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For 3 Years, Scammers Ran Truckless Trucking Company 244

Posted by timothy
from the trucker-in-the-middle dept.
mikesd81 writes "Wired reports Nicholas Lakes and Viachelav Berkovich are charged with computer fraud [PDF] for a man-in-the-middle attack that allegedly let them run a profitable trucking company without the hassle of driving a truck. For over three years the Russian immigrants hacked a Department of Transportation website called Safersys.org, which maintains a list of licensed interstate trucking companies and brokers. They then went on forums where brokers advertise cargo in need of transportation and negotiate a deal, for example, to transport cargo from American Canyon, California, to Jessup, Maryland, for $3,500. But instead of transporting the load, they would outsource the job to another trucking company posing as the legitimate company whose identity they'd hijacked. They would then invoice the company and take the money. When the company that owned the actual truck tried to contact the company that needed the goods delivered, they found they knew nothing about it. Over all they made nearly $500,000."
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For 3 Years, Scammers Ran Truckless Trucking Company

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  • Hmmm (Score:5, Insightful)

    by TheLink (130905) on Wednesday October 22, 2008 @02:00PM (#25472421) Journal
    Sounds a bit like the music industry to me.

    When the time comes for the artists to get paid...
  • Re:Hmmm (Score:0, Insightful)

    by Anonymous Coward on Wednesday October 22, 2008 @02:07PM (#25472505)

    Nah, it's the fractional reserve banking system.

  • by GPS Pilot (3683) on Wednesday October 22, 2008 @02:28PM (#25472843)
    In earlier years, this kind of fraud could have been executed over the telephone, or through the mail. Why does the medium that was used affect the specific criminal charge applied -- "computer fraud"? Just plain fraud would do nicely.
  • by DaveV1.0 (203135) on Wednesday October 22, 2008 @02:32PM (#25472913) Journal

    Except that it wasn't environmentally friendly because a truck still rolled with a load. The load got delivered, but the pay for the delivery was stolen. And, chances are the "company" that delivered the load and didn't get paid was an independent trucker, and loosing that money could put them out of business.

  • Crime does not pay (Score:5, Insightful)

    by Animats (122034) on Wednesday October 22, 2008 @02:36PM (#25472971) Homepage

    All that work by several people over three years to make $500K? There were apparently more people involved than the two indicted, and they had some operating costs. So they might have made $50K/year per participant, if they were lucky. And they had all the hassles of running a business. Even without the "going to jail" part, this was a lose.

    They probably would have done better running a legit trucking brokerage, which they clearly knew how to do. They had to do all the selling and paperwork a real broker would do. Worse, their scam model didn't allow for much repeat business, so they had to keep hustling to find new customers.

  • by whoever57 (658626) on Wednesday October 22, 2008 @02:39PM (#25473023) Journal

    This is just another example of how the FBI is failing the people of the USA. There is no way this should have taken 3 years to shut down.

    It's not even an example where the FBI helped a company but would not help individuals. Most (if not all) of the victims were companies.

  • by bobjr94 (1120555) on Wednesday October 22, 2008 @02:39PM (#25473045) Homepage
    That sounds like alot of work for 500,000 over 3 years.
  • Almost legitimate (Score:3, Insightful)

    by Bob-taro (996889) on Wednesday October 22, 2008 @02:42PM (#25473071)

    Except for the fact that they were stealing another company's identity, that's not a bad idea. If they'd started something called, say, "truck-bay" and allowed people to take bids from trucking companies on specific delivery jobs (tacking on a service fee of their own of course), they'd have a perfectly legitimate business.

  • Re:Wait... (Score:5, Insightful)

    by inviolet (797804) <slashdot.ideasmatter@org> on Wednesday October 22, 2008 @02:48PM (#25473187) Journal

    Thanks for that explanation.

    Has anyone noticed that these two zeebs didn't actually earn a very good living with this scam?

    Two guys laboring for three years to produce ~$500,000... that is an annual salary of $83K apiece, which is good pay for a regular low-risk job but lousy pay for a high-risk situation like this one. And lo and behold the risk occurred and stung them both.

    The more stories like this I hear about, the more I think that most criminals work too hard for their take, and ought to reconsider.

  • by skelly33 (891182) on Wednesday October 22, 2008 @02:49PM (#25473209)
    You scooped me. I was going to mention the same. Two hackers, $500K over 3 years is $83K/year. They could have made better money working for Google. Waste of time and prison sentence.
  • Re:Wait... (Score:5, Insightful)

    by billsnow (1334685) on Wednesday October 22, 2008 @03:07PM (#25473471)
    83K per year per person is pretty lucrative for small-time criminals. They don't pay any taxes. They live in their immigrant neighborhoods, which have a low cost of living (even in cities like brooklyn). There is no such thing as high-risk to immigrant criminals, except for deportation, of course. Pretty good scam, considering they didn't need a lot of people (no credit).

    (didn't RTFA)
  • Re:Wait... (Score:5, Insightful)

    by Overzeetop (214511) on Wednesday October 22, 2008 @03:11PM (#25473501) Journal

    On the contrary, where can you find a job doing anything legal which nets you $83k after taxes and lets you (a) work from home (b) not bother to work when you don't want to and (c) only requires a few hours a month (which is all they probably did). If the 83k were taxable, it would put them in the top 23% of wage earners in the US, and if you account for taxes on top of their (untaxed) 83k (i.e. payroll and income), you're solidly in the top 15% in take-home.

    Trust me, being a criminal is far less time intensive than a steady job at the same wage. Most of these guys would probably struggle to hold down a $22-30,000/yr service position in the "real world".

    Besides, now it looks like they'll get free room and board for several years.

  • by yuriyg (926419) on Wednesday October 22, 2008 @03:14PM (#25473551)
    $500,000 tax-free is more like a $750,000 before taxes. Between the two of them that would be a $125,000 annual salary each for not doing much.
    Besides we only know about this scam, who know what other "businesses" these guys were running.
  • Re:Wait... (Score:5, Insightful)

    by mr_mischief (456295) on Wednesday October 22, 2008 @03:15PM (#25473567) Journal

    The story of hacking isn't bullshit. They changed the contact info for the companies they were impersonating to numbers they controlled. It says so in TFA. The scam may have worked without that step, but according to the article that's what they did.

    Also, it's funny that if they'd paid the subcontractor and kept the difference, they'd probably still be running the scam. They'd probably be able to rip off the brokers indefinitely if the trucking companies were happy with their pay and arrangements. It seems it was the angry trucking companies coming back on the brokers they thought hired them that caused this to break open.

    A smaller, slower take could have given them a good steady side income for years longer. If the only crime was posing as some broker and using that broker's good name to garner business, they'd get light sentences even if they were caught. If they could have ramped up to where they were stealing 3% or 4% of every broker's business, they'd have been able to live very comfortably.

  • by Anonymous Coward on Wednesday October 22, 2008 @03:19PM (#25473639)

    Why didn't you just press the kill switch or pull in the clutch?

  • Re:Wait... (Score:3, Insightful)

    by nomadic (141991) <nomadicworld@NOSpam.gmail.com> on Wednesday October 22, 2008 @03:45PM (#25474071) Homepage
    Also, it's funny that if they'd paid the subcontractor and kept the difference, they'd probably still be running the scam.

    I guess that would too close to "work."
  • Re:Wait... (Score:3, Insightful)

    by droopycom (470921) on Wednesday October 22, 2008 @04:16PM (#25474561)

    If they did that:

    1) They would have to compete with other trucking company
    2) They would not be able to offer lower rate to the shipper, and higher rates to the subcontractor. (hence harder to compete)
    3) They would have made $2000 instead of $500000 (assuming they could charge a difference of 4% - and assuming they could get the same amount of business)
    4) Their only monetary benefits compared to a being a real broker would be avoiding paying taxes and whatever fees a broker needs to pay.

    So yeah... It would not work very well...

  • Re:Wait... (Score:4, Insightful)

    by billcopc (196330) <vrillco@yahoo.com> on Wednesday October 22, 2008 @06:44PM (#25476441) Homepage

    I don't find that incredible at all. I have relatives in the trucking industry (yeah go figure!).

    1. Contractors usually invoice with net-30 terms, meaning they only get paid a month after the job is done.

    2. Some jobs are paid upon project completion, which means you could be waiting 3-6 months or more.

    2. A lot of trucking/construction businesses are run by imbeciles with poor cashflow that pay late, and some of them are just assholes who pay late on purpose.

    3. A lot of companies go bankrupt (or vanish) and never pay.

    4. A large number of truckers are independent, so the bookkeeping is handled by either the guy himself or their spouse. Things fall through the cracks all the time.

    5. How many trucking companies are there in the US ? Enough that these crooks never had to use the same one twice. These contractors don't exactly communicate fraud information with each other, so you could scam N-2 companies and still find a pair of suckers.

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