Friday, July 22, 2011

Complete DHS Daily Report for July 22, 2011

Daily Report

Top Stories

• Wells Fargo & Co agreed to pay an $85 million penalty to the Federal Reserve Board for steering borrowers into costly subprime mortgages, the largest fine the board's ever imposed in a consumer-enforcement case, Reuters reports. (See item 16)

16. July 20, Reuters – (National) Fed hits Wells Fargo with $85 million mortgage penalty. Wells Fargo & Co agreed July 20 to pay an $85 million civil penalty to the Federal Reserve Board (Fed) for allegedly steering borrowers into costly subprime mortgages, the largest fine the Fed's ever imposed in a consumer-enforcement case. San Francisco-based Wells Fargo will also compensate borrowers in connection with sales practices at a Wells subsidiary, according to a cease and desist order issued by the Fed July 20. Those costs have a potential to reach $200 million. Wells Fargo did not admit any wrongdoing in agreeing to the cease and desist order. It might have to pay between $1,000 and $20,000 in restitution to borrowers affected by the alleged faulty mortgage practices, the order said. The number of borrowers who may be compensated is between 3,700 and more than 10,000, meaning the potential exposure could reach $200 million. The cease and desist order also addresses allegations Wells Fargo sales personnel falsified data to make it appear that borrowers qualified for loans, when they would not have qualified based on actual incomes. The company terminated the individuals involved, and closed its Wells Fargo Financial division in July 2010. Wells is also required to modify its compensation and performance management programs for sales personnel in mortgage lending, to make them consistent with the company's overall practices. Those performance incentives should encourage sales staff to fully implement anti-fraud measures, the order said. The Fed said it has issued orders against 16 former Wells Fargo Financial sales personnel barring them from working in the banking industry. Source: http://www.reuters.com/article/2011/07/20/us-wellsfargo-settlement-idUSTRE76J6KI20110720

• Charges have been filed against three workers for their involvement in the water contamination scare that caused a 3-day, town-wide ban against drinking water in Somerset, Massachusetts, according to the Fall River Herald News. (See item 32)

32. July 20, Fall River Herald News – (Massachusetts) 3 arrested in connection to Somerset's contaminated water scare. Charges have been filed against three workers for their involvement in the water contamination scare that caused a 3-day town-wide ban against drinking water in Somerset, Massachusetts in early June. Two employees of Hydrograss Technologies, a subcontractor for the Veterans Memorial Bridge project, will be charged with wanton destruction of property, conspiracy, and unlicensed connection to a distribution system. A worker for contractor Cianbro will be charged with interfering with metering of water, unlicensed connection to a distribution system, and larceny of less than $250. Somerset police filed the charges in district court in Fall River July 20. An investigation showed an employee for Cianbro granted permission to Hydrograss Technologies to connect to a hydrant on Brayton Avenue May 31 for water after a water delivery apparently fell through, according to Somerset police. Workers were not given permission to tap into the town’s water system. Contamination worries stemmed from a failure to attach a back-flow preventer or meter between the workers’ equipment and the hydrant, police said. Because the equipment was not used properly, an unknown amount of hydroseed material entered the town’s water system. The town immediately told residents and businesses they couldn’t use the water for drinking, washing dishes or preparing food. The ban lasted roughly 3 days. More than 1 million gallons of water were flushed to get rid of the material. No one was known to have gotten sick. Source: http://www.heraldnews.com/news/x1009564725/3-arrested-in-connection-to-Somersets-contaminated-water-scare

Details

Banking and Finance Sector

14. July 21, Detroit News – (Michigan) Pair arrested in Sterling Heights heist that netted bathtub full of cash. An armored truck heist in Sterling Heights, Michigan, in July was an inside job and the alleged thieves pocketed $315,000 that they spent on muscle cars and jewelry, with enough left over to fill a bathtub, according to court records. An armored truck employee, who investigators said was the heist's mastermind, was charged July 20 in U.S. district court in Detroit, a day after the arrest of the accused getaway driver. So far, investigators have recovered more than $150,000. The men were arrested July 19 when agents found them sitting in the driver's seats of separate Dodge Chargers purchased with the bank loot. The FBI said a 21-year-old Highland Park man planned the heist. He worked as a driver for Total Armored Car Service. The armored vehicle was robbed July 8 near the Michigan Department of Treasury Building in the 41000 block of Dequindre. Police said a guard from the two-man security team went inside to make a pickup, and two men entered the rear of the vehicle and put a gun to the driver's head and forced him outside. No one was hurt. The mastermind of the robbery was hired May 3 as an armed truck driver, according to the company's vice president. An informant said the man bragged about the robbery by displaying a cellphone photo of a bathtub filled with cash. When he was arrested, agents found $8,500 in his pocket, some of which was still bound with the bank's wrappers. Inside his apartment, investigators found about $150,000 inside a safe hidden in a closet. The cash was still wrapped. Investigators also found a handgun, and 12-gauge shotgun. Source: http://www.detnews.com/article/20110721/METRO/107210393/Pair-arrested-in-Sterling-Heights-heist-that-netted-bathtub-full-of-cash

