New scam: Get your free stimulus money now!

States are targeting cheats who offer stimulus checks in exchange for bank data or small downpayments.

By , Staff writer

The postcard mailed to thousands of Americans played on a similar theme: They got their chunk of the stimulus package. Here’s a chance to get yours.

Dial the 1-800 number on the card and this is what you hear: “If you’ve been reading the papers, you know that our government has recently released over $700 billion into the private sector. What you probably don’t know is that there is another $300 billion that must be given away this year to people just like you.”

Since the stimulus bill passed in February, there’s been a proliferation of mailers and websites pretending that there’s millions in stimulus money to be had – if you move fast enough.

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By May, government investigators had located 1,400 websites that sported an IRS logo as part of stimulus-related frauds intended to obtain personal information that could be used to empty bank or credit card accounts.

“All you have to do is flap the word ‘federal’ along with a name and domain name and there you go: A one-stop shop to scam the American public by posing as the government,” says Robert Siciliano, a security analyst for Intelius.com, an information security company.

So great is the lure of free money that police in Fort Lauderdale, Fla., even borrowed the swindle idea to nab fugitives. They sent mailers to some law-breakers asking them to come and collect their stimulus checks. “Operation Show Me The Money” got results: Seventy-four people with outstanding criminal warrants showed up to find not a check, but a pair of handcuffs waiting.

Nabbing the scammers

A group of state attorney generals are now filing lawsuits and putting out warnings about the stimulus frauds.

North Carolina has focused on a company called the Grant Writers Institute that promised up to $25,000 in government grants for a $1,000 investment. The principals of the company have said the scam is the result of a few rogue former employees who stole company data to set up a fake firm.

“There is absolutely no guarantee of a grant from the government and particularly individual grants,” North Carolina Attorney General Roy Cooper told Phoenix TV station KPHA recently. “They take a thread of truth and weave a blanket of deception. The thread of truth is that there is federal stimulus money out there. The deception is that very little of it goes to individuals and particularly not in the way they describe it.”

Personal stimulus money?

Whoa, hold up. So there is a way to get some personal stimulus from the $787 Recovery Act of 2009?

Yes, “average Americans” may indeed be eligible for some extra greenbacks apart from the $250 in checks sent to millions of Americans via the Veterans Administration, Social Security Administration and Railroad Retirement agency.

Mr. Cooper’s “thread of truth” most likely refers to stimulus-connected grants and loans from the Small Business Administration and various new education initiatives. (See www.grants.gov.)

So far, the most empowering personal grants may be expanded Pell Grants for single moms, meaning up to an extra $300 for especially needy recipients, such as single moms.

Most working Americans are already seeing an extra $15 bucks per pay cycle thanks to a tax break. There’s also the $8,000 first home buyer credit, an expanded health coverage tax credit, expanded unemployment benefits, lower COBRA payments and, of course, the just-expired "Cash for Clunkers" program.

Still, some Americans have received unexpected government largesse, courtesy of the stimulus bill.

There’s currently an investigation into how dozens of prisoners in Massachusetts and Texas received $250 from the Social Security Administration as part of the stimulus package. Some checks were seized by alert jailers, but some of the cash had already been spent at the commissary.

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