Brian Ebert:

Generally, they were getting paid a flat rate which would be pretty low. Like $25 a number that they skimmed. Because that card might have $5,000 worth of credit or it might have 50 bucks worth of credit.

Beau Friedlander:

And is this anyone or is it … Did they pick a specific … Did they just go to Italian restaurants? I cannot believe I said Italian restaurants. Did they go to German-American restaurants or McDonald’s or what kind of places were they going?

Travis Taylor:

Good save.

Adam Levin:

Or higher end restaurants?

Beau Friedlander:

IHOP.

Brian Ebert:

I can say that I’ve seen these sort of skimming operations work out of many different types of restaurants.

Beau Friedlander:

Okay. But they’re going after waiters and they’re just saying, every time you do it, we’ll give you a certain amount of money?

Brian Ebert:

So the device is designed to take multiple … Every time you slide it, it adds on another line of data. So you slide somebody’s card, it grabs the data off of that which might take three lines, and then you’d go and grab the next card from somebody paying their bill and you put it in and it’s the next three lines. So-

Beau Friedlander:

If you caught one of them, they couldn’t help you catch the other guys? It was decentralized?

Brian Ebert:

Not talking about this particular case but often when you caught the skimmers, they only knew one person and they knew them by their first name and it was just the waitress trying to make extra money. Or a lot of times, the waiters would maybe have gambling debts and this was the way to pay off the debt. Like hey, you owe Jimmy $5,000. You get us a hundred numbers and your slate will be clean. It was also a decent amount of that incentive or sometimes it was just straight money.

Adam Levin:

Beau made me get him 200 credit cards so I thought that was a little unfair. But are the ways that consumers can protect themselves from being victimized by a skimmer?

Brian Ebert:

Well the good news about this sort of scam is that with all the new security features, that we’re not seeing as much of this. We are still seeing it at … There’s fake ATM machines. We’re seeing it gas stations where they put up a fake card reader that’s really just capturing all that information.

Brian Ebert:

The advice that I’d give is to just pay attention and in terms of ATMs, I would make sure it’s in a reputable area, preferably at a bank. But just pay attention and use your common sense and be thoughtful about where you use your cards.

Brian Ebert:

The other thing is, most of the victims of these scams where their number information, account information is stolen one way or the other, they don’t know a crime’s been committed until they get their bill. And back then, it wasn’t normal that people could go online and check their credit card account information regularly. So if people could check their banking accounts and their credit accounts on a regular basis, they’re more likely to see that fraud activity and be able to shut it down quickly before the bad guys are doing significant financial harm.

Beau Friedlander:

And another thing that you can do, which is very common in Europe but not so common in the United States, is waiters in Europe when they bring your bill, they bring the reader with them and the card never leaves your sight. So you can’t do that in the United States always. The card sometimes does go back to the waiter station to get scanned. But you can kind of keep an eye on it and see if there’s anything strange happening. And like you said, nowadays, we do have transaction alerts so you can keep tabs on whether or not that card is being used.

Brian Ebert:

Yeah. I mean it is frustrating to know that those alerts are out there and available with most major banks and/or the Visa, MasterCard, and AMEX carriers and how many people don’t take advantage of that. It’s just a wasted opportunity to drastically limit the amount of fraud loss that happens when your information is stolen because it’s not a matter of it’s a matter of when as … And I know, Adam, I think all you guys make that point a lot and it’s true. So it’s partially about stopping the fraud in the first place whenever you can but there’s going to be times you can’t. And then it’s about mitigating it and limiting it as much as possible. So being vigilant.

Adam Levin:

Which means you have to know as quickly as possible you have a problem and transaction alerts is one of the ways to do it.

Travis Taylor:

So where was the shopping happening with the stolen credit cards?

Brian Ebert:

So these groups of shoppers, they’d go out, maybe five or six of them, with stacks of the counterfeit credit cards and matching counterfeit driver’s licenses, and they would fly all over the country. We have them in over 25 states going into big box stores like Best Buy, for example. Or it could be an Apple store or it could be a store that sells watches and other smaller jewelry and [inaudible 00:28:27] camera stores. And target … So big stores like this, usually, where there’s a lot of activity, where the people working the registers generally don’t have a great investment in the company itself. Like they’re not the owner or manager. They’re just-

Travis Taylor:

And it was largely consumer electronics or was it just-

Brian Ebert:

Yep.

