Philippines police arrest four over phone scam

Police in the Philippines working with the US Federal Bureau of Investigation have arrested four people over a premium-line phone scam that targeted customers of the American telecommunications giant AT&T to funnel money to a Saudi-based militant group.
The four arrested last Wednesday in Manila were paid by the same group that the FBI accuses of having funded the November 2008 attacks in Mumbai, the Philippines' Criminal Investigation and Detection Group

(CIDG) said.
The hacking activity resulted in AT&T incurring almost $2m (£1.3) in losses, the CIDG said.
The Philippines police said money from the scams was diverted to accounts of a Saudi-based group that was not identified. India blames Pakistan-based Lashkar-e-Taiba for carrying out the attacks in Mumbai that killed 166 people.
FBI spokeswoman Jenny Shearer said hackers targeted customers of AT&T, not the carrier itself.
Though the FBI declined to give official details of how the group took the money, one person familiar with the situation said that the hackers broke into the phone systems of some AT&T customers and made calls to international premium-rate services whose payments would be diverted.
Such scams are relatively common, often involving bogus premium-service phone lines set up across Eastern Europe, Africa and Asia. Fraudsters make calls to the numbers from hacked business phone systems or mobile phones, then collect their cash and move on before the activity is identified. Telecommunications carriers often end up footing the bill for the charges.
Jan Rasmussen, a spokeswoman for AT&T, said it wrote off some fraudulent charges that appeared on customer bills. She declined to elaborate or comment on the $2m figure.
Earlier last week, AT&T said it was investigating an attempt to access customer information but did not believe any accounts had been breached.
The CIDG said the FBI sought the help of its Anti-Transnational and Cyber Crime Division (ATCCD) in March after it found the Saudi-based group had targeted AT&T using the hackers.
Among the four people arrested was Paul Michael Kwan, 29, whom ATCCD chief Police Senior Superintendent Gilbert Sosa said had been arrested in 2007 after the FBI began an international crackdown on groups suspected of financing militant activities.
Sosa said the Filipinos were being paid by a group originally run by Muhammad Zamir, a Pakistani arrested in Italy in 2007. He said Zamir was a member of Jemaah Islamiah, a Southeast Asian militant network with links to al Qaeda.
"Zamir's group, later tagged by the FBI to be the financial source of the terrorist attack in Mumbai, India, on November 26, 2008, is also the same group that paid Kwan's group of hackers in Manila," Sosa said in the statement.
Last month, Philippine police said weak laws against cybercrime and poor technical capabilities had made the country an attractive base for organised crime syndicates involved in cyber pornography, cyber sex dens, illegal gambling, credit card fraud and identity theft.
One of the biggest worms to affect Windows computers, called "Love Bug", is believed to have been written by a Philippines resident, who despite being identified was never prosecuted because there were then no laws against unleashing the harmful code.

Q & A: Understanding the Saudi-Iran rivalry

Why are Saudi Arabia and Iran rivals?

The rivalry revolves around ethnicity, religion, oil and influence. Saudi Arabia is predominantly Arab and Sunni while Iran is majority Shia and Persian. The former has the largest proven oil reserves in the world. The latter

has the second largest. Both countries consider themselves to be the leader of the Muslim world. Their animosity flared in the wake of the 1979 Iranian revolution. Iran’s newly installed ruling Shia clergy unnerved conservative Sunni Saudi Arabia. Iran’s Ayatollah Ruhollah Khomaini exacerbated matters by criticizing Saudi Arabia for its support of Saddam Hussein during the Iran-Iraq war in the 1980s. While relations between the two countries improved slightly after Ayatollah Khomaini’s death in 1989, they soured again when Iranian President Mahmoud Ahmadinejad came to power in 2005.

What is the evidence of this rivalry?

Before allegations of an assassination plot surfaced, the most prominent evidence of Saudi Arabia and Iran’s rivalry was their efforts to influence the many protests across the Middle East, which has sparked a proxy war for regional dominance. Saudi’s King Abdullah felt so threatened by the democratic revolutions that he announced a series of measures such as raising of public-sector salaries and launching new social programs to shore up stability. While Iran has historically fed off unrest – recent conflicts in Iraq, southern Lebanon and Gaza have increased its power – the protests in Syria, its ally, hit close to home for Mr. Ahmadinejad. The rivalry between Saudi Arabia and Iran was perhaps most keenly felt in Bahrain. When pro-democracy demonstrations erupted, Saudi Arabia sent in troops to crush them, fearing Shia protesters would overthrow Bahrain’s Sunni king.

