The minister and the FBI

By Duncan Campbell

Posted on 10 May 2007 at 09:25

Landslide computer files record that on 10 May 1998, Jason Little of New Orleans paid $49.95 to Landslide using a Bank of Ceylon credit card. The card really belonged to Mangala Samaraweera, the Minister of Telecommunications and Media in Sri Lanka. He called in the country's Chief of Police, who complained to the FBI. It was the first omen as to the nature of much of the business going through Landslide.

An international FBI investigation soon established that the minister had been carded both by Landslide Inc and by another US scam portal, Dakotah Marketing and Research (DMR). A year later, DMR collapsed amid a mountain of millions of dollars of chargebacks demanded by credit card firms.

According to personal emails found on the home computer of Landslide Inc's owner, Thomas Reedy, he first spotted systematic frauds late one night in August 1998. 'We were very lucky,' he told a friend in an email, 'I was running over the logs late one evening and saw something funny.' What he noticed was that streams of different credit cards were being signed up in batches from the same internet address to the same website.

Reedy quickly traced the source of the traffic to Pakistan-based webmaster Imran Mirza and his 'Rare Nude Celebs' website. They 'had someone or someones run the cc#'s thru (sic) to credit their site with funds,' Reedy wrote. 'In just the three days that they were doing it to us, they ran over $14,000 worth of charges thru.'

The computer files reveal that Reedy then set out to protect himself against fraud by setting up a new web service called Badcard.com. He wrote software to block the armies of carders by trapping card numbers coming from the same internet address, and drew up checklists of addresses and card numbers he suspected were in the hands of criminals.

Optimistic that he had cut off the web cheats, Reedy launched an expensive new web service called Keyz in 1998. Unlike his previous adult services, where a user paid a one-off fee to access many porn sites, Keyz charged up to $29.95 for access to a single site. Reedy offered to pass 65% of the proceeds to webmasters and promoted the new service with the slogan: Keyz will 'turn your website into a MONEY machine'.

The Landslide computer records seen by PC Pro show that Keyz was a money machine - but for fraudsters. Reedy didn't notice, and bragged about the Badcard security system to other companies: 'Landslide, Inc is so confident that we can reduce the number of chargebacks at your site we over (sic) a full refund if you are not completely satisfied. What do you have to lose?'

'Everything,' was the answer. Reedy's Badcard system didn't work well enough. Fraudsters started switching internet addresses with each new, false sign-up. Within nine months, Landslide was dead in the water.

Reedy is now in US federal prison, serving a 180-year sentence for allowing Keyz to be used for child porn trafficking.

Click here to continue to part six

Part 1: Fatal flaws in Operation Ore - the full story
Part 2: The secret videotape
Part 3: Carding rackets
Part 4: The Soprano Connection
Part 5: The minister and the FBI
Part 6: Wide-scale fraud
Part 7: The rockstar fraudster