Sophos is warning computer users about the danger of internet scams, following news that a former treasurer of Alcona County, Michigan, has been arrested after allegedly investing more than 1.2 million USD of county funds in Nigerian fraud scams. According to Sophos, Thomas Katona, who was treasurer of the county for thirteen years, has been charged with forgery and multiple counts of embezzlement. Both charges carry a jail sentence of ten years or more.
County treasury employees became suspicious of Katona’s dealings after local bank officials informed them that he had directed several unauthorised transfers to overseas accounts during late 2006, including to beneficiaries linked with Nigerian 419 scams. It was then uncovered that he had made further payments using his personal savings, and had previously been advised by bank officials that he was investing money in fraudulent schemes. Sophos notes that a shortage of 1.236 million USD has now been reported by Alcona County – more than one quarter of its yearly budget.
419 scams are named after the relevant section of the Nigerian penal code where many of the scams originated and are unsolicited emails where the author offers a large amount of money. Once a victim has been drawn in, requests are made from the fraudster for private information which may lead to requests for money, stolen identities, and financial theft.