Legal News

Once Bitten: Madoff Victims Targeted in Yet Another Scam

By Amir Efrati

It was inevitable, right? After enduring the pain of losing lots of money in the Bernard Madoff fraud — and having their identities made public — the Madoff victims are the latest target of an online scam.

A Web site called i-sipc.com purports to mimic the Web site of the Securities Investor Protection Corporation, an agency created by Congress that is supposed to help customers of collapsed brokerages.

SIPC, which spread word of the scam Tuesday morning, has been dishing out funds to certain Madoff victims who qualified. The victims had to provide the agency with lots of financial data.

That’s where “I-SIPC,” or International Security Investor Protection Corporation, comes in. The I-SIPC Web site is soliciting Madoff victims to submit claims, which SIPC (the real one) is warning could result in "phishing" or other identify theft problems. The phony group claims to be based in Geneva and also maintains that it has ties to the United Nations and the International Monetary Fund, among others.

In one section of the bogus Web site, SIPC warned, the group includes a supposed testimonial from a Madoff victim who purportedly received funds from the organization. The site also falsely claims to have collaborated with Interpol to recover $1.3 billion in Madoff money from a hideout in Malaysia.

SIPC said it will seek to have the violator prosecuted to the extent the law allows. We’ve asked SIPC whether any Madoff victims have been victimized by the scam and will let you know when we hear back.

Full post as published by Law Blog - WSJ.com on March 09, 2010 (boomark / email).