Travis Taylor:

… really anything? Okay.

Brian Ebert:

It was largely consumer electronics. Something they could easily … Whatever was selling in big back then, there was iPods and iPads and laptops. There was a lot of laptops. Cameras, digital cameras. Anything like that. You’d see some one-offs but it was mostly the small consumer electronics. They knew they could turn, they could fence very quickly for 50 to 75% of the face value.

Adam Levin:

Were they being fenced in small stores? On street corners? Where were they fencing?

Brian Ebert:

The answer’s yes. They were moving them all sorts of ways. They had stores that people didn’t really care that much to know the history of where these things came from and didn’t ask questions about, “Hey, how come we’re getting these for half price or 25% off when they’re brand new?” There was just all sorts of unscrupulous folks, stores, people that run stores. But also, a lot on the street. I’m visiting New York this week and walking around, you just see, there’s all sorts of different ways that you get approached to buy something.

Adam Levin:

Yeah, especially Time Square, yeah.

Brian Ebert:

Time Square, Chinatown, all over the place. There’s just a lot of opportunity to move this merchandise.

Adam Levin:

These guys were basically using counterfeit credit cards to buy real stuff that a lot of people figure when they buy in the streets, ah, it must be counterfeit but it’s cool. But it’s not counterfeit. It’s the real deal.

Brian Ebert:

A lot of times, certainly in this particular case that I was talking about, it was certainly the real deal and purchased on counterfeit credit cards but you can never forget what’s on that counterfeit credit card is stolen, real people’s stolen account numbers. And so they might live in New Jersey and the card might be used in Oregon to commit the fraud and they don’t know a crime happened until 30 days later when they get their bill, if they catch it. And they’re like, “Hey, I’ve never even been to Oregon.”

Beau Friedlander:

And then that thing that was bought in Portland is being sold on the street of New York to somebody. So now, the crime … Where’s the crime happening? Is the crime happening … I know where some of them are happening but it sounds like there’s several crimes happening. Is the purchase on the street of this item which was purchased with a counterfeit card that was stolen, a crime? It just sounds to me like there’s just … This is a crime-fest.

Brian Ebert:

That’s what made this case so interesting is that there was all these different criminal activities that all were rolled up to a couple of the big bosses but these different groups committing them didn’t even know each other. So certainly, it’s a crime to steal somebody’s account number on a skimmer without their knowing. That’s a crime in and of itself. The manufacturing and encoding, embossing of counterfeit credit cards is a crime. It’s access device fraud.

Beau Friedlander:

Even if it happens overseas?

Brian Ebert:

Where there’s committed in the United States, the Secret Service has primary jurisdiction in terms of federal law enforcement. We have a lot of overlap with the FBI in these sort of cases. And we work really closely. They are on our cyber fraud taskforces. We’re on their cyber taskforces. But they tend to prioritize cases that involve state actors or terrorism or crimes against infrastructure and things like that. If it’s purely financial in nature, generally the Secret Service has primary jurisdiction on this. Although, we work a lot of these things together. But that’s how these cases, why these cases, are transnational organized crime cases. They often have, especially when you get into the more cyber-enabled fraud, this fraud we’re talking about is a little bit antiquated. Different parts of it are certainly still happening today. But as you get into the cyber-enabled fraud, there’s almost always an international element to it.

Adam Levin:

And oftentimes, the international element involves a government, perhaps, that may not necessarily be friendly to the United States and is looking for an additional revenue stream, perhaps.

Brian Ebert:

That’s certainly been the case in some cases that I can think of, for sure.

Travis Taylor:

With these syndicates, I think one thing I’m trying to wrap my head around is how big they are. It sounds like they’re obviously enlisting the aid of lots of people with say waiters at a restaurant, things like that. But in terms of the core organizing groups that are behind these. Is that something like 10 people or 100 people or 1000?