15. July 21, KSDK 5 St. Louis – (Texas) 'Handsome guy bandit' hits sixth bank. Police in north Texas are searching for a serial bank robber who's held up six banks in four cities in 4 months. Even with substantial video and pictures of the suspect, some of the best minds in law enforcement still have no clue who he is. They're calling him the "Handsome Guy Bandit". He's named for his disguise, the Handsome Guy mask, an $800 special effects mask that looks, moves and feels like real skin. The torso part of the mask conceals his true size. He can change the look from business to casual, glasses to sunglasses. The disguise has worked at six banks. "Well it's certainly escalated the crime from where it was just a note passing before to now you know he is armed. He's obviously had success with it so more than likely he's going to continue with it," said a spokesman from the Richland, Texas Police Department. Source: http://www.ksdk.com/news/article/267968/28/Handsome-guy-bandit-hits-sixth-bank

16. July 20, Reuters – (National) Fed hits Wells Fargo with $85 million mortgage penalty. Wells Fargo & Co agreed July 20 to pay an $85 million civil penalty to the Federal Reserve Board (Fed) for allegedly steering borrowers into costly subprime mortgages, the largest fine the Fed's ever imposed in a consumer-enforcement case. San Francisco-based Wells Fargo will also compensate borrowers in connection with sales practices at a Wells subsidiary, according to a cease and desist order issued by the Fed July 20. Those costs have a potential to reach $200 million. Wells Fargo did not admit any wrongdoing in agreeing to the cease and desist order. It might have to pay between $1,000 and $20,000 in restitution to borrowers affected by the alleged faulty mortgage practices, the order said. The number of borrowers who may be compensated is between 3,700 and more than 10,000, meaning the potential exposure could reach $200 million. The cease and desist order also addresses allegations Wells Fargo sales personnel falsified data to make it appear that borrowers qualified for loans, when they would not have qualified based on actual incomes. The company terminated the individuals involved, and closed its Wells Fargo Financial division in July 2010. Wells is also required to modify its compensation and performance management programs for sales personnel in mortgage lending, to make them consistent with the company's overall practices. Those performance incentives should encourage sales staff to fully implement anti-fraud measures, the order said. The Fed said it has issued orders against 16 former Wells Fargo Financial sales personnel barring them from working in the banking industry. Source: http://www.reuters.com/article/2011/07/20/us-wellsfargo-settlement-idUSTRE76J6KI20110720

17. July 20, Minneapolis Star Tribune – (National) Radio host gets charged in Ponzi scheme. A conservative radio show host claims he was just reading from a script when he told his worldwide radio audience in weekly broadcasts he was a senior financial adviser and they could avoid financial Armageddon by entrusting him and his business partners with their money. However in an indictment unsealed July 20, the host was portrayed as an integral figure in a $194 million Ponzi scheme that defrauded more than 700 investors. The host's program, "Follow the Money," was carried on more than 200 stations nationwide, including on the Worldwide Christian Radio network. He insists he believed in the currency investment program he promoted for the mastermind of the scheme, his longtime friend and Minneapolis money manager who was sentenced last August to 25 years on fraud and tax evasion charges. But a grand jury charged the host and two of the money manager's key associates with conspiracy, mail fraud, and money laundering counts. The radio host invited listeners to call him to learn how they could protect their money. Hundreds did, and he spent hours with them on the phone, telling them he was a senior economist and a financial adviser as well as engendering sympathy by falsely telling some investors his wife had been killed in an accident involving a drunken driver. He said in an earlier interview that the money manager prepared the scripts and that he had no choice but to go along. He initially solicited investors for a firm the money manager started called Universal Brokerage Services. The money manager and his associates had been equal partners in a separate Minneapolis firm called Oxford Global Advisors. The two firms spun off a confusing plethora of related entities with either Oxford, Universal Brokerage or UBS in their names. The indictment charges the radio host and two associates with conspiracy, 11 counts of mail and wire fraud, and six counts of money laundering. Source: http://www.startribune.com/business/125914273.html

18. July 20, Sacramento Bee – (California) Sacramento real estate professionals charged with $4 million mortgage fraud. Seven Sacramento, California-area real estate professionals with ties to Delta Homes and Lending, Inc. were charged July 14 with committing mortgage fraud with losses totaling $4 million, according to an indictment unsealed July 19. Between October 2004 and May 2007, the defendants allegedly provided mortgage lenders with false and fraudulent loan applications on behalf of their clients, falsely representing the borrowers' assets, income, liabilities, debts, employment statuses, and citizenship statuses. The seven also allegedly provided money to their clients to inflate the appearance of their assets, and bank account balances. The borrowers then reportedly returned the money after a mortgage loan was secured. The case was extensively investigated by the FBI. The agency found that aggregate sales prices of the homes involved in the conspiracy exceeds $10 million. If the defendants are convicted, they could face a statutory penalty of 30 years in prison, and a $1 million fine. Source: http://blogs.sacbee.com/crime/archives/2011/07/sacramento-real.html

Information Technology Sector

40. July 21, Softpedia – (International) Millions of computers infected with click fraud trojan found by Google. Google claims the owners of hundreds of thousands of computers infected with a click-fraud trojan were helped by the malware warning it started displaying on its Web site. The company offered several other details about the trojan that led to the unprecedented decision to alert users via its Web site: "The malware appears to have gotten onto users' computers from one of roughly a hundred variants of fake antivirus software that has been in circulation for a while," Google said. The company noted it is unaware of a common name for the trojan discovered by its engineers while investigating unusual search traffic, indicating the malware is not widely detected yet, and is only picked up by generic signatures. The trojan is relatively widespread, with Google claiming "a couple million machines are affected by this malware", and that hundreds of thousands of users have already been warned. Source: http://news.softpedia.com/news/Millions-of-Computers-Infected-with-Click-Fraud-Trojan-Found-by-Google-212647.shtml

41. July 21, IDG News Service – (International) Google fixes flaw that scrubbed Websites from search index. Google disabled a feature that could allow people to remove Web sites from its search index following a problematic discovery by an observer. An operations director at UK Web Media wrote on his blog he was using Google's Web master tools, used for maintaining Web sites, and found he could delete any Web site from Google's search index by manipulating the URL (Uniform Resource Locator). A site address must be included in Google's index for the search company's engine to include that site in any relevant search results. The researcher said he was deleting "thousands" of sites from the index when he accidentally deleted one that he had no relation to. Google fixed the flaw within 7 hours, and sites that should not have been removed should be back in the search index, the researcher wrote. Google officials in London confirmed the fix July 21. Source: http://www.computerworld.com/s/article/9218561/Google_fixes_flaw_that_scrubbed_websites_from_search_index

42. July 20, Computerworld – (International) Apple patches 58 Safari bugs to deflect drive-by attacks. Apple updated Safari to version 5.1 July 20, patching 58 security vulnerabilities and adding several new features, including sandboxing on Mac OS X 10.7. Safari 5.1 is the browser bundled with Lion, a new OS released by Apple July 20, but it will also run on Mac OS X 10.6, aka Snow Leopard. A separate Safari update to version 5.0.6 was also issued July 20 for users running Mac OS X 10.5, or Leopard. The update patched 58 flaws in Safari, 14 specific to the Windows edition, 1 that affected only the Mac version, and 44 that impact both platforms. Forty-seven of the 58 were accompanied by Apple's "arbitrary code execution" phrasing, indicating the company considered them critical. The bulk of the bugs patched — 43 of the 58 — were in WebKit, the open-source browser engine that powers Safari and also Google's Chrome. Most of those were memory flaws. "Multiple memory corruption issues existed in WebKit," said Apple in the security advisory that accompanied the Safari 5.1 update. "Visiting a maliciously-crafted website may lead to an unexpected application termination or arbitrary code execution." Apple's description means the vulnerabilities could be exploited via "drive-by" attacks that only require cyber criminals to trick victims into visiting a malware-serving URL. Source: http://www.computerworld.com/s/article/9218549/Apple_patches_58_Safari_bugs_to_deflect_drive_by_attacks

Communications Sector

43. July 20, All Access Music Group – (Minnesota) KBHW/International Falls, MN tower collapses after severe storms. Heartland Christian Broadcasters Contemporary Christian KBHW (PSALM 99.5)/International Falls, Minnesota, was operating at reduced power after its 650-foot tower near Loman, Minnesota, collapsed July 17. The station's general manager said that no one witnessed the incident, but said he suspects that severe storms moving through the area at the time may have caused the collapse. The station normally broadcasts with 100kW and was using a temporary low-power transmitter at its studio, All Access Music Group, reported July 20. Some translators which relay KBHW's programming were off the air because they cannot receive KBHW's signal. The general manager said translators on the Iron Range receive their programming from KADU/Hibbing, Minnesota, and were on the air. Source: http://www.allaccess.com/net-news/archive/story/94056/kbhw-international-falls-mn-tower-collapses-after-

44. July 20, WSAZ 3 Huntington/Charleston – (West Virginia) Copper theft causes phone outage in Kanawha County. Crews with Frontier Communications said thieves cut a line outside of Cedar Groves in Kanawha County, West Virginia late July 19 or early July 20, leading to phone service disruptions for many. While the thieves only got a few hundred dollars in scrap metal, Frontier said the damage left behind costs everyone. Frontier officials are cracking down, joining forces with local law enforcement to target criminals who steal copper. Officials with the telephone company are installing security systems, cameras and other devices to help monitor their lines and equipment. Source: http://www.wsaz.com/news/headlines/Phone_Outage_Reported_in_Kanawha_County_125886458.html?ref=458

45. July 20, Northland's NewsCenter – (Minnesota; Wisconsin) Severely damaged 911 systems in Carlton Co. fixed. The damage done to 911 lines in Carlton County, Minnesota was repaired July 20. A Qwest spokeswoman said that a Century Link fiber line was vandalized on I-35 near Lindahl Road causing the problem. Those impacted by the cut included residents of Cloquet, Moose Lake, Barnum, and Carlton. According to the spokeswoman, CenturyLink’s priority was on restoring service. "It was reported that some long distance and Internet service in Cloquet, Moose Lake, Barnum, and Carlton were also affected because of the vandalism," she said. Douglas County residents who experienced phone issues earlier in the day have also had their lines repaired. In Wisconsin, a second, separate, phone outage occurred after a fiber was cut between Dairyland and Danbury when a third party company was digging holes. According to the spokeswoman, the outages were unrelated. Source: http://www.northlandsnewscenter.com/news/local/911-Systems-Severly-Damaged-In-Carlton-Co-125899458.html

46. July 20, KAPP 35 Yakima – (Washington) Qwest outage in Cle Elum. A major outage was reported July 20 affecting Qwest/CenturyLink 911 and residential services in Cle Elum, Washington, and the surrounding area impacting approximately 2,600 customers. Technicians and crews were investigating the cause of this outage and working hard to resolve the problems as quickly as possible. In case of emergency, customers were instructed to drive to the nearest medical facility or fire stations where emergency personnel have been alerted and were standing by. Source: http://www.kapptv.com/article/2011/jul/20/qwest-outage-cle-elum/

47. July 20, Aviation Week – (International) Lightsquared may interfere with Galileo. Europe weighed in on the GPS interference issue in the United States July 19, expressing “deep concerns” about LightSquared’s plans to operate a broadband wireless network using frequencies adjacent to the band allocated to global navigation satellite systems. Europe is developing a satellite navigation system, Galileo. In a letter to the U.S. Federal Communications Commission (FCC), the European Commission (EC) said analysis by the European Space Agency (ESA) shows the potential for LightSquared’s terrestrial transmissions to interfere with Galileo receivers on aircraft operating into the United States. ”This obviously presents a grave threat to the viability of providing a Galileo service covering U.S. territory — a service which many studies have shown will not only benefit Galileo users, but those of GPS too as the two systems will be interoperable,” said the July 19 letter. Europe has developed the Egnos system to increase the accuracy and integrity of GPS. This is interoperable with the U.S. wide-area augmentation system (WAAS). As a result, the EC also is concerned about the effect of interference on the performance of Egnos/WAAS receivers on aircraft entering U.S. airspace. The EC’s letter to the FCC also raises concerns about the impact of interference on the Cospas-Sarsat satellite-based search-and-rescue system, which includes a dedicated space-to-earth link, acting as a return channel for emergency beacons, at frequencies close to LightSquared’s transmissions. The FCC is digesting the results of testing that show LightSquared’s originally planned high-power base stations will cause severe interference with GPS receivers. The EC’s letter requests that Egnos and Galileo receivers “also be taken into account within the FCC’s decision-making process.” Source: http://www.aviationweek.com/aw/generic/story.jsp?id=news/asd/2011/07/20/04.xml&headline=Lightsquared

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