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Report says California targeted by cyber-gangs

By Don Thompson

SACRAMENTO, Calif. (AP) - International criminal enterprises follow the money, and a report being released Thursday says they are increasingly focusing on California because of its wealth and innovation.

Aside from long-time trafficking in drugs, guns and people, the report by California Attorney General Kamala Harris says criminals are turning to cybercrime to target businesses and financial institutions.

It calls California the top target in the U.S. for organizations that often operate from safe havens in Eastern Europe, Africa and China.

"California is a global leader on a number of fronts and, unfortunately, transnational criminal activity is one of them," the report states.

Harris said it is the first comprehensive report to outline the effects international criminal organizations are having on Californians and businesses in the state. She is set to formally release the 181-page report during a late-morning news conference with other law enforcement officials in Los Angeles, but an early copy was provided to The Associated Press.

California leads all states in the number of computer systems hacked or infected by malware, the number of victims of Internet crimes, the amount of financial losses suffered as a result and the number of victims of identity fraud. The report says the state also is particularly vulnerable to thefts of intellectual property because of its leading role in developing new technologies and mass-media entertainment.

"Not surprisingly, transnational organized crime has tapped into this new criminal frontier," the report says. "Many of these breaches have been tied to transnational criminal organizations operating from Russia, Ukraine, Romania, Israel, Egypt, China, and Nigeria, among other places."

California's gross domestic product of $2 trillion, significant foreign trade activity and border with Mexico also makes the state an easy target for international money-laundering schemes, the report says. It estimates that more than $30 billion is laundered through California's economy each year.

Some is filtered through legitimate businesses or by using virtual currencies such as Bitcoin. But the report says backpacks and duffel bags stuffed with cash have been seized more frequently since Mexico began toughening its money-laundering laws in 2010.

Seizures of bulk cash increased 40 percent by 2011 in California, which now leads the nation in the number of currency seizures.

California should alter state law to make it easier for prosecutors to crack down on money laundering, the report says. Unlike federal law, state law currently requires prosecutors to prove that a suspect deliberately carried out a financial transaction in a way designed to hide the fact that the money came from or was used for a criminal activity.

The report also recommends that the Legislature change state law to let prosecutors temporarily freeze the assets of transnational criminal organizations and associated gangs before they seek an indictment.

It also calls for the state to devote more money to the state Department of Justice, which Harris leads. That would include $7.5 million to fund five new teams that would target international criminals.

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endmillll March 20 2014 at 10:51 AM

Why cant they try taking them drug lords money in mexico.

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dbn3 March 20 2014 at 10:52 AM

Now that explains why Jesse Jackson is shaking down silicon valley, all the crooks are out looking for their big score.

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petert8869 March 20 2014 at 10:59 AM

They need to investigate why they allow JP Morgan Chase allows criminals to open up accounts under business identities and names where addresses are not being validated and allowing folks to be defrauded and nobody finds it bizarrre at the Bank why are opened then closed within weeks where are moving in and out, then accounts closed with complaints following but they turn a blind eye once informed of the act....Information provided below of all filings related to my situation with my dealings with JP morgan Chase of Beverly Hills California.
Crime committed: False Pretense\Swindle\Confidence Game report filed under Memphis Police Report number 1306010705ME
Money wired and identified for purchase of a said VIN # of bike from Nieman Arias supposedly under Euphoricauto business venture( also posted on ebay under seller ID: megacycles00). They even produced copy of bogus title showing them as owner of bike at same phoney address) but no such business existed. Monies actually ended up going into account of a Millennium Towing within JPMorgan/chase business account as Nieman Arias as one of the signers. Wire payment to a Nieman Arias account number 2995145675 through J P Morgan under TRN number 20130517-00006789. The wire left Regions Bank at 13:25:26. going to the Federal Reserve Bank under reference, FED IMAD number is 0517F2QCZ00C002082.
On 05-28-2013 we received a message from JP Morgan their case number JPM130521-003843 advising the beneficiary's account was closed.
In this day in age how does this happen where NO FEDERAL AGENCY IS CONCERNED (FBI, Home Land Security, Secret Service or otherwise) where frauds are being run through Federal Banks and everyone turning a blind eye even once reported with documenation that clearly shows the fraud was committed. Chime in if its happened to you for it appears to be a huge problem with our banking institutions.

Flag Reply +3 rate up
Escalonz March 20 2014 at 10:31 AM

cybercrime to target businesses and financial institutions.................I do absolutely no business or any financial dealings on the internet; way too risky...............

Flag Reply +3 rate up
infoear March 20 2014 at 11:13 AM

I guess we have to go back to paper money !

Flag Reply +5 rate up
1 reply
donpantanella infoear March 20 2014 at 12:19 PM

what is this "paper money" that you speak of?

Flag Reply 0 rate up
GUISEPPE DOTZABO March 20 2014 at 11:14 AM

Technology is our biggest problem,do the benifits of technology outway the bad things???

Flag Reply +3 rate up
1 reply
Franco GUISEPPE DOTZABO March 20 2014 at 11:32 AM

Giuseppe, just like the invention of the car? More people got killed with cars in this country than all the wars we fought, including our civil war!

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2 replies
Mike Franco March 20 2014 at 11:40 AM

Maybe they should put governors on all the cars. Make them all have breathalyzers. We do have the technology.
Speed and alcohol are the main causes. We can control both of them easily enough.

Flag +2 rate up
CHUCK Franco March 20 2014 at 11:56 AM

what is your point? Cars don't hack your accounts and steal billions.

Flag +2 rate up
Mike March 20 2014 at 11:36 AM

It is a war. The Russians and the Chinese governments look the other way on these crimes because it brings money into their economies. Billions.

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mbrheljr March 20 2014 at 9:28 AM

Those who hack for profit or to merely damage others should face DRACONIAN penalties.

At a MINIMUM, those convicted should face life sentences in prison.

And, when I say life, as a minimum, I mean until they stop breathing.

Let these cowardly SOBs have to survive, living with REAL criminals...

Flag Reply +4 rate up
2 replies
len5 mbrheljr March 20 2014 at 9:49 AM

Spot on.These cowards wreak havoc on unsuspecting people.Some people are ruined by their actions become despondent.Perhaps the U.S. should have a unit who could slip into countries harboring these vermin and terminate them.

Flag Reply +4 rate up
Eric mbrheljr March 20 2014 at 9:50 AM

This has been my opinion for years. Make the penalty worse than the reward. It won't stop all of them but it'll stop some of them. And those not stopped we simply eliminate from our presence forever.

These people knowingly destroy lives for money. They deserve NO freedom. I'd be fine with execution.

Flag Reply +5 rate up
maswain002 March 20 2014 at 12:53 PM

It seems to me that the best target for cyber crime would be the cyber criminals themselves.
Some sharp Silicone Valley tech-wiz ought to sting them back.
What would the cyber creeps do?
File a complaint?
Turnabout being fair play, and all that.

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3 replies
nogo88 March 20 2014 at 10:43 PM

It sux to be a californian.

Flag Reply +1 rate up
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