Beau Friedlander:

It was just Adam and me.

Brian Ebert:

So-

Adam Levin:

Beau.

Brian Ebert:

When you talk about these waiters, there’s some people that are sort of managers and they go out into that community of folks. And it’s often folks that are ethnically or culturally connected. This particular case was in the Asian community but I’ve seen it in all sorts of different communities that exist in the United States, white, black, brown. It certainly runs the gambit.

Adam Levin:

So it’s equal opportunity.

Brian Ebert:

It absolutely is equal opportunity. And these folks are going to as many skimmers, physical, the skimming devices, which are relatively cheap, that they have, they’re going to enlist as many waiters as they can. So it might be 20, 30, 40 different waiters that have been involved. We don’t really know.

Adam Levin:

Is this still going on, by the way, Brian?

Brian Ebert:

Skimming cases are going on. I’ve heard of them less in restaurants like this and more with fake devices like fake readers at … Gas stations are big. I mean a couple years ago, there was a huge case all over the country with these gas station skimmers where they actually put a facade over the front of some of these pumps so that you’re not putting it into the store’s, you’re putting it into theirs.

Beau Friedlander:

And driving by that, Brian, would you be able to spot one yourself having worked on these cases?

Brian Ebert:

No. I mean … [inaudible 00:35:15] inspected it and we certainly have … When I was young in the Secret Service, we all wore every kind of hat that there was. You would do the surveillance, you’d do undercover, you do interviews. We all kind of did everything. As these crimes have become more sophisticated, we definitely have our folks more specialized. So we have our folks that go … All of our agents now go through basic cybercrime training, but we have a lot of our folks that now go through really high-speed training in that area. And they could certainly spot these things. But driving by on the street, I don’t think anybody would be able to tell. You’d have to go up and examine it and obviously, there’s hundreds of thousands of gas stations in the United States.

Adam Levin:

While this scam was primarily in-person and offline, I think we can say that the same strategies are used today. Phishing, shopping site hacks, buying and selling user data on the dark web. Scammers just get into your life when you’re not paying attention. And in those days, people weren’t paying as much attention simply because you didn’t have the kind of access then that you do now.

Beau Friedlander:

Yeah. It was impossible. You couldn’t.

Adam Levin:

You couldn’t. It’s not like you could go online and monitor your credit card activity or get transaction alerts. It was like you had to wait until the end of the month or you would find out the really unpleasant way which is you went to the store, you pull out your credit card, you try to charge something and you were declined because you were over the limit.

Beau Friedlander:

I actually liken it, guys, to the early internet which you may recall, in the late 90s when you were downloading something, it took forever. Du, do, do, do, do-

Adam Levin:

The dial tone.

Beau Friedlander:

When I got that bill for the gold that I didn’t buy that someone bought with my credit card, it came at the end of the month and it was $5,000 more than my credit card usually was. So I had a heart attack. Nowadays, the heart attack comes much faster because we have fast internet and so-

Adam Levin:

Instant gratification.

Beau Friedlander:

instant dying in your shoes because I get a text saying, “Did you just buy an airplane?” No, I didn’t but-

Brian Ebert:

And this is why our philosophy, back, started in the 90s and with our initial electronics crimes taskforces that have now morphed into our cyber fraud taskforces. And the business model is, Secret Service leads these. They’re all in all major cities in the United States and a few international ones. But the business model is to bring together all the federal, state, local law enforcement in a particular area, particular region. But also to bring in the private sector, mostly financial sector folks. So all of the bank investigators. And then we bring in academia because the academia folks, they’re going to see trends, they’re going to be following the technology. The bank folks are going to see … Even before all the advances have been made in the last 20 years, they were still going to see trends.

