Thursday, April 21, 2011

Complete DHS Daily Report for April 21, 2011

Daily Report

Top Stories

 Residents of 255 homes were evacuated, and schools were closed April 20 in Monument, Colorado, after a train tanker overturned and leaked hydrochloric acid, Associated Press reports. (See item 5)

5. April 20, Associated Press – (Colorado) Monument, Colo., acid spill from train is plugged. Authorities in Monument, Colorado, say they have stopped a train tanker from leaking hydrochloric acid by placing a magnetic patch on it, Associated Press reported April 20. Residents of 255 homes were evacuated and schools were closed April 20 because of the leak. More evacuations had been planned but are no longer expected because winds have been calm, minimizing the danger of fumes spreading. Crews plan to transfer the acid to another tanker in the afternoon. Evacuees were told to take supplies for 48 hours, in case that takes longer than expected. The tanker can hold about 25,000 gallons but it is not known how much acid leaked since the problem was spotted around 1 a.m. Burlington Northern Santa Fe said it had been leaking about a cup of acid per minute. Source:;_ylt=AlGINxtQTLZtBjuOR4osD9Ks0NUE;_ylu=X3oDMTNwMnFuYjJ0BGFzc2V0A2FwLzIwMTEwNDIwL3VzX2NvbG9yYWRvX2FjaWRfbGVhawRjY29kZQNtb3N0cG9wdWxhcgRjcG9zAzcEcG9zAzQEcHQDaG9tZV9jb2tHNlYwN5bl9oZWFkbGluZV9saXN0BHNsawNhY2l

 CNNMoney reports the IRS identified 335,341 tax returns claiming $1.9 billion in fraudulent refunds as of March 4, 2011, according to the findings of an audit conducted by the Treasury Inspector General for Tax Administration, which is a 181 percent increase from the same period in 2010. See item 22 below in the Banking and Finance Sector


Banking and Finance Sector

17. April 20, CNN – (National) Businessman found guilty in $2.9 billion fraud. A businessman described as ―one of the faces of the financial crisis‖ was found guilty April 19 on all 14 felony counts against him by a jury in Alexandria, Virginia. The Assistant Attorney General (AG) called the verdict against the former the former chairman of Taylor, Bean, and Whitaker (TBW) who was accused in a nearly $3 billion fraud, ―a major victory.‖ The former CEO ―masterminded one of the largest bank fraud schemes in history,‖ said the Assistant AG. The jury found the man guilty of multiple counts of bank, wire, and securities fraud. He will be sentenced July 1, and the Assistant AG predicted he will serve ―decades‖ in prison. Witnesses at the trial described to the jury how TBW and Colonial executives perpetrated the massive fraud that brought down the once powerful Colonial BancGroup. The scheme began in 2002, according to a Justice Department statement, ―when [the former CEO] and his co-conspirators ran overdrafts in TBW bank accounts at Colonial Bank in order to cover TBW‘s cash shortfalls.‖ Six other people have already pleaded guilty for their roles in the fraud scheme, the Justice Department said. Source:

18. April 19, Denver Post – (National) ‘Ho-Hum bandit’ suspect arrested in Denver. The FBI in Denver, Colorado, apprehended a California man April 18, who is suspected of being the laid-back serial bank robber known as the Ho-Hum Bandit. Details of his arrest were not available, but an FBI spokesman confirmed that a 34-year-old man from Corte Madera in Marin County, California, was picked up April 18 in Denver. Public records show no permanent address or previous arrests for the man in Colorado. The Ho Hum Bandit turned up in Colorado earlier in 2011, after hitting an Edgewater bank in March. Authorities said he asked for money from a teller at the Chase Bank branch at 1705 Sheridan Blvd. March 17. The robber with the calm demeanor has also robbed more than a dozen banks in San Diego and Los Angeles, California; Cheyenne, Wyoming; and Seattle, Washington, before moving on to Colorado. Banks in Southern California pooled together a $15,000 reward in 2010. Source:

19. April 19, Federal Bureau of Investigation – (Michigan) Investment adviser pleads guilty to bank and wire fraud charges. A 43-year-old Michigan man pleaded guilty April 19 to five counts of bank and wire fraud, a U.S. Attorney announced. According to court documents, the man was an investment adviser to various municipalities, credit unions, school districts, and trade unions through his Southfield-based companies MuniVest Financial Group and MuniVest Services LLC. From August 2007 to September 2010, he used the MuniVest entities to operate a bank and wire fraud Ponzi scheme. He falsely promised investor clients that he would invest their funds in various certificates of deposit. He did not invest their funds as promised, but instead, used their funds to purchase personal items and real property, to gamble, to make payments to other investors in the same scheme, and to make loans to several individuals and a local jewelry store. He stipulated that the loss caused by his fraud exceeds $7 million, and that he abused a position of trust in his fiduciary capacity as an investment adviser. Source:

20. April 19, DNAinfo – (New York) Suspected bank robber caught after cops spot mustache, report says. A bank robber who failed to rip off the same Chelsea, New York, location on two occasions was nabbed in Greenwich Village in New York City April 16 after cops noticed his infamous facial hair, according to the New York Post. Police first circulated the mustachioed mug shot of the suspect April 6, after he allegedly demanded cash from a teller at the Chase Bank on Eighth Avenue and West 15th Street, and then fled on foot empty-handed. Less then a week later, police reported that the man had struck twice more, once again failing to rob the Eighth Avenue branch before finally managing to pocket some cash at a Chase location on Third Avenue, between East 19th and East 20th streets, in Gramercy. The suspect was spotted at Washington Square Park near Thompson Street by police who had been monitoring a nearby surveillance camera April 16, the Post reported. A police source told the paper that the cops made the find after noticing the man‘s ―Hitler-like mustache.‖ The suspect‘s alleged robbery spree is believed to have included two more banks, with the once struggling bank robber managing to capture nearly $10,000, according to the Post. Source:

21. April 19, South Florida Business Journal – (Florida) Real estate agent pleads guilty in mortgage fraud. A Miami-Dade County, Florida, real estate agent has pleaded guilty to a count of conspiracy to commit money laundering in connection to a fraudulent mortgage scheme, the U.S. Attorney‘s Office said, South Florida Business Journal reported April 19. According to court records, between July 9, 2004, and August 7, 2007, the man and his co-conspirators were involved in a scheme to obtain fraudulent mortgage loans for the purchase of at least five residential properties in Miami Beach. The man and his co-conspirators recruited and paid straw buyers, including some who were family members, to pose as purchasers of the properties. Court records also show that the man and his co-conspirators prepared fraudulent mortgage applications on behalf of the straw buyers. The man and his co-conspirators would arrange for fraudulent mortgage loan proceeds to be disbursed to one of his bank accounts. Eventually, the man and his co-conspirators defaulted on the loan payments, causing the properties to go into foreclosure. The man acknowledged that the loss resulting from his actions is more than $2.5 million, but less than $7 million. The man, faces up to 30 years in prison, followed by up to 5 years of supervised release. Source:

22. April 19, CNNMoney – (National) Fraudulent tax returns surge 181%. The number of taxpayers trying to cheat the IRS and collect bigger refunds has shot up for the 2011 filing season. The IRS identified 335,341 tax returns claiming $1.9 billion in fraudulent refunds as of March 4, 2011, according to the findings of an audit conducted by the Treasury Inspector General for Tax Administration (TIGTA). That is a 181 percent increase from the same period in 2010. While the IRS has become more effective in its screening process, a weak economy has also driven more people to cut corners, said an assistant academic specialist of Accounting at Northeastern University. Many taxpayers tried to boost their refunds or reduce their tax liability by claiming deductions and credits they did not qualify for, TIGTA found. Another reason for the huge increase is ramped up enforcement efforts on the part of the IRS. The IRS is also getting more efficient at reviewing tax returns and identifying errors or false information, due to the increase in electronic filing. The number of e-filed returns surged to a record high in 2011, topping 100 million for the first time in history — a nearly 9 percent increase from 2010, according to the IRS. When taxpayers file their taxes electronically, it is much easier for the IRS to analyze them, said the Northeastern University assistant academic specialist. Not all of the so-called ―fraudulent‖ returns are a result of taxpayers trying to scam the system, he said. Many taxpayers were in such a pinch financially in 2010 that they were less likely to hire a professional to prepare their taxes — often resulting in more incorrect claims, outdated deductions, and other common errors. Source:

Information Technology

46. April 20, Softpedia – (International) Ashampoo hit by data breach. German software developer Ashampoo has notified its customers about a data breach incident that resulted in the exposure of their names and e-mail addresses. According to an announcement posted on the company‘s Web site, unidentified hackers broke through its security systems and gained unauthorized access to a server. ―We discovered the break-in and interrupted it instantly. The security gap through which the hackers gained access was closed immediately,‖ said Ashampoo‘s CEO. ―At the same time we reported this incident to the police. Further investigations are underway. Unfortunately, the traces of the well-concealed hackers currently disperse abroad,‖ he added. The hackers did not obtain access to billing information as this data is not stored on the company‘s servers. In addition to its software development business, which includes anti-malware, firewall, and data encryption products, the Ashampoo Group offers a diverse range of services through subsidiaries. Ashampoo did not disclose how many individuals were affected by the breach, but since the company claims to have has over 13.8 million customers, the number may be very large. The company warned customers about targeted attacks that might result from this incident. Source:

47. April 19, Softpedia – (International) Facebook begins rolling out two-factor authentication. Facebook has announced a series of safety and security changes which include a new two-factor authentication system and improvements to its HTTPS support. Multi-factor authentication systems combine traditional passwords with additional identification methods, such as one-time-use codes or digital keys. ―If you turn this new feature on, we‘ll ask you to enter a code anytime you try to log into Facebook from a new device. This additional security helps confirm that it‘s really you trying to log in,‖ announced a director of engineering at Facebook. Facebook also improved its HTTPS implementation, which due to the large amount of external content loaded into the Web site, was impractical for users. The improvement is that users browsing Facebook over HTTPS will now be offered the option to only temporarily switch back to HTTP when attempting to use applications that do not support such secure connections. Source:

48. April 19, Computerworld – (International) Microsoft kicks off third-party bug warnings with two for Chrome. Microsoft released a pair of security advisories for Google‘s Chrome browser April 19. One of the advisories also identified a vulnerability in Opera. The change is part of an expansion of the vulnerability disclosure policy Microsoft launched last summer, said the director of the Microsoft Security Response Center (MSRC). The bugs were discovered by Microsoft researchers, and reported to the security teams responsible for Chrome and Opera. Google patched the two Chrome vulnerabilities last September and December; Opera fixed its browser flaw in October. The advisories were the first ever from Microsoft for bugs in third-party products. According to the MSRC director, they will be followed by others, as necessary. ―If we‘re in a situation where we find a vulnerability in some other vendor‘s product, we will release an advisory ourselves,‖ he said. At times, those advisories will appear before the affected vendor has a patch ready for users, he acknowledged. ―If there‘s an attack [ongoing], we‘ll release an advisory, most of the time with workarounds and mitigations, but we will continue to coordinate when we do so,‖ he said. Source:

49. April 15, – (International) Microsoft’s Autorun shutdown fails to halt USB-borne malware. USB devices are still the second biggest vector for malware, despite Microsoft‘s best efforts to close down this avenue for hackers by disabling the Autorun feature in Windows, according to security firm Avast. ―We have seen no decline and I don‘t know why except there are probably a lot of pirated systems out there that didn‘t have automatic updates from Microsoft,‖ the firm‘s senior virus analyst said. He explained that the prevalence of the ‗remove Windows Genuine Advantage‘ program on the Web indicates that there are still a substantial number of piracy issues for Microsoft. Microsoft announced the update in February, limiting how Autorun behaves after realizing how often it was used to propagate malware. The update applies to all Windows releases with the exception of Windows 7 and Windows Server 2008 R2. The Avast analyst also explained the frustrations that Avast‘s security team has had in trying to co-operate with ad networks in order to stamp out so-called ‗malvertising‘. ―We don‘t really know how they work. We‘ve had many discussions with the ad companies but they‘ve not been able to explain why they allow such content,‖ he said. Source:

Communications Sector

50. April 19, KPHO 5 Phoenix – (Arizona; Colorado; New Mexico) Phone company suffers, restores severe outage. Telephone customers in Arizona, Colorado, and New Mexico were the victims of a mysterious service disruption when they found themselves without land lines April 19. The spokesman for telephone giant Century Link, which recently merged with Qwest Communications, told KPHO he could not say how many people were affected in the outage. He said the outage did not affect 911 calls. He said some, but not all residential customers in the three states were experiencing the problem, and that the company had no idea what caused it. He said the outage has discovered between 8:30 p.m. and 8:45 p.m. local time. Shortly after 11:00 p.m., the spokesman called KPHO to report that all services had been restored. ―It was a database failure,‖ he said, although he could not specify the nature of that failure. He said technicians will investigate the outage April 20. Source:

51. April 19, Honolulu Star Advertiser – (Hawaii) Oceanic restores service to 5,000 homes in Kailua and Kaneohe. Oceanic Time Warner Cable restored cable TV, Internet, and landline telephone service to 5,000 homes and businesses in Kailua and Kaneohe, Hawaii, April 19. Service had been disrupted since April 19 after the company‘s cables were severed during the removal of a telephone pole following a vehicle accident April 18. The vice president of marketing for Oceanic said April 19 that a full crew from Oceanic was sent out to repair the cables once the company was notified they were damaged during the removal of the telephone pole. Source: