To the Victor Go the Spoils: Fraud and the Olympic Games

As the world gears up for another exciting celebration of athletic prowess, the criminal underworld is preparing to take advantage of our collective jubilation and the anticipation of the Games.

July 2012

By Laura Hymes, CFE

As the world gears up for another exciting celebration of athletic prowess, the criminal underworld is preparing to take advantage of our collective jubilation and the anticipation of the Games. The Olympic Games generate an economy unto themselves, and a segment of the population — eager to snatch a share of that money — will employ a litany of schemes to defraud fans.

In Beijing during the 2008 Olympic Games, ticketing scams and sales of counterfeit merchandise were widespread, so London authorities have been trying their best to prevent a recurrence this year. The Metropolitan Police created Operation Podium as a division of the Specialist Crime Directorate with the goal of preventing and detecting fraud related to the Olympics. In addition to raising awareness of fraud risks and investigating suspected cases, Operation Podium has its own intelligence division that is currently uncovering and interpreting information to head off risks. Among the various schemes that agents of Operation Podium are watching for are:

Internet and email scams

Fraudulent sales

Increases in preexisting crimes

Internet and Email Scams 

One of the easiest ways for criminals to execute fraud is anonymously through the Internet. Operation Podium agents are warning the public to be wary of emails claiming that the recipients won an Olympic lottery they did not enter, with prizes such as free tickets, hotel rooms, transportation to the Games, and food and merchandise. Emails of this nature generally direct readers to an unsecure website and ask them to enter personal or financial information, which the fraudster then uses for his own benefit. Additionally, unsecure websites or attachments to unsolicited email messages can infect the recipient’s computer with malware. Malware is any malicious software, such as viruses, spyware, adware and keyloggers.

In addition to lottery emails, police are warning about messages that offer job opportunities at the Games for a finder’s fee, and others that purport to authorize business owners to sell their products at the Games for a cost. These are advance-fee schemes in which the victim pays the fee but does not receive anything in return. By the time the victim tries to follow up with the fraudster or reports the incident to police, the perpetrator has moved on and cannot be located. A list of known scams can be found here. 

In this video clip convicted fraudster Steve Comisar describes a lottery scam that he used against unknowing victims before his arrest. It follows the same pattern as the advance-fee schemes being perpetrated against Olympic fans: 

Fraudulent Sales 

One of the most prevalent crimes during the Beijing Olympics was fraudulent sales. Fake tickets were sold to hopeful spectators around the world who arrived at the Games only to have the expensive tickets they thought they purchased legitimately rejected. The London Games have already been plagued with the same problem, and Operation Podium’s intelligence unit is diligently searching for and shutting down online operations that sell counterfeit tickets. However, consumers should also work to protect themselves by only purchasing tickets from official Olympics sellers. This website verifies a ticket-seller’s authenticity and includes a list of known sham vendors. Onsite scalpers also abounded in Beijing, and spectators assume the risks and liabilities if they purchase scalped tickets in London. 

In an interesting approach to prevention, two years ago Operation Podium agents began issuing warnings to individuals who registered websites in the UK with the word Olympics in the domain name. By letting these potential fraudsters know they were being watched, agents hoped to discourage them from selling fake tickets before they began — and it seems to have worked. As the Games draw closer, most websites committing ticket scams are based outside of the UK.

London officials see the potential for fraudulent sales extending beyond tickets, and have included the advertising and selling of fake hotel rooms and merchandise in Operation Podium’s purview. Counterfeit merchandise in particular is expected to increase as the Games approach. However, officials point out that this is one of the easiest scams for consumers to avoid — only purchase merchandise from official Olympics vendors. Fans might be tempted to save money by buying off-brand t-shirts out of the trunk of a car, but they get what they pay for. Unofficial merchandise does not undergo a quality-control process and can be defective. One way to ensure that you are purchasing official merchandise is to look for the hologram of the Olympic symbol on the label.

Agents have already shut down many operations selling counterfeit or nonexistent tickets or other items, and they continue to warn the public about purchasing from strangers or illegitimate websites. Some helpful tips about how to avoid paying for fraudulent items can be found here. 

Increases in Preexisting Crimes  

In addition to crimes directly connected to the Olympics, London officials are preparing for a rise in more general schemes as fraudsters attempt to take advantage of the large pool of potential victims in town for the Games and retailers overwhelmed by customers. For example, agents are upping their surveillance of ATMs to combat an increase in skimming devices being attached to machines. Skimming devices are card readers that are attached to the outside of ATMs. They gather card information without the user’s knowledge, which fraudsters then use to perpetrate identity theft and steal funds. 

Police are also warning local business owners and employees to be alert for customers trying to use counterfeit or forged checks during the Olympics or attempting to launder money through the system. Officials worry that the busy time might leave companies especially vulnerable to such scams.

Prevention and Investigation 

Operation Podium takes a two-pronged approach to Olympic fraud with a preventive division and an investigative division, both of which are supported by an intelligence team. The prevention staff is working proactively with local business owners and residents to educate them about the various risks. Prevention specialists have also established information-sharing relationships with various industry leaders and officials in other countries, and agents are running tests on their intelligence in advance of the Games.

The investigative arm is pursuing known or suspected fraudsters and closing deceptive operations in the hope that, if agents are able to hinder fraudsters prior to the opening ceremonies, they won’t be able to rebuild their schemes in time to prey on the influx of visitors.

However, the key prevention and detection measure lies in an educated population. Anyone planning on attending the Olympic Games or purchasing merchandise related to the event should adhere to the following basic safeguards:

Be wary of the deceptive use of the Olympic symbol online.

Update your computer’s anti-virus software.

Do not purchase tickets from a vendor that displays only a phone number or an email address as contact information.

Check for the hologram logo before buying merchandise.

Report unsolicited emails promising anything free or exclusive to Action Fraud, the UK organization responsible for collecting information about frauds.