Internet Fraud

The Cryptic Ways of Cryptocurrency Litigation

January 18, 2018 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

Bitcoin has been all the talk by way of investors and the question arose this week when prices dropped as to the legality of a Bitcoin exchange shutting down when prices were falling. It is alleged that trade halts were made for a period of two hours. The price drop was rather substantial from $20,000 to $11,000. It is said that the outage was for reason of technical difficulties and not intended to rescue the currency from free-falling, as the legality of doing that would be questionable. In fact, it is illegal for trading to be put to halt without following the Securities and Exchange Commission’s guidelines. Foreign currency exchanges are less regulated, and the for such reasons there are increased risks for loss, malfunctioning trading systems, and fraud.

Some even speculate that Bitcoin exchanges may stop completely if much fraud, technical difficulty, glitches or hackers and/or malware become common. Legal precedent set in this area of law is rare, though civil litigation in this area has started. The stoppage has certainly started lawsuits claiming damages. Mt. Gox, a bitcoin exchange in Tokyo, collapsed after it halted withdrawals and eventually conceded that its holdings, worth approximately $65 million at the time, had been stolen by hackers.

The site also came under great scrutiny for possible “insider trading” among its employees before the site started to support Bitcoin Cash, a fork of the Bitcoin project. CEO Brian Armstrong pledged that the company will investigate those allegations internally.

In a previous decision in around late August, a federal judge ordered the return of 11,000 bitcoins worth about $30 million in a decision considered the first of its kind. The ruling stemmed from a class action in which plaintiffs alleged that the defendant had stolen their money and fled to China. The judgment highlights the decentralized nature of bitcoin, with no person or authority in charge. It makes it difficult for winning plaintiffs to get their bitcoins that they are entitled to back. Continue reading ›

Best Websites to Learn About Consumer Law Issues — Our DuPage, Lake, and Cook County, and Chicago Consumer Lawyers Can Assist You in Consumer Fraud and Deceptive Business Practices Lawsuits

April 24, 2010 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

The National Consumers League’s webpage contains numerous tips for avoiding internet fraud. You can view the site by clicking here. Be on the watch for credit repair scams promising to clean your negative credit history. Below are tips fron the League’s website on how to avoid credit repair scams:

No one can erase negative information if it’s accurate. Only incorrect information can be removed. Accurate information stays on your record for 7 years from the time it’s reported (10 years for bankruptcy). Even information about bills you fell behind on but now are paid will remain on your report for these time periods.

Credit repair services can’t ask for payment until they’ve kept their promises. Federal law also requires credit repair services to give you a explanation of your legal rights, a detailed written contract, and three days to cancel (this applies to for-profit services, not to nonprofit organizations, banks and credit unions, or the creditors themselves).

Online Fraud Magazine is a Great Resource for Tips on How to Uncover Business Fraud — Lubin Austermuehle’s Chicago Business Law Lawyers Work With Certified Fraud Examiners to Help Businesses, Partners and Shareholders to Recover Monies Lost Through Frauds

April 20, 2010 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

The online magazine of the Association of Certified Fraud Examiners is a great resouce for tips on uncovering the varying forms of business fraud. You can click here to view it.

A recent issue of the magazine had a very informative article about how certain types of documents are susceptible to employee forgies and other frauds . The article had this to say about fax invoices:

FACSIMILE DOCUMENTS

Beware Fake IRS Emails Which Scam Consumers and Businesses — Our Chicago Consumer and Business Fraud Trial Lawyers File Individual and Class Action Suits to Stop Frauds

February 19, 2010 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

The below video describes how fake IRS emails are used to scam consumers and businesses.

Our consumer rights and business fraud prevention law firm handles individual and class action unfair debt collection and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. Lubin Austermuehle is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.

Our Naperville, Evantston, Aurora, Waukegan, Joliet, Elgin, Highland Park, Northbrook, Wilmette, Wheaton, Oak Brook, and Chicago business and consumer fraud lawyers provide assistance in fair debt collection, consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases we have handled. A video of our lawsuit which helped ensure more fan friendly security at Wrigley Field can be found here. You can contact one of our Chicago area consumer protection and business fraud prevention lawyers who can assist in lemon law, unfair debt collection, junk fax, prerecorded telephone solicitations, and other consumer, consumer fraud or consumer class action cases by filling out the contact form at the side of this blog or by clicking here.

Google Sues for Declaratory Judgment That Keyword Advertising Does Not Infringe

December 9, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

Google, the target of multiple online trademark infringement lawsuits, made a preemptive strike back in early August when it countersued the named plaintiff in a pending case against it. According to law professor Eric Goldman’s Technology & Marketing Law Blog, Google sued John Beck Amazing Profits, LLC, in the Northern District of California on July 27. The suit was a response to an Eastern District of Texas filing against Google on May 14, which was a putative class action led by John Beck. The web search giant seeks a declaratory judgment that it is not infringing on John Beck’s trademarks as well as damages for an alleged breach of its AdWords contract by John Beck when it sued in Texas — in a district with a reputation as advantageous for intellectual property complaints — rather than California.

In the first lawsuit, John Beck — a Los Angeles company that sells real estate investment advice– sued Google as well as several companies that use its technology for selling its trademarks as keywords using Google AdWords. The proposed class was very large, including all trademark holders in the United States whose trademarks have been sold as a keyword or AdWord for the past four years. However, according to Google’s countersuit, the complaint in that case had not been served to Google as of August 2, even though it was filed May 14.

Google responded with its suit for declaratory judgment, which targeted only John Beck. Its complaint alleges that John Beck’s original lawsuit was anti-competitive and subverted trademark law’s goal of preventing deception of consumers. It asked the court for declaratory judgments that it did not infringe John Beck’s trademark, contribute to such infringement, vicariously infringe it or falsely designate the origin of its mark. It also made a claim for damages from John Beck’s alleged breach of Google’s own AdWords contract, which it entered into as an AdWords customer. That contract included a provision that disputes should be settled in the Northern District of California, Google’s home jurisdiction, making John Beck’s choice to file in East Texas a breach of contract. As Professor Goldman observed, Google is probably also trying to move the venue of the original East Texas suit to the Northern District of California.

The original John Beck lawsuit was one of multiple lawsuits with similar trademark-infringement allegations against Google for its AdWords program. At Lubin Austermuehle, our Chicago online trademark infringement lawyers and Wheaton, Waukegan, Joliet and Chicago trial lawyers have investigated, and pursued similar claims. As of early August 2009, no court has ruled on the substance of these claims, although rulings on related matters have been slightly favorable to trademark holders. As with all trademark claims, the plaintiffs in cases like John Beck’s class action can ultimately win only if they show that Google’s advertisements create a likelihood of confusion among consumers looking for their products online, which can depend heavily on the circumstances and details of each case. Our Illinois Internet trademark attorneys work hard to prove those claims on behalf of clients.

New Jersey Man Sued and Criminally Charged for Alleged Theft of Domain Name

November 18, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

As Illinois online trademark infringement attorneys, our interest was piqued when we saw an Aug. 4 article in the New Jersey Star-Ledger about civil and criminal charges against a man accused of outright stealing a domain name. P2P.com, LLC v. Goncalves et al, pending in New Jersey federal court, accuses Union, N.J. man Daniel Goncalves of hacking into an email account owned by Albert and Lesli Angel in order to illegally gain control of three of their domain names. These are p2p.com, drugoverdose.com and profreedom.com, which are co-owned by investor Marc Ostrofsky. Goncalves, a 25-year-old who runs a Web hosting business, was arrested in late July for the same alleged actions, in what the newspaper said may be the first criminal case over the theft of a domain.

A domain name is the unique identifier for a Web site — for example, chicagobusinesslawfirm.com is the domain name for one of our own Web sites. Some investors buy domain names they believe will be in demand and therefore valuable someday. That was the case when the Angels and Ostrofsky bought p2p.com for $160,000 from a Wisconsin company called Port 2 Print, believing they could resell it to a business related to peer-to-peer software. On the Internet, peer-to-peer software is frequently referred to as p2p. Similar thinking went into the purchases of profreedom.com and drugoverdose.com. They paid to register and “lock” p2p.com for ten years with registrar GoDaddy.com.

But in 2006, the investors’ complaint alleges, Goncalves and possible others intentionally and knowingly gained illegal access to the Angels’ AOL email account, allowing them to transfer the domains from the Angels’ GoDaddy hosting account to another hosting account they controlled. They then allegedly re-registered the domains under false names and addresses and redirected traffic away from the sites. A few months later, the complaint says, the defendants put p2p.com up for sale on auction Web site eBay, where NBA player Mark Madsen paid more than $111,000 for it. Drugoverdose.com has also been resold. The complaint also accuses Goncalves of falsifying records showing that the Angels sold the domains to Goncalves. An attorney for Goncalves told the Star-Ledger that Goncalves bought p2p.com for $1,500, through a third party he believed represented the Angels.

The lawsuit accuses Goncalves and others of breaking state and federal racketeering laws with their conspiracy to steal the domains; fraud; tortuous interference in the investors’ business opportunities and unauthorized access prohibited by the federal Computer Fraud and Abuse Act. More recently, the plaintiffs asked to add GoDaddy.com as a defendant for allegedly allowing Goncalves to transfer the domain. In addition to financial damages, the investors seek the return of all three domains and an order stopping the defendants from selling their domains. The new owners of the allegedly stolen domain names were named as defendants in the original suit, but according to news reports, Madsen claims to be a good faith buyer and the Star-Ledger said he has had civil discussions with the investors.

As Chicago online trademark infringement attorneys, we are very interested in the outcome of this case. As we noted, this may be the first case of criminal charges in a domain name theft. According to DomainNameNews.com, it may also break new ground if it holds GoDaddy legally liable for allowing the theft. According to that article, the Angels claim GoDaddy stonewalled their attempts to investigate and blamed them for inadequate security — despite evidence implicating Goncalves in earlier domain name thefts. Registrars are generally not found liable for allowing domain name theft, though there are notable exceptions. The decision(s) in this case could change that, at least in cases with clear negligence.

FBI Website Provides Tips For Avoiding Internet Fraud

February 28, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

The FBI maintains a number of web pages on fraud and internet fraud topics. The FBI web page on internet fraud provides tips for avoiding those scams “to protect yourself and your family from various forms of Internet fraud.” The following are the tips provided on the FBI’s web page:

Avoiding Internet Auction Fraud

Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the seller’s obligations are before you bid.

National Fraud Center’s Internet Fraud Watch Website

February 27, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

The National Fraud Center’s Internet Fraud Watch Website provides alot of useful information to help consumers and businesses identify the latest internet fraud. The website has this to say about internet fraud:

The Internet offers a global marketplace for consumers and businesses. But crooks also recognize the potentials of cyberspace. The same scams that have been conducted by mail and phone can now be found on the World Wide Web and in email, and new cyberscams are emerging. It’s sometimes hard to tell the difference between reputable online sellers and criminals who use the Internet to rob people. You can protect yourself by learning how to recognize the danger signs of fraud. If you are a victim or attempted victim of Internet fraud, it’s important to report the scam quickly so that law enforcement agencies can shut the fraudulent operations down.

If you are a victim of internet fraud, consumer fraud, unfair debt collection practices, or purchased a lemon automobile, rv or boat our Illinois based internet fraud, consumer fraud and class-action private sector lawyers may be able to assist you obtaining redress if the FTC, Illinois Attorney General or other government agency is unable to help you get your money back.