Brian Ebert:

And so that’s how we found out about that skimming, buying counterfeit credit card case that we’ve been talking about, is that the bank saw some patterns. And since they sit in our cyber fraud taskforces and we’re all there shoulder to shoulder and we’re meeting regularly, they let us know, “Hey, we’re seeing some activity here.” And the AMEX guy might be sitting next to the Citibank guy and sitting next to the MasterCard guy. And so we start seeing these trends and then we can be very strategic and focused in our investigations and look for a way in, which might be an arrest of a skimmer that can provide us some information that can go back to the manager. Or it might be one of the shoppers got caught out in another state and he might have got caught two weeks ago but we can go back and take a look at that evidence. And that’s what we did. It was a number of different police reports we looked at. And informants that were developed and information from the banks. And we start to piece it all together and to start identifying the people that are running it and then target them through different types of investigation.

Beau Friedlander:

So you did eventually get the funnel down to the prime-

Brian Ebert:

Yep.

Beau Friedlander:

… members of this scam. And how many were there at the end? When you finally got to the bottom of it? You did crack this case, yeah?

Brian Ebert:

Yeah. The agents that were working this case did a great job. This case got so big, we ended up having three case agents which is unusual for us. We had a squad of 22 agents and there was times when most of us were working this case. But three of them worked it over several months, over a year, full-time. And we ended up making 11 arrests. And we ended up going up on a Title III wiretap when we were tapping some of the bad guys phone calls. And were able to figure out the whole conspiracy and with surveillance and with investigations and with other evidence-gathering through the banks, we were able to figure it out. So 11 folks were indited in that case and ended up doing some amount of prison time. And we seized a few million dollars, certainly a lot less than was probably stolen but we still seized a few million dollars in items that we recovered and in cash.

Travis Taylor:

After you busted this ring, was there any kind of discernible dent made in that form of crime or was it just more of a Whac-A-Mole scenario?

Brian Ebert:

I hate to say it but a lot of it was Whac-A-Mole until some combination of legislative fixes and/or banks bringing in new security features and new protocols. It’s more like the crime just seemed to float around to different groups. You might see a decrease in a certain population but someone else is there to pick up the slack. It’s hard with all the banks being disparate, even though we have as many investigators as we can in our taskforces, it’s still hard to have a really crisp, clear, macro view of what’s going on. But this scam was, I’m sure there was dozens of scams going on like this at the same time and we did and do the best we can to strategically take out the biggest actors.

Brian Ebert:

The Secret Service generally is not going to get involved in a single case of somebody having their identity stolen or there being fraud on somebody’s credit card. We’re looking for trends and patterns so we can focus on these large groups which again, are often transnational in nature, and focus where we’re going to get the biggest amount of prosecution and seizures and arrests. We seize a lot of money that a lot of that’s able to go back to the victims, and sentences. So we really look for the biggest bank fraud buck. Because we’re a small agency. Secret Service has less than 4000 agents throughout the whole world. And so we really look to use our cyber fraud taskforces as multipliers to work with state and local and city law enforcement and our federal partners in the private sector to be as strategic as possible so we can make the biggest impact in the community to reduce these sort of frauds.

Adam Levin:

A situation like this versus today, this was obviously very labor intense for the criminals. I mean they needed a lot of guys. Whereas today, with cyber, you don’t need a lot of guys and you can cover a lot more ground which makes cyber even more dangerous.

Brian Ebert:

Absolutely. Absolutely.

Adam Levin:

So before we end, maybe skimmers aren’t as common as they were in the 2000s but what can people look for in order to just better protect their stuff in today’s world?

Brian Ebert:

Keep their eye on their cards when you can and to regularly check their accounts online. And certainly, make sure they’re signed up for the transaction fraud alerts that all the banks provide now. But on top of that, just pay attention to what’s going on in their accounts. And we all use our card some place where afterward, we get that little itch in the back of our neck. We’re like, that was a little sketchy. So especially in those occasions, to make a point of going online and checking regularly so you can be right on it. I don’t know anybody who’s card hasn’t been used, one of their cards hasn’t been used, for some sort of fraud. So it’s all about stopping it when you can but being able to quickly be aware of it so that you can shut it down and not get in a place where you’re having to fix your whole credit and have to jump through all those hoops and all that pain. Just to be on it realtime as much as possible, I would say.

Adam Levin:

Well listen, Brian, this has been awesome. We really appreciate you coming and I know you’re a savant of stories so we would definitely want to bring you back because I have no doubt, this is but one of many hair-raising, fundraising stories that you can tell us. So thanks an awful lot. And we really appreciate you making time to talk with us.

Brian Ebert:

Listen, I appreciate the opportunity and I’ve enjoyed it. I’d be happy to come back on and chat with you guys. I really appreciate what you guys are doing out there in the space to tell these stories, be entertaining, but educate folks about how they can protect themselves because that’s what it all comes down to. Even with all these great security features and all this information and knowledge that’s out there, it comes down to paying attention and making a decision to be aware and protect yourself and clearly, that’s what you guys are all about. So happy to talk with you.

Beau Friedlander:

Thanks, man.

Adam Levin:

So, as we say, until we skim again.

Brian Ebert:

Oh man.

Travis Taylor:

Knew we had to end on a bad joke.

Beau Friedlander:

Hey, Adam?

Adam Levin:

Beau?

Beau Friedlander:

Travis?

Travis Taylor:

Yes.

Beau Friedlander:

I hate when you do that.

Travis Taylor:

Yeah, I know.

Beau Friedlander:

You’re like a-

Travis Taylor:

It’s my pleasure.

Beau Friedlander:

All right. Both of you. I mean, I have transaction alerts my card and this weird game of cyber fraud and counterfeit credit cards but there are other things that you can do to protect yourself. And Adam, I know we mentioned it in the show but you’re the one who taught me that you need to look at your accounts every day.

Adam Levin:

Every day.

Beau Friedlander:

Do you actually do it?

Adam Levin:

Every day. Actually, I get accused by my wife of looking at them every hour.

Beau Friedlander:

So in other words, you really will know within minutes or hours that you’ve been hacked?

Adam Levin:

Pretty much.

Beau Friedlander:

Travis, do you have anything else that people can do? It’s scary to think that you could get … I always thought you could see a skimmer but it doesn’t sound like you can always.

Travis Taylor:

Yeah, they’re really low-profile. Especially the ones that they can put on gas pumps and ATMs. They are just tiny. They fit right over the slot so yeah, you’d have to be looking really hard to spot one.

Adam Levin:

Yeah. But one thing for sure, don’t use debit cards.

Beau Friedlander:

Why though?

Adam Levin:

Because with debit cards, it’s your money. With credit cards, it’s their money.

Beau Friedlander:

Oh. But they have protections now or they don’t? Not as robust?

Adam Levin:

They have protections but they do reserve the right, a lot of financial institutions, to investigate to make sure that it really was a fraud as opposed to you just had buyer’s remorse. So it’s … You have to be careful. Also, because they’ll block your account for a certain amount of money until they finish their investigation. With credit cards, it’s a little bit more free-flowing. You report it, they freeze it, they do all kinds of different things that is just, I think, more protective of consumers.

Beau Friedlander:

Yeah. Well I had … That money that I had charged to my card for the gold back in the day, that was on my card for two months, as I recall. It was frozen on my card for two months.

Adam Levin:

And by the way, Travis and I want to thank you because that in part, has helped fund What The Hack with Adam Levin.

Beau Friedlander:

Oh. I know that’s how you got your teeth. You can’t see Adam, but all of his teeth are gold, all of them.

Adam Levin:

My grill. My grill.

Beau Friedlander:

Yeah. Where’d you put your gold, Travis?

Travis Taylor:

Wouldn’t you like to know.

Adam Levin:

So on that note, thanks a lot for listening. And by the way, if you want to give us some real gold, like five-star gold-

Beau Friedlander:

Rate and review.

Adam Levin:

Please write a review. And thank you for listening to What The Hack with Adam, Beau, Travis, Brian, and the rest of humanity.

Beau Friedlander:

What The Hack with Adam Levin is a production of Loud Tree Media.

Adam Levin:

It’s produced by Andrew Steven, the man with two first names.

Travis Taylor:

You can find us online at loudtreemedia.com and on Instagram, Twitter, and Facebook at Adam K Levin.

Beau Friedlander:

Loud Tree.