After the fitness center where Denise Newton worked closed down in April because of the coronavirus, she posted her résumé online to look for a new job. She soon got a call from a company she had never heard of.
The woman who phoned from the company, Heies, invited Ms. Newton to apply for a job as a “local hub inspector.” When she started work in May, Ms. Newton began receiving boxes with Apple watches and laptops in them. Her job was to open the boxes, check the contents and then mail them off to foreign addresses.
But something was off. The boxes were suspiciously plain, even though they included brand-name products. The name on the labels was never Ms. Newton’s. When she asked questions, her new employer stopped responding. In June, she reported Heies to the Better Business Bureau.
It turned out that Ms. Newton had become what is known in security circles as a money mule, an accomplice who, either knowingly or unknowingly, helps international criminal rings move their ill-gotten gains. In Ms. Newton’s case, swindlers appeared to be buying products in the United States with stolen money and then mailing them — using unwitting intermediaries like her to disguise their involvement — to overseas locations where the goods could be resold for cash.
“They really caught me at the perfect time,” said Ms. Newton, 24, who was living with her parents in Birmingham, Ala. “I was just one of those desperate people looking for a job.”
Since the pandemic’s onset in March, the number of criminal schemes relying on money mules has spiked, just when many people have lost their jobs and are vulnerable to exploitation. The volume of schemes has been turbocharged partly by criminals going after enticing pots of money from the U.S. government — specifically, the benefit programs that were set up to help people and businesses hurt by the pandemic-induced economic downturn, the authorities said.
In total, online human resources schemes where criminals pose as potential employers have soared 295 percent from a year ago, while schemes used for money laundering have skyrocketed by 609 percent, according to the security firm ZeroFox.
Many people who perpetrate these frauds are based overseas, authorities said, so they need to move the money to their home country. Banks and authorities have made it harder to launder money through traditional financial channels in recent years. So these criminals are now increasingly on the hunt for a larger supply of potential money mules just as many newly unemployed people look for work.
“It is something that is escalating because of the current environment,” said Robert Villanueva, a former Secret Service agent who now works on cybercrime intelligence for the security firm Q6 Cyber. “It has become hard to avoid.”
Money mules are not new, and their numbers have risen alongside online fraud more broadly over the last two decades. Some people enter the business knowing it is illegal. Advertisements looking for money mules on the so-called dark net, an anonymous corner of the internet popular with criminals, often acknowledge the illegal aspect of the work.
“Hi. I need an excellent professional bank accounts loader for long term business,” read one ad from May, which was turned up by the dark net research firm Flashpoint.
Yet seven people who became money mules during the pandemic told The New York Times that they had no inkling of what their so-called employer was up to when they began the work. Many had recently lost their jobs and needed to pay the bills. To avoid exposure to the coronavirus, they were also looking for jobs to do from home, just what many swindlers want from a money mule.
Alma Sardas, 21, had been furloughed from her job at a hotel in Fort Worth this spring when she saw a listing on the jobs site ZipRecruiter advertising a work-from-home position as a “virtual assistant” to a businessman in Hong Kong.
Ms. Sardas sat through a formal interview and spoke with a man who called himself Hermann Ziegler, who said he would be her boss. Once she was hired, she was sent a check for $4,590 to deposit into her bank account. She was told to use some of the money for her expenses and to send the rest from her account to her new employer’s vendors.
Ms. Sardas became skeptical about why the money would need to go through her bank account and called the local police. They explained that she had almost been caught in a classic money-laundering scheme.
“You make yourself so sincere and these people just take advantage of it,” she said, adding that she had shredded the check and reported the incident to ZipRecruiter. ZipRecruiter said it removed the job posting immediately.
The schemes using money mules are varied. Some people who become mules are victims of online romance frauds who make bank and wire transfers for people they believe care about them. Others, like Ms. Sardas, are asked to use their own bank accounts to make financial transactions on behalf of their new employers. Ms. Newton became embroiled in what is known as a reshipping scheme, where the fraudsters buy goods with their stolen money and then use mules to get the products overseas, where they can be resold.
Some of these operations have become well-oiled machines. William Zackery, 64, a substitute teacher in Northern California, began working with a company called SFP Shippers in May. SFP Shippers appeared to have multiple departments, a website and a custom online dashboard that he had to log in to each day.
Mr. Zackery, who was out of work, was enlisted to receive packages with expensive purses and cameras. It was his job to print new labels and ship the goods on to other places across the country. Many mule operations use multiple shipping legs to cover their tracks, security experts said.
At first, he did not think anything was amiss. “I was getting calls two or three times a day from my so-called supervisors,” he said. But when the new employer stopped communicating, “I started doing some research that I should have done at the beginning.”
Mr. Zackery ultimately reported SFP Shippers to local and national authorities; the company’s website has been taken down.
Sometimes people’s identities are used without their knowledge. Over the last few months, Scattered Canary, a Nigerian criminal operation, submitted fraudulent claims for unemployment benefits in at least 14 states and then had the money delivered to accounts that they had set up, in the names of their victims, with Green Dot, a financial services company, according to the security firm Agari.
Scattered Canary then sent the money overseas through Green Dot’s online system, all before the person whose name was used was alerted to the new account, the security firm said.
Alison Lubert, a spokeswoman for Green Dot, said the company works “around the clock and invests heavily to identify, block and address fraudulent activity.”
Jamarle Worilds, the chief of the illicit finance unit of Homeland Security Investigations, a division of Immigration and Customs Enforcement, said many people who act as money mules “don’t actually understand that they are operating in the space.” He said he had recently received text messages offering him the opportunity to work from home, which he easily spotted as an effort to recruit him as a money mule.
“I’m not sure about how they got my information, but that’s what it’s come to,” he said.
In Ms. Newton’s case, the woman from Heies who called identified herself as Carla Neely. She told Ms. Newton that the company needed “hub inspectors” to move packages for customers. Ms. Newton was pointed to a company website and went through an interview and a formal human resources process before being hired.
“Congratulations! We were impressed with your interview and would like to extend you a conditional offer for the position of Local Hub Inspector at Heies,” Ms. Neely wrote to Ms. Newton in her hiring letter.
Apart from Apple Watches and laptops, Ms. Newton said, she was also sent odd items, including a pack of sponges and a garbage disposal.
By the time Ms. Newton reported Heies to the Better Business Bureau, the numbers and emails that the company had used were dead. Its website had also been taken down. The perpetrators, who have faced other online complaints, have not been caught.
“I feel scared that I have blood on my hands because I’m in the middle of a scam and I’m also in the middle of a pandemic,” Ms. Newton said. “They pretty much just took advantage of my vulnerability.”
VCs have to train themselves to ‘ask the stupid questions’, says Hoxton Ventures’ Hussein Kanji
If venture capitalists could predict the future, why wouldn’t they just start companies themselves? That’s the question Hussein Kanji, founding partner at Hoxton Ventures, asked rhetorically at Disrupt 2020.
“If anyone says that they have predictive power in this industry and says they know where the future is gonna be, I just question the wisdom of this,” he said during a session exploring how VCs seek out new markets before they even exist. “Because if you could figure it out, you could come up with the idea, you’re capable enough to be able to put all the pieces together, why would you not found the business?”
Instead, the key to betting on the future is to learn to ask the stupid questions. “I think it’s actually perfectly fine in the venture industry to not be the smart person and to kind of train yourself to be stupid and ask the stupid questions,” said Kanji. “I think a lot of people are probably too shy to do that. And a lot of people [are] probably too risk averse to then write the check when they don’t really understand exactly what it is that they’re investing into. But a lot of this stuff is a lightbulb moment”.
One of those lightbulb moments was Hoxton Ventures’ investment in Deliveroo, the takeout food delivery service that competes with UberEats and helped turn almost every restaurant into a food delivery service. However, Kanji reminded us that the European unicorn wasn’t the first company to try takeout delivery, but new technology, in the form of cheap smartphones coupled with GPS and routing algorithms, meant the timing was now right.
“People did try delivery,” he said, “they tried it back in the 90s. Everyone forgets about that. There’s a company in New York City called Cosmo that would go off and like get you a pint of ice cream on demand. You know, it never worked because they used pagers. Like, do you remember pagers? Like, that’s how they ran the fleet. They couldn’t move the fleet around. They couldn’t get the driver to the apartment and the driver to the store in any kind of efficient way… The breakthrough for delivery, and for that whole industry, was you had smartphones, you could give smartphones to the drivers, you could track what the driver was doing, which is good because then you could route logistics, you know, with a smartphone… light bulb moment”.
Kanji said that, although they are very different businesses and markets, Hoxton’s two other unicorns, Babylon and Darktrace, involved similar lightbulb moments. Yet you don’t get that light bulb moment until someone walks in the door and explains it to you. “Then your natural question is… why now… what’s actually changed? Like, what makes this so interesting? Why didn’t someone come up with this a year ago? There’s almost always usually a reason for that kind of stuff. And then then the harder part of the job is … are you really picking number one?”
Entering or helping to create new markets is often not without controversy — which both Babylon and Deliveroo has attracted for different reasons. As real disruption inevitably creates societal consequences, it often raises ethical questions that, the Hoxton co-founder argues, aren’t always possible to anticipate early on. However, as the picture becomes clearer, he says VCs should absolutely care, along with, of course, founders and CEOs.
“One of the constant criticisms in the tech industry is, I think the maturity of our industry… we behave more like teenagers. And it’s great to be libertarian, it’s great to be free markets and say markets are gonna sort it out. But you’re gonna have touch points with a lot of other places in society. You’ve got to figure out, and I think, get ahead in terms of…what the impact is going to be, and be more responsible”.
TikTok and Oracle deal could be approved by Trump despite resistance from Republicans
The deal would require extensive outside oversight of TikTok in the United States, including a plan for the company to go public within the next year or so to increase transparency into its operations, one of the individuals said.
Mnuchin called senior Defense Department officials Wednesday and briefed them on the deal but told them it was going to get done regardless, according to some of the people familiar with the talks.
His message was, “Give me your concerns and I will try to address them, but we are doing this,” said one former U.S. official briefed on the call who, like others, spoke on the condition of anonymity.
Oracle chief executive Safra Catz has developed a close relationship with the White House, including serving on Trump’s transition team as he took office. Nonetheless, Trump met with Oracle on Wednesday and expressed concerns with the deal, a senior administration official said.
Trump told reporters Wednesday that he would not be happy if ByteDance maintained its majority stake in the business.
“Conceptually, I can tell you I don’t like that,” Trump said. “If that’s the case, I’m not going to be happy with that.”
Mnuchin will have to overcome Trump’s reluctance. “I don’t think anybody has the ability to push something through if the president is opposed to it,” said a senior administration official.
TikTok confirmed this week that it has chosen Oracle as its “trusted technology partner” after two months of confusion and harried dealmaking, as Trump moved to ban the short-form video app in the country, citing national security concerns. Suitors including Microsoft, Walmart and Oracle were interested bidders, but as government requirements conflicted in Washington and Beijing, TikTok eventually presented a deal that marked a significant step back from a full sale.
Instead, the proposed deal would make TikTok’s U.S. user data entrusted “exclusively” to Oracle and give Oracle oversight over all TikTok’s technical operations in the country, according to the person familiar with the talks. The entire deal is designed to quell officials’ fears that TikTok poses a national security threat because of its Chinese parent company. TikTok has said repeatedly it does not share U.S. customer information with the Chinese government.
U.S. officials say, however, Chinese laws require Chinese companies to share data with the government if directed and give the companies no discretion to refuse.
The Treasury Department sent the proposal back to the companies Wednesday with revisions on how the security structure would work, and ByteDance accepted the changes, one of the people said.
Under the proposed deal, the U.S. government would be able to approve the board members of the new TikTok entity, which would probably include Walmart chief executive Doug McMillon. Walmart would invest in the company, one of the people said.
TikTok would also prepare for a U.S. public offering in the next year. And it would allow a third-party organization to conduct audits and oversight of its operations.
Oracle, Walmart and TikTok did not comment beyond previous public statements earlier this week.
The Treasury Department did not respond to a request for comment.
Pentagon spokeswoman Jessica Maxwell had no comment.
TikTok’s saga with the U.S. government heated up this summer when Trump threatened to ban the app and eventually issued an order that takes effect Sunday, though the government hasn’t said exactly what that ban would look like. The Commerce Department will issue an order Friday spelling out what transactions will be subject to the ban.
“We are focused on the corporate level transactions, the business-to-business relationships,” the senior administration official said. “We’re not interested in going after the college kid in his dorm room taking videos. If people have TikTok on their phones, they’re not going to find themselves before a judge.”
Trump issued a second order that would require ByteDance to essentially divest from TikTok in the U.S. under a process by the Committee of Foreign Investment in the United States (CFIUS), an interagency organization that oversees mergers with foreign companies for national security risks.
Longtime CFIUS staff are upset about how the deal is being handled and have expressed concerns that what is supposed to be a walled-off national security process is being increasingly politicized, according to a former CFIUS official.
By law, the Treasury Department “is the chair of CFIUS and therefore the ‘first among equals,’” said another former official, “but it does not grant them authority to blatantly steamroll other CFIUS member agencies and ignore legitimate national security concerns. Unfortunately, the system has drifted off course.”
The companies and government have been working to finish the deal before the ban is set to take place in just a few days. Mnuchin previously said on CNBC that the deal would also require TikTok to establish a U.S. headquarters for the newly created company and hire an additional 20,000 people here. Currently, TikTok runs its U.S. operations from Culver City, Calif.
Oracle was a somewhat surprising choice to win the TikTok deal after weeks of speculation that Microsoft was the front-runner in the bidding process.
Oracle, which provides database and other services to large companies, does not have a consumer business. But its executives have close ties to Trump, and TikTok is probably an attractive target to boost Oracle’s cloud technology business, which has failed to break into the top of the pack.
TikTok could also bolster Oracle’s data brokerage business, which collects detailed information on consumers to sell to advertisers. TikTok has a growing U.S. base of about 100 million users quarterly.
One lucky winner of this reality TV show will win a trip to the ISS
One reality TV show aims to give its winning contestant an out-of-this-world prize (sorry, I had to). Production company Space Hero has reportedly said it plans to send the champion of a new show to the International Space Station for 10 days. The mission is slated for 2023.
The reality show, also called Space Hero, will be produced by Propagate, according to a Thursday story by Deadline. Startup Axiom Space is reportedly in charge of training the aspiring astronauts and managing the mission.
The contestants will go through rigorous training and be tested for their physical, mental and emotional strength, according to Deadline. The competition is rumored to culminate in a live episode that’s broadcast around the world so viewers can vote for who they want to win. The show will then document the winner’s journey during takeoff and at the ISS, concluding with their return home.
It’s not clear how much it costs to send someone privately to the ISS, but it’s likely to be more than $50 million per person, CNBC speculates. Additionally, the publication notes, spending 10 days at the ISS would bring an additional $350,000 charge from NASA, as the space agency would get $35,000 a night per person to compensate for services needed while aboard the ISS, according to NASA’s cost structure revealed last year.
Space Hero and Axiom Space didn’t immediately respond to a request for comment.
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