They say history repeats itself… but how many times? Last year, Florida Rep. Sansom got busted for allegedly abusing his AmEx Gold Card to the tune of $170k. Then there’s former House Speaker Marco Rubio and state senator Dean Cannon who allegedly participated in similar schemes using their business credit cards. This year, similar scandals have also been exposed. There’s Florida state GOP Chairman Jim Greer, who resigned in February amid his own financial fiasco which involved alleged credit card abuse. There’s so much alleged fraud, it’s hard to keep track who’s who. However, my favorite of the bunch is Melanie Phister…

At the age of 25, Melanie Phister was just a young junior staffer for the Florida GOP when they gave her a credit card. Allegedly, there were $1.25 million in charges on this card during the two years which followed; things like high end jewelry, a $40k London hotel stay, and even charter jets. Phister’s job supposedly involved work for Rep. Sansom (who was already indicted for his alleged credit card fraud) so I guess the pieces are coming together.

In case you were wondering what cards were involved… from what I can gather it sounds like they were American Express. With that type of high roller spending, I hope AmEx at least offered them an invite for the Centurion

Written April 2011

Alleged debit card fraudster Florin Necula was confronted with some incriminating evidence which was tough to swallow, but he found a way… by literally swallowing it!

The alleged events actually occurred back in January, but they’re just coming to light now, thanks to a recently unsealed search warrant affidavit.

New York City resident Florin Necula and his accomplices are accused of running a card skimming operation involving local ATMs. Allegedly, they rigged the ATMs with credit card readers; when a customer inserted their card, the numbers would be recorded. Necula was apprehended by Secret Service and awaiting integration at their district office. In view was evidence which Necula reportedly had on him at the time of arrest; a USB jump drive. According to court documents, he “grabbed” the jump drive and swallowed it!

After four days, the “evidence” had still not passed through his digestive tract, so doctors at a local hospital “removed the flash drive because they were concerned that Necula would be injured” if they didn’t. It’s unclear whether or not the contents of the drive are still intact since the drive was extracted from the suspect.

But I don’t know what’s dumber… the suspect swallowing the drive or that his defense attorney reportedly said “they didn’t have a right to take it from him” and might file a claim to suppress the evidence.

Written March 2010

As some of you may have heard, earlier this year American Express filed suit against Courtney Love, alleging that she has an unpaid credit card balance of over $350,000 (with that amount I’m guessing she must have a Centurion card).

Now, Courtney has turned around and filed a counter-suit against them… she blames AmEx for the problem! Reportedly her attorney, Keith Fink, told TMZ that American Express issued her (and her business entity) a staggering 104 credit cards! They seem to imply that AmEx was negligent in issuing her so many credit cards that supposedly she didn’t ask for or want. She also claims all the charges were fraudulent and not made by her, and therefore she’s not responsible for them.

What do you think? Is Courtney Love just a victim of identity theft or is there more to it than that?

(p.s. Courtney – if you’re looking for an Amex Centurion alternative, check out the Visa Black Card!)

This story was first reported Jan 4, 2010

For the average American, it is often difficult to accumulate sizable credit card rewards in a timely manner. Spending enough to get a free airline ticket may take you a couple years. However if you’re a business and you funnel your purchases through a card, we all know how easy it is to rake up big rewards. The government is the biggest “business” out there, so who’s getting those credit card rewards? Or even if a credit card is not being used, who’s being awarded the frequent flyer miles on those purchases?

Is A Recent CNN Article Evidence of Fraud?
In November 2009, CNN ran an article titled World Is Small For Mileage Millionaires. It’s an article about – you guessed it – those whom rake up millions in frequent flyer miles and how they do so. While reading it, this is what really caught my eye…

For Charles Witt, the biggest perk of having accumulated millions of miles is being taken care of while globetrotting, he said. He also likes being able to splurge on travel for himself and his friends.

Witt, 41, who is a U.S. government employee in Washington and travels all over the world on business, gave himself a trip on the Concorde as a birthday present in 1994. He spent 240,000 miles for a special promotion that let him fly first class on a regular plane from Washington to London and return on the supersonic jet.

First of all, so I don’t get sued, I want to be very clear that the above information by itself does NOT mean there’s any fraudulent activity taking place. Obviously much more information would need to be gathered to make that determination.

Here’s My Concern
This is a government employee. The article says he “travels all over the world on business.” Reportedly, he’s accumulated millions of miles. If (and again, that’s an if) those miles are indeed earned through his work-related travel for the government, then why on earth does he “splurge on travel for himself and his friends” with the miles earned?

I mean, let’s be logical here. Whichever party is ultimately paying for the travel should also be the one reaping the rewards. If an employee travels frequently for their government job (and that’s being paid for by the government) then shouldn’t those miles go towards future work-related travel? To me, this doesn’t sound like work-related travel…

This Christmas, he’s planning a first-class trip with his girlfriend to Taipei, Taiwan, purchased with his miles. They’ll spend New Year’s in Tokyo, Japan.

If this first-class New Years extravaganza for him and his girlfriend is being purchased with miles earned through his job, then that is just plain wrong. It may not be illegal (I have no idea what the government’s official policy regarding such is) but I think most would agree it is morally wrong to say the least.

I hope you and your family had a wonderful Thanksgiving! I also hope your Black Friday wasn’t too hectic (if you participated). Compared to last year, in my opinion the deals this year really sucked, so I didn’t bother getting up before the crack of dawn to go wait in line. However I did make it out to the mall during the afternoon to take a gander and as expected, the sales were not impressive to say the least. I didn’t buy a single thing.

Black Friday: The Online Version
Meanwhile, many others were skipping the stores for another reason… they were doing black Friday online. In fact, since the beginning of the month there has reportedly been a 23% increase in online purchases (according to ReD payment processing). They also claim the increase in fraudulent online activity (or at least, attempted activity) will be 38% greater than last year. And of course virtually all of that involves debit and credit card fraud.

What To Do If You’re a Victim
Fortunately – at least in the United States – if someone uses your account to make fraudulent purchase, you probably won’t be responsible. Why do I say probably and not definitely?

For Credit Cards
Well, when it come to credit cards… you are definitely protected – under federal law, the maximum liability you have is $50. However, pretty much every bank and financial institution has chosen to make that $0 liability… so you really have nothing to worry about when it comes to your credit cards.

For Debit Cards
But debit cards are another story… you are most likely protected, but not always. Your maximum liability increases to $500 with debit cards. Usually banks will not hold you liable for any amount, but they have been known to hold customers liable for the maximum amount permitted by law… it’s extremely rare, but it does happen. PIN-based fraudulent transactions on your debit card are known to be harder to fight. However the biggest danger I feel is with the checking account your debit card is linked to. If a crook spends your money, your balance will drop (at least temporarily) until you detect the fraud. If you have outstanding checks, that may cause them to bounce.

(we have a credit card fraud help discussion board to assist victims)

The Safest Option?
The truth is you will probably not be held liable for debit card fraud if you detect it within a reasonable amount of time, so I wouldn’t worry about that. But as mentioned, the temporary drop in your checking account balance can pose a problem, especially if you use checks to pay your rent or mortgage. For that reason, I feel it’s safest to stick with credit cards.