As Internet commerce takes off, so does Internet fraud. At least three Web sites are currently posing as banks, soliciting deposits and promoting everything from free Visa cards and offshore tax shelters to patently phony wealth-building schemes. One site (www.the-money-mall.com) is apparently run by a Freemen militia. Incorporated under the "Common Law of the Republic State of Arizona," it solicits certificates of deposit (CD) for something called the Freedom Star National Bank that pay up to 30 percent a year for deposits of more than $5,000. The CDs are guaranteed by the so- called "Shangri-La Mining & Development Company of Alaska and Arizona." These sites can be transient. One calling itself Netware International Bank was the subject of an Office of the Comptroller of the Currency (OCC) suspicious transactions alert on June 24. The office of the site, called homebizcentral and located in a strip mall in Mooresville, NC, was raided by the Federal Bureau of Investigation (FBI) on July 1. Several days later, agent James Walsh said that "the Web site wasn't shut down to our knowledge." But by July 13, homebizcentral was no longer marketing Netware International Bank; instead, it was selling gold coins, "network marketing" schemes, and what it calls "pure trusts," allegedly legal, tax-free trusts that can shelter any amount of assets. Both Netware International Bank and the other homebizcentral operations were associated with Doug Eide, who claims his offerings are sanctioned under "Common Law." Asserting a common law basis for such activities is a frequent resort of militia-type groups; the Republic of Texas militia, the Montana Freemen, and many others often assert common law as cover for their suspicious activities. While many bank customers wouldn't be taken in by the crude offerings at these Web sites, law enforcement officials say other phony outfitsomany operating overseasocould do more damage. They declined to identify them, but officials say that the Secret Service, FBI, OCC and the Federal Trade Commission are working closely in joint task forces to create an effective response to the problem, including enabling legislation being introduced to Congress. -reinbach tfn.com

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.