For isolated islanders in Bermuda, the internet
is our window to the world. Upset that comfort level with interruptions
in internet service, and you will incur the wrath of the individually
confined along with serious businesses.
The
internet amazes us. It delights us with its breathtaking scope. It
communicates and fosters relationships. It draws us in to shop, spend
and spend invisibly private — often, though the visions of the product
are often better than the actual item.
It
manages our time and our money. It provides every one of us (well those
of us that are computer literate with access to the internet) with the
ability to raise our persona from anonymous invisibility to globally
viral, sometimes through deliberate planned exposure, and unpredictably
through totally inadvertent, innocent fun such as the wedding procession
dance on YouTube.
It is compellingly
addictive. The growth of online gambling according to Pokersites, “is
globally estimated at USD 30 billion in 2011, generated from more than
1,000 websites. See Pokersites (www.pokersites.com) informative chart
comparing online gambling business growth from 2010 to 2011 in the UK
and the US:
— A 32.5 percent increase in online gambling while social media only increased 4.5 percent
—
Most popular internet gambling pursuits in the United States are state
and federal lotteries (63 percent), followed by games at 12 percent,
sports betting at ten percent, casinos at nine percent, poker at three
percent and a minuscule one percent bingo participation.
— Women over fifty are the biggest internet bingo players while young professionals prefer online gaming.”
Pokersites uses sophisticated tracking systems to monitor online poker network sites.
The
internet is impersonal. Those at the other end of the click aren’t
always your friends. We are the ones who put a human face, emotional
bonds, trust and confidence on the end of an e-mail, a website, or a
Facebook posting — not really knowing but hoping that they (he or she)
are good people, just like you and me.
Not really. The internet can corrupt and is corrupted by unscrupulous users.
The
number of internet scams rises statistically with the number of
websites, blogs, and interactive messaging. Innovative identity theft,
malware creep into your computer, investment and finance fraud are
rampant and persistent.
Internet Illegal crowd funding
Appearing
as an old wolf in young sheep’s clothing — this new internet threat
looks suspiciously like another illegal investment scheme of old —
global prosperity — criminal fraud multi-level style. Unfortunate
Bermudian resident investors were badly burned by that solicitation with
‘free trips” to the resort touting an imminent initial public offering
(IPO). It was imminent alright only for the cash that flowed incessantly
to the crooks at the top, who by the way, met some justice and jail
time for money laundering and tax evasion. See http://www.quatloos.com/groups/gpg.htm
Legitimate crowdfunding explained
According
to the Wikipedia, ”crowdfunding (alternately crowd financing, equity
crowdfunding or hyper funding) describes the collective effort of
individuals who network and pool their resources, usually via the
internet, to support efforts initiated by other people or organisations.
Crowd funding is used in support of a wide variety of activities,
including disaster relief, citizen journalism, support of artists by
fans, political campaigns, start-up company funding, movie or free
software development, and scientific research.”
Crowdfunding
may be purely donative or commercial where small investors can also
invest in business start-ups and entrepreneurial ventures (owning an
equity piece of the business) through a funding portal — a website.
The
sites create a variety of investment opportunities and facilitate the
payment from the investor to the issuer of the equity (stock). Warning:
fraudsters create websites that look and feel legal to take full
advantage of investor naivety. According to the North American
Securities Administrators Association (NASAA) 2012 NASAA Top Investor
Threats, http://www.nasaa.org/14679/laws-provide-con-artists-with-personal-economic-growth-plan/ crowdfunding and internet offers are at the top of the list.
NASAA
is a voluntary international organisation devoted to investor
protection with membership in the 50 US states, the District of
Columbia, Puerto Rico, the US Virgin Islands, Canada, and Mexico.
NASAA’s fundamental mission is protecting consumers who purchase
securities or investment advice.
Phishing
Phishing
is a scam typically carried out by unsolicited e-mail and/or websites
that pose as legitimate sites and lure unsuspecting victims to provide
personal and financial information. A very popular scam to steal
personal identity involves the use of “supposedly” legitimate US
Internal Revenue Service documents that request the taxpayer contact
them immediately to resolve a tax conflict.
The
scam phisher then creates false tax returns and collects large tax
refunds. US Internal Revenue Service continues to warn US persons (or
anyone with US connections) that the IRS does not initiate contact with
taxpayers by e-mail or any social media tools to request personal or
financial information.
What to do if you
receive a suspicious IRS-related communication. The IRS stresses the
message that unsolicited e-mail claiming to be from either the IRS or
any other IRS-related components such as the Office of Professional
Responsibility, a W-8BEN form, or EFTPS, should be reported to phishing@irs.gov.
The IRS has created an excellent helpful detailed website to combat identity theft and tax fraud here http://www.irs.gov/privacy/article/0,, id=179820,00.html. Whether or not you are a US taxpayer, I encourage you to review the content.
Unknown websites and e-mail.
Never
click, open or submit. Think before you click. Investigate the old
fashion way: phone calls, third-party verifications and recommendations.
If you can’t find them, they don’t exist except to steal from you.
And
for those latching onto to crowdfunding, remember that any investment
rate of return of six percent — 50 percent and beyond is too good to be
true. The return appears fabulous. The risk of your loss is devastating.
Martha Harris Myron CPA PFS CFP (USA)
TEP is Director of Tax Services at Patterson Partners Ltd providing
integrated cross-border tax, estate, investment advisory and related
strategic planning services through entities in Bermuda and the United
State. She is a member of the American Citizens Abroad Professional Tax
Advisory Council. http://www.aca.ch For additional information, please contact mmyron@patterson-partners.com or call 296 3528 www.patterson-partners.com
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