What are the implications of this plot on this rivalry?

The immediate result with be further entrenchment on both sides of the Saudi-Iran divide. Relations have recently been somewhat strained between the United States and Saudi Arabia over the events of the Arab Spring. The historic alliance between the two countries will undoubtedly strengthen in the face of the alleged Iranian plot. Iran will become further isolated. The stage is set for a potentially dangerous confrontation.

Asian markets creep higher despite nerves

Asian markets were mixed on Tuesday, with Tokyo and Hong Kong edging higher due to an easing of oil price pressures, while traders in mainland China went into sell-off mode.

Tokyo's Nikkei ended the session up 0.19 percent, or 20.17 points, at 10,525.19 and Sydney rose 0.21 percent, or 10.30 points, to 4,808.20, while Hong Kong was up 0.35 percent in the afternoon.

However Shanghai was down 0.15 percent after surging 1.83 percent on Monday, when Chinese officials moved to allay fears of an imminent interest rate hike.

Crude prices slipped after the United States refused to rule out tapping its oil reserves to ease the impact of high oil prices.

The Financial Times also reported that OPEC members Kuwait, the United Arab Emirates and Nigeria were joining Saudi Arabia in raising output to allay fears of a supply crunch.

Their efforts come as markets grow increasingly worried about the possibility that unrest across a swathe of North Africa and the Middle East could start to destabilise oil giant Saudi Arabia.

New York's main contract, light sweet crude for April delivery, fell 70 cents to $104.74 per barrel in Asian trade, while Brent North Sea crude for April dropped 64 cents to $114.40.

"Risk aversion is likely to be the dominant theme until there is reasonable certainty that oil prices can retreat to $90 or below," Ric Spooner, chief market analyst at CMC Markets in Sydney, told Dow Jones Newswires.

"The threat of a permanent rise in oil prices has hit at a time when equity markets were priced on the assumption of solid earnings growth over the next 12 to 18 months.

"Oil at over $100 per barrel for any length of time is likely to lead to reduced expectations for consumer discretionary spending and corporate profitability."

Markets got a weak lead from the United States, where the volatility in Libya and the Middle East spooked Wall Street.

The Dow Jones Industrial Average dropped 0.66 percent, the S&P 500 index fell 0.83 percent and the tech-rich Nasdaq Composite lost 1.40 percent.

Gold prices eased slightly after hitting a new all-time record high of $1,440.32 in London on Monday.

Gold opened at $1,430.80-$1,431.80 an ounce in Hong Kong down from Monday's close of $1,437.00-$1,438.00.

On currency markets, the dollar moved narrowly against the yen, with trading lacklustre.

The euro was supported by anticipation of a likely interest rate rise by the European Central Bank, despite renewed worries about European sovereign debt after Moody's downgraded Greece and yields on Portugal's 10-year bonds hit a euro-era high of 7.5 percent.

The dollar fetched 82.23 yen in Tokyo afternoon trade, little changed from 82.25 yen in New York late Monday.

The euro bought $1.3986 compared with $1.3971. The single European currency was marginally higher at 115.02 yen compared to 114.82 yen.

In other markets:

-- Seoul rose 0.81 percent, or 16.05 points, to 1,996.32.

-- Taipei rose 0.39 percent, or 33.96 points, to 8,747.75.

Leading smartphone maker HTC was 1.38 percent higher at Tw$1,100, while Taiwan Semiconductor Manufacturing Co rose 0.85 percent to Tw$71.5.

-- Manila rose 0.32 percent, or 12.39 points, to 3,898.87 thanks to strong corporate results.

Aboitiz Equity Ventures rose 0.71 percent to 42.75 pesos. DMCI Holdings surged 4.79 percent to 37.20 pesos. Semirara Mining jumped 5.10 percent to 214.20 pesos.

-- Wellington fell 0.30 percent, or 10.28 points, to 3,419.78.

Telecom fell 2.3 percent to NZ$2.10 after a setback in its efforts to lead the country's broadband Internet roll-out.

Mainfreight rose 2.7 percent to NZ$8.82 after it announced it would buy Netherlands-based Wim Bosman Group. Fletcher Building was unchanged at NZ$8.84.