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Analysis: A tsunami of charity ripoffs

By AL SWANSON, United Press International

Just a month after one of the deadliest natural disasters in human history, a Wisconsin identity-protection firm has identified 170 potentially fraudulent Internet Web sites soliciting donations for victims of the Indian Ocean tsunami.

Potential donors have been warned about scams from India to Australia, including an Internet scam posted days after an earthquake measuring 9.0 on the Richter scale unleashed huge waves that devastated the coasts of more than 12 countries in Asia and Africa.

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The World Health Organization puts the tsunami death toll at more than 200,000 with as many as 5 million people left without the basics of food, shelter and clean water.

The United States pledged $350 million initial relief but the overwhelming public response to the disaster has already surpassed that figure.

Compassion of ordinary people opening their wallets, purses and checkbooks has brought out all matter of con artists, and the FBI warns about tsunami relief scams.

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Matthew Schmieder, a 24-year-old unemployed painter from Carrick, Pa., was indicted on charges of wire fraud, fraud and activity related to electronic mail for allegedly sending 800,000 spam e-mail messages seeking tsunami donations. His message implied it was sent on behalf of Mercy Corps, a humanitarian group based in Portland, Ore.

Schmieder reportedly collected about $150 from PayPal, eBay's secure transaction site, before he was arrested at his home near Pittsburgh. Authorities agreed to drop the charges in Pennsylvania so he could be prosecuted in Washington state. Schmieder told FBI agents he developed the scam because he needed money to fix his car and pay bills.

The Australian Broadcast Corp. said two wine carafes containing about $500 in donations were stolen from the front counter at a roadhouse in the outback and a man was charged with snatching a tin of donations at an east Melbourne restaurant.

The New Zealand Red Cross advised potential donors to be aware of hoax e-mail messages that give an overseas bank-account number where donations can be sent.

Stealing is stealing. What's the difference?

Mass sending of phony e-mail messages that look authentic -- known in the con trade as phishing -- appears to be the scam of choice. Many times a single letter in a legitimate charity's logo is changed or omitted in the message.

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"They look like or sound like charitable organizations, America Cares instead of AmeriCares, or Connectcares. There is no such organization," said Connecticut Attorney General Richard Blumenthal.

NameProtect Inc., which works with MasterCard International, is assisting U.S. law enforcement in identifying charity scammers trolling to illegally obtain credit-card numbers and personal or financial information online.

Similar Internet scams surfaced after the Sept. 11, 2001, terror attacks and after every major natural disaster since then, according to an online alert by ScamBusters.org. A 20-year-old Canadian art student tried to sell the domain name tsunamirelief.com on eBay for $50,000.

One of the more egregious scams targets friends and family members of missing people holding out the hope of an "investigator" searching for a loved one in one of the affected countries.

"The FBI came to us soon after the Asian crisis and said, 'We think we have an evolving problem here,' and asked for help," NameProtect Chief Executive Officer Mark McLane told the Wisconsin State Journal.

NameProtect uses sophisticated digital technology to look for suspicious activity before giving leads to law enforcement. Some of the 170 potentially fake sites claim to show pictures of disaster areas or victims, but attached files actually may be computer viruses or worms.

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"They've opened a number of active investigations based on the results we've given them," McLane said.

Consumers can protect themselves by never clicking on a link in an e-mail message -- simply go directly to the legitimate Web site using the correct URL. Suspected fake e-mail and Web sites should be reported to police.

"We're actively working law enforcement globally and a lot of these sites have been shut down," McLane said.

Experts advise Internet users to not respond to unsolicited e-mail messages or "urgent appeals," be skeptical of individuals claiming to represent disaster survivors or foreign governments, verify the legitimacy of non-profit organizations and confirm contributions to U.S.-based non-profits are used for intended purposes.

Oxfam, a legitimate humanitarian organization that specializes in water treatment infrastructure, has been mentioned in a fake fundraising letter.

Relief groups like AmeriCares, which have low overhead, send 99 percent of donations to victims. The American Red Cross and Save the Children send 91 cents of every $1 donated.

Guidestar.org, a national database of non-profits, lists 238 organizations providing tsunami relief.

Rep. Henry Hyde, R-Ill., convenes a full hearing of the House Committee on International Relations Wednesday to evaluate how the United States is responding to the tsunami disaster.

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Taxpayers who itemize deductions will be able to deduct charitable donations for tsunami relief made in January on their 2004 federal income tax returns under a new law passed Jan. 7.

"There are no extra forms to fill out or any additional burdens for taxpayers," said IRS Commissioner Mark W. Everson. "As long as you send your check by the end of the month, the donation will be treated just like it was still 2004."

Taxpayers have the option of deducting the contributions for either 2004 or 2005, but not both years.

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(Please send comments to [email protected].)

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