War Crimes at Home

The war in Iraq and the specter of terrorism at home are creating a fertile environment for scams that exploit fear and uncertainty.

"Crooks read the newspapers and whatever the headlines say, their scams are tailored to the news," David A. Cohen, chief enforcement attorney in Wisconsin's Division of Securities, told the AARP Bulletin.

Public officials and consumer watchdog groups are warning Americans to be on red alert for a variety of rackets and rip-offs that play off today's news. A sampling:

PROFITING FROM FEAR.

Some companies capitalize on public anxiety to peddle their products. In New York State "the Laboratories of BioFend" implied that a terrorist attack was imminent to sell "crisis kits" to residents of Buffalo, just weeks after the arrest of six suspected al Qaeda terrorists living nearby.

Assistant State Attorney General James Morrissey says BioFend left frightening recorded telephone messages to sell kits containing potassium iodide, pills sold over the counter to help prevent cancer caused by radiation. "People were outraged and scared," Morrissey says of BioFend, which a state court shut down.

CHARITABLE CHISELING.

Many groups are now seeking donations for Iraqi relief efforts and families of war casualties. Inevitably, there are people who will exploit the crisis—as they did after the 9/11 attacks—to line their own pockets.

Phony charities issue phone and e-mail appeals heavy on emotion but light on information about themselves and their plans for collected funds.

GET-RICH-QUICK DEALS.

Pitches to investors "to get in while the market is good" are on the rise, especially for oil and gas schemes that rely on the Iraq conflict to boost costs—and profits.

Don't count on it. "You could be buying at the highest point if you buy now," says Heather Murphy of the Arizona Corporation Commission. She says beware, too, of investing in small companies that tout revolutionary anti-terrorist technologies or products.

To avoid becoming a casualty of any war scam, consumer advocates advise approaching pitches with skepticism. And do your homework—unless the organization is legitimate and reputable, save your money.