Department of Homeland Security Daily Open Source Infrastructure Report

Monday, May 18, 2009

Complete DHS Daily Report for May 18, 2009

Daily Report

Top Stories

 The Louisville Courier-Journal reports that emergency crews were not able to get ammonia out of the American Cold Storage facility in Louisville, Kentucky two days after the gas leak killed two workers on May 13. (See item 3)


3. May 15, Louisville Courier-Journal – (Kentucky) Ammonia remains in building. Emergency crews have not been able to get ammonia out of a storage company building two days after the deadly gas killed two workers. “Given the circumstances (and that) it’s still not controlled, it’s a major release,” said the on-scene coordinator for the U.S. Environmental Protection Agency. Wednesday’s leak at Louisville’s American Cold Storage facility on Industry Road in the Algonquin neighborhood killed two maintenance workers. The on-scene coordinator said authorities had not yet determined the cause of the leak, or even if the leak had stopped. He said, however, that it appears it might have slowed. “The amount in there, if released, could still be a hazard to the community,” said a spokesman for Louisville Fire and Rescue. A hint of ammonia could occasionally be smelled in the air. But the fire spokesman and the on-scene coordinator said authorities were monitoring the levels inside and outside the building, and there was no threat to the public. Source: http://www.courier-journal.com/article/20090515/ZONE07/90515019/Ammonia+remains+in+building


 According to the New York Daily News, the New York City Police Department has crushed a sophisticated identity theft ring that wrecked the credit of 6,000 victims and bilked banks out of $15 million in bogus charges. The scam, which stretched from New York to Nigeria, is one of the largest operations of its kind dismantled by the NYPD, the police commissioner said on May 14. (See item 9)


See Banking and Finance Center


Details

Banking and Finance Sector

9. May 15, New York Daily News – (International) NYPD breaks up identity theft ring in which 6,000 victims’ credit wrecked, banks bilked out of $15M. The New York City Police Department has crushed a sophisticated identity theft ring that wrecked the credit of 6,000 victims and bilked banks out of $15 million in bogus charges. The scam, which stretched from New York to Nigeria, is one of the largest operations of its kind dismantled by the NYPD, the police commissioner said on May 14. The thieves somehow managed to get their hands on thousands of credit cards legitimately issued in the victims’ names, but intercepted them before they arrived at the proper destination. They then called the credit card companies, using a legal device called a SpoofCard to disguise their voice and phone number, to activate the credit cards. Once the companies fell for the ruse, the suspects used the cards for cash advances or to buy luxury items in Japan, Saudi Arabia and Dubai. In some cases, they even paid to boost the card’s line of credit so they could go back for more cash. Once every penny was spent, the thieves recycled them as backup identification to open new credit accounts. The scam was discovered nearly two years ago when a Queens Realtor opened a package meant for one of his employees and found 60 credit cards, the type “normally issued in anticipation of a customer’s card expiring,” the police commissioner said. The NYPD traced those cards around the globe. During a 21-month investigation, cops used 80 phone taps to eavesdrop on more than 1 million calls, said the deputy chief, head of the special investigations division. Thirty-five suspects, mostly Nigerian immigrants in the city, were arrested and face charges of enterprise corruption, larceny and conspiracy. Source: http://www.nydailynews.com/news/ny_crime/2009/05/15/2009-05-15_nypd_breaks_up_identity_theft_ring_in_which_6000_victims_credit_wrecked_banks_bi.html


10. May 14, Bloomberg – (National) Regulators seek trace-like reporting for derivatives. U.S. regulators may impose the same price reporting and transparency requirements on over-the-counter derivatives that reduced bank profits by almost half in the corporate bond market when the Trace system was adopted seven years ago. “I think it is something we will look at very closely as a potential model,” the Securities and Exchange Chairwoman said on May 13 at a news conference in Washington, in which regulators laid out potential structural changes to improve policing of the $684 trillion OTC derivatives market. Trace, the bond-price reporting system of the Financial Industry Regulatory Authority, gives anyone with an Internet connection access to trading data for corporate bonds. The system, in full operation since February 2005, reduced the difference in prices that banks charge to buy and sell bonds by almost half. The Treasury Secretary, the chairwoman and the acting chairman of the Commodity Futures Trading Commission, called for increased oversight of over-the-counter derivatives to reduce risk to the financial system. Lax regulation contributed to the failures last year of Lehman Brothers Holdings Inc. and American International Group Inc., leading to the seizure of credit markets and causing more than $1.4 trillion in writedowns amid the worst financial crisis since the Great Depression. Source: http://www.bloomberg.com/apps/news?pid=20601103&sid=a.e5Xpc90Q0Q&refer=news


11. May 14, Reuters – (National) SEC proposes tougher investment adviser rules. U.S. securities regulators proposed tougher rules designed to ensure that investment advisers are more accountable for their client’s assets in the wake of massive fraud. The Securities and Exchange Commission voted 5-0 on May 14 to propose that investment advisers who hold their client’s assets undergo a surprise exam once a year to make sure those assets exist. In most cases, investment advisers do not physically control their clients’ assets, and those assets are maintained with a broker-dealer or bank, also known as a qualified custodian. But the investment advisers who have “custody” of their customer’s assets either physically control or have the authority to withdraw their clients’ funds. The proposal is open for public comment and needs to be formally adopted before it becomes a rule. Source: http://www.theusdaily.com/articles/viewarticle.jsp?id=745981&type=Business


12. May 13, Atlanta Business Chronicle – (Georgia) Bremen man indicted for $7M in fraud. A 43-year-old defendant was indicted on May 13 by a federal grand jury on charges of mail fraud, wire fraud, and money laundering in connection with an alleged $7 million fraud scheme. “In this latest chapter in the long book of investment fraud schemes, a man who lives in a small town in west Georgia allegedly persuaded investors from around the country that with his secret government contacts and other plans, he could make their money multiply into millions,” said a U.S. Attorney. “He will now be prosecuted in open court, where he is alleged to actually be just a thief who used lies to steal millions from his victims.” According to the U.S. Attorney, the charges and other information presented in court, starting in early 2006, the defendant allegedly promised investors that they would receive returns of between 40 percent and 150 percent on the money they placed in his “high yield” investment programs. The defendant claimed to own a bank, to have access to confidential and lucrative investment opportunities, or to be a “special agent” of the Federal Reserve who the U.S. government authorized to stimulate the economy with cash injections. Between February 2006 and February 2007, 31 investors mailed or electronically transferred more than $7.4 million to the defendant, who allegedly spent the money on Haralson County real estate, vehicles, jewelry, fur coats, art, gambling trips to Las Vegas, and family cruises to Alaska, Hawaii and the Mediterranean. The defendant allegedly never invested any money, though he did make nominal payments to a few investors who persisted in asking to see their returns. The indictment includes charges of mail fraud, wire fraud, and money laundering. Source: http://www.bizjournals.com/atlanta/stories/2009/05/11/daily61.html


Information Technology


9. May 15, New York Daily News – (International) NYPD breaks up identity theft ring in which 6,000 victims’ credit wrecked, banks bilked out of $15M. The New York City Police Department has crushed a sophisticated identity theft ring that wrecked the credit of 6,000 victims and bilked banks out of $15 million in bogus charges. The scam, which stretched from New York to Nigeria, is one of the largest operations of its kind dismantled by the NYPD, the police commissioner said on May 14. The thieves somehow managed to get their hands on thousands of credit cards legitimately issued in the victims’ names, but intercepted them before they arrived at the proper destination. They then called the credit card companies, using a legal device called a SpoofCard to disguise their voice and phone number, to activate the credit cards. Once the companies fell for the ruse, the suspects used the cards for cash advances or to buy luxury items in Japan, Saudi Arabia and Dubai. In some cases, they even paid to boost the card’s line of credit so they could go back for more cash. Once every penny was spent, the thieves recycled them as backup identification to open new credit accounts. The scam was discovered nearly two years ago when a Queens Realtor opened a package meant for one of his employees and found 60 credit cards, the type “normally issued in anticipation of a customer’s card expiring,” the police commissioner said. The NYPD traced those cards around the globe. During a 21-month investigation, cops used 80 phone taps to eavesdrop on more than 1 million calls, said the deputy chief, head of the special investigations division. Thirty-five suspects, mostly Nigerian immigrants in the city, were arrested and face charges of enterprise corruption, larceny and conspiracy. Source: http://www.nydailynews.com/news/ny_crime/2009/05/15/2009-05-15_nypd_breaks_up_identity_theft_ring_in_which_6000_victims_credit_wrecked_banks_bi.html


10. May 14, Bloomberg – (National) Regulators seek trace-like reporting for derivatives. U.S. regulators may impose the same price reporting and transparency requirements on over-the-counter derivatives that reduced bank profits by almost half in the corporate bond market when the Trace system was adopted seven years ago. “I think it is something we will look at very closely as a potential model,” the Securities and Exchange Chairwoman said on May 13 at a news conference in Washington, in which regulators laid out potential structural changes to improve policing of the $684 trillion OTC derivatives market. Trace, the bond-price reporting system of the Financial Industry Regulatory Authority, gives anyone with an Internet connection access to trading data for corporate bonds. The system, in full operation since February 2005, reduced the difference in prices that banks charge to buy and sell bonds by almost half. The Treasury Secretary, the chairwoman and the acting chairman of the Commodity Futures Trading Commission, called for increased oversight of over-the-counter derivatives to reduce risk to the financial system. Lax regulation contributed to the failures last year of Lehman Brothers Holdings Inc. and American International Group Inc., leading to the seizure of credit markets and causing more than $1.4 trillion in writedowns amid the worst financial crisis since the Great Depression. Source: http://www.bloomberg.com/apps/news?pid=20601103&sid=a.e5Xpc90Q0Q&refer=news


11. May 14, Reuters – (National) SEC proposes tougher investment adviser rules. U.S. securities regulators proposed tougher rules designed to ensure that investment advisers are more accountable for their client’s assets in the wake of massive fraud. The Securities and Exchange Commission voted 5-0 on May 14 to propose that investment advisers who hold their client’s assets undergo a surprise exam once a year to make sure those assets exist. In most cases, investment advisers do not physically control their clients’ assets, and those assets are maintained with a broker-dealer or bank, also known as a qualified custodian. But the investment advisers who have “custody” of their customer’s assets either physically control or have the authority to withdraw their clients’ funds. The proposal is open for public comment and needs to be formally adopted before it becomes a rule. Source: http://www.theusdaily.com/articles/viewarticle.jsp?id=745981&type=Business


12. May 13, Atlanta Business Chronicle – (Georgia) Bremen man indicted for $7M in fraud. A 43-year-old defendant was indicted on May 13 by a federal grand jury on charges of mail fraud, wire fraud, and money laundering in connection with an alleged $7 million fraud scheme. “In this latest chapter in the long book of investment fraud schemes, a man who lives in a small town in west Georgia allegedly persuaded investors from around the country that with his secret government contacts and other plans, he could make their money multiply into millions,” said a U.S. Attorney. “He will now be prosecuted in open court, where he is alleged to actually be just a thief who used lies to steal millions from his victims.” According to the U.S. Attorney, the charges and other information presented in court, starting in early 2006, the defendant allegedly promised investors that they would receive returns of between 40 percent and 150 percent on the money they placed in his “high yield” investment programs. The defendant claimed to own a bank, to have access to confidential and lucrative investment opportunities, or to be a “special agent” of the Federal Reserve who the U.S. government authorized to stimulate the economy with cash injections. Between February 2006 and February 2007, 31 investors mailed or electronically transferred more than $7.4 million to the defendant, who allegedly spent the money on Haralson County real estate, vehicles, jewelry, fur coats, art, gambling trips to Las Vegas, and family cruises to Alaska, Hawaii and the Mediterranean. The defendant allegedly never invested any money, though he did make nominal payments to a few investors who persisted in asking to see their returns. The indictment includes charges of mail fraud, wire fraud, and money laundering. Source: http://www.bizjournals.com/atlanta/stories/2009/05/11/daily61.html


Communications Sector

39. May 15, Bangor Daily News – (Maine) 60 mph winds cut power across state. Strong winds on May 14 knocked out power to thousands of Mainers as gusts topping 60 mph brought down utility poles, trees, and limbs throughout the state. The blustery weather also was blamed for the loss of telephone service in some locations, including the Penobscot County Courthouse, which houses the county’s administrative offices, the Sheriff’s Department, the District Attorney’s Office, the county jail, Superior Court and the Penobscot Regional Communications Center, among other things. Despite the problem with the county’s business lines, which were still down late on May 14, 911 emergency services were not affected and continued to operate throughout the day, according to a news release sent to area media outlets. A Central Maine Power spokeswoman said wind-related power outages affected as many as 5,500 customers during its peak between 12:30 and 1 p.m. Bangor Hydro-Electric Co. customers also lost power, with a total of nearly 4,500 as of 4:30 p.m., a company spokeswoman said. Source: http://www.bangordailynews.com/detail/106082.html


40. May 14, Courier-Life Publications – (New York) New effort to rein in cell phone towers. New York City representatives have taken their first step toward curbing the proliferation of cell phone towers in the city’s residential areas. A New York City Council member was a prime cosponsor of legislation which would require companies that apply to the city’s Department of Buildings to install cell phone equipment on city buildings to send written notice to the community board and council member who represent the location prior to applying for the necessary permits. In addition, the legislation — which was introduced earlier this month — would require communications companies to attach identifying tags to their equipment, containing the permit number and a phone number to call in case there is any concern about the installation. It would also mandate the companies to make a good faith effort to locate their antennae and other equipment in nonresidential areas. Community notification is an important first step in controlling the placement of the antennae, said the City Council. Source: http://www.yournabe.com/articles/2009/05/14/brooklyn_graphic/news/brooklyn_graphic_newsajdjiyc05132009.txt