By SARAH SHMERLING | Editor-in-Chief
Pacific Palisades Community Council hosted a guest speaker from the Department of Justice who spoke about common digital and gift card scams, including how to detect them, at its meeting at Palisades Branch Library on November 9.
Assistant U.S. Attorney Ranee Katzenstein of the Major Frauds Section of the DOJ Central District of CA, who is a 30-year resident of the Palisades, gave a presentation before taking questions from audience and board members.
“The Major Frauds Section investigates and prosecutes some of the most significant white-collar crime cases in the country,” according to its website. “The Section is comprised of experienced federal prosecutors, and is nationally recognized not only for the size and sophistication of the cases it handles, but for the breadth of its caseload.”
Significant cases have involved corporate embezzlement, securities and accounting fraud, insider trading, and stock manipulation: “The cases brought by the Section frequently involve losses to victims totaling tens, if not hundreds, of millions of dollars.”
With 25 years of experience in the Section, Katzenstein served in “several units in the Criminal Division,” leading to Chief of Major Frauds in 2018.
“Ms. Katzenstein has prosecuted narcotics offenses, violent crime cases and the full panoply of financial fraud matters,” according to the DOJ website. “Ms. Katzenstein has secured convictions against corporate officers and hedge fund managers who used various schemes to defraud investors, a corporate director who engaged in insider trading, bank insiders who took bribes, finance professionals who embezzled millions from their clients, and attorneys who assisted in these schemes.”
One of the scams Katzenstein detailed during the meeting is referred to as “pig butchering,” a “hideous term” that refers to a scam designed to “fatten up targets” before scamming them.
In this type of scam, a financial predator will establish a digital relationship with a victim, sometimes over social media. Once the victim trusts the scammer, the scammer convinces the victim to make an investment, often repeatedly, before taking the funds.
Katzenstein reported one instance of this type of scam where the scammer “mistakenly” emailed the victim a golf tee time, which led to a conversation back and forth between the scammer and victim. After trust was built, the scammer told the victim about an “investment opportunity.” Following fake account statements and even allowing the first withdrawal, the victim lost roughly $5 million.
Another common scam is via gift cards, in which a scammer contacts a victim, pretending to be a person or institution they trust, with an urgent situation (like lost access to a bank account) that can be resolved by purchasing gift cards. The scammer then requests the numbers to the gift cards and, often within minutes, has the funds transferred to an alternate card the victim cannot access, which is often a Target card, Katzenstein explained.
“You would not believe how many people fall for that,” Katzenstein said.
Katzenstein cautioned to be wary of opportunities, including investing, that seem “too good to be true,” and to think twice before sending money.
“The best crime is crime that never happened,” she said. Red flags to watch out for include a situation being urgent, odd instructions or being told to not tell anyone. If someone calls pretending to be an institution, like a bank, Katzenstein recommended hanging up and finding the number online to call back before providing any information.
For victims who have been scammed, Katzenstein said to file a report with Los Angeles Police Department, which works closely with the FBI in cases like this. Sometimes even getting scammed out of a seemingly small amount can lead prosecutors to scammers who have taken millions from other victims.
“Don’t be embarrassed by it,” Katzenstein said. “You are being victimized, it is not your fault.”
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