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Carrick man charged in tsunami relief scam
Friday, January 14, 2005

In the first arrest in a nationwide crackdown on tsunami relief scams, the FBI took a Carrick man into custody yesterday morning on charges of flooding the Internet with spam solicitations for a bogus relief fund so he could pay to fix his car.

  
KDKA-TV
Matthew Z. Schmieder
Matthew Z. Schmieder, 24, who lives in a rented brick duplex on Crailo Street, admitted to the FBI that he sent out 800,000 e-mails purporting to be from the Mercy Corps, an international group of humanitarian agencies, according to an affidavit.

Schmieder confessed to lifting images from the Mercy Corps Web site to use in spam messages and trying to fool donors into sending him money through a PayPal account he established, the FBI said.

He got $150 from one donor.

"Unfortunately, unscrupulous people will try to profit from tragic events like the recent tsunami disaster," the relief organization said in a statement. "Immediately upon learning of this scam, Mercy Corps worked directly with federal authorities to help shut down the fraudulent operation within a few hours."

When agents arrested Schmieder at his apartment yesterday, he initially said he "thought it would be OK to keep the funds for his own use if he gave some of the contributions to charity," wrote FBI Agent Marc Southland.

"Subsequently, Schmieder stated that he intended to use the money to fix his car and to pay some bills because 'everybody needs money.' "

Schmieder hardly has any of that, according to court papers and brief testimony in U.S. District Court, where he was arraigned yesterday on a fraud charge.

He said he earned between $500 and $600 last year on painting jobs with his brother, but he is currently unemployed and paying $200 in rent on his rundown flat. When asked if he had any money available to him, he said, "I have $48."

U.S. Magistrate Robert Mitchell said he will appoint a lawyer at government expense and released Schmieder on a $25,000 bond. He also ordered him to stay off the Internet and return Thursday for a preliminary hearing.

FBI Agent Tom Grasso had earlier warned Schmieder that lots of reporters would be on hand for his arraignment, and afterward Schmieder left the courthouse without saying anything.

When asked for comment, he only shook his head. His brother also attended the hearing but refused to comment.

The FBI had recently sent out warnings about tsunami relief scams and said it was investigating dozens of bogus Web sites that prey on potential donors by mimicking sites of well-known charities.

Earlier this week, Grasso told USA Today that the FBI was working with relief agencies and Internet companies to shut down bogus Web sites related to the tsunami.

All manner of schemes have been reported to the FBI's Internet Crime Complaint Center, and the bureau promised to go after "those who would attempt to victimize philanthropic individuals."

The online solicitations come in many forms, including those similar to the Nigerian "419" advance-fee scam in which unsuspecting marks in the United States are asked to help a bogus African official regain millions from some misappropriated bank account.

Tsunami-related swindles are surfacing worldwide.

Mercy Corps said this was the first time it had been victimized by a scammer but warned donors to be wary.

"We encourage everyone to be extremely cautious of any suspicious e-mails that request donations claiming to be from Mercy Corps or other legitimate relief organizations," the organization said.

First published on January 14, 2005 at 12:00 am
Torsten Ove can be reached at tove@post-gazette.com or 412-263-2620.
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