Shortly after GKBO began in September, Mocality "started receiving some odd calls" from customers who were confused by pitches to build them websites that came from Google in apparent partnership with Mocality. There was no such partnership and Mocality claimed to discover it was Google lying to its customers to bring them into GKBO.

Google has released a statement which we have included at the end of the article after the jump.

Mocality did some pretty deep forensics on their traffic and discovered a specific IP, which used a Kenyan ISP and utlized the latest Chrome build, was extensively accessing their business listings. So on December 21, they re-directed a percentage of the inquiries from that IP to a page that gave a different phone number - one that connected to the Mocality call center. The calls that came in were startling.

Here's an example, a call from someone identifying himself as Douglas, from Google Kenya, who tells the person who answered the phone, whom he believes is a business owner using Mocality, that Google and Mocality are collaborating on a new website service. Another call, available here in transcript, has the speaker accusing Mocality itself of fraud. They estimated the team identified as Google Kenya made 20-25 calls per hour to Mocality customers.

After a Christmas break, Magdalinski said there were no more instances of access from that IP. Instead, a new trend started from an Indian IP which belongs to Google. The calls began again, but this time from India. Here's an example, starring a caller named "Deepthi."

"It looks like Google has now outsourced the Getting Kenya Businesses Online operation to India!" wrote Magdalinski. He continued:

"When we started this investigation, I thought that we'd catch a rogue call-centre employee, point out to Google that they were violating our Terms and conditions (sections 9.12 and 9.17, amongst others), someone would get a slap on the wrist, and life would continue.

"I did not expect to find a human-powered, systematic, months-long, fraudulent (falsely claiming to be collaborating with us, and worse) attempt to undermine our business, being perpetrated from call centres on 2 continents."

We contacted Joseph Mucheru, Google's senior lead for Sub-Saharan Africa. We met and interviewed him in October in his office at Google's Nairobi headquarters where we talked, among other things, about the GKBO program. We have yet to hear back from him. We also contacted Magdalinski. If either respond, we will update this article.

Forbes reported that Google's policy manager for Africa, Ory Okholloh, said the company would make a statement by the end of the day. It is the end of the day in Kenya and all we have been able to get is a boilerplate line from Google's corporate PR department.

"These are clearly very serious allegations, and we are doing everything possible to investigate them."

Other publications, including The Register, have carried a different statement.

"We're aware that a company in Kenya has accused us of using some of their publicly available customer data without permission. We are investigating the matter and will have more information as soon as possible."

Clearly, Google is looking to shift the focus onto the fact that the information in Mocality's database was user generated. However, as Magdalinski notes on his Twitter account, "The real issue is not taking 30% of our 'publicly available db' - it's what was said to our customers on the calls."

UPDATE: Here is the statement from Nelson Mattos, Vice-President for Product and Engineering, Europe and Emerging Markets:

"We were mