Creative E-Trade and Similar Salami Scams - Ignorance is Bliss

Posted on May 22nd, 2009 by Tim Bass

Here is one of my favorite news stories of the week, Guilty Plea for Man Behind Creative E-Trade Scam.

In this funny story, Michael Largent, 23, of Plumas Lake, CA, wrote a simple Internet script that opened more than 58,000 online accounts at places like E-trade and Schwab. Largent used fake names to automatically open bogus accounts and attempted to profit from the tiny test deposits used to validate bank accounts.

Now you would think that these big financial institutions could detect such obvious fraud before tens of thousands of these accounts are opened, but apparently they cannot. Largent almost pocketed $50,000 according to the DOJ. Not sure if the $50K includes $8,000 in micro-deposits from Google not included in the indictment.

If you are like me, you are trying hard not to fall over laughing at Largent for his creative fraud. We all use these micro-payment authentication methods, but who among us ever thought to write a script and try to make money! The crooks are smarter than us, LOL.

And hey! The small fry CEP vendors have been hooting their own horns about how great CEP is in financial services. Can’t any of your CEP-engine clients detect thousands of new account openings to the same bank accounts from Micky Mouse, Donald Duck Hank Hill and Rusty Shackelford?

ROTFL he is ….

Well, it is no wonder I live in a tropical paradise, work on the Internet, play golf and tennis, and don’t get job offers from folks in financial services and big companies in the valley. I am not dumb enough or willing to repeat the overhyped marketing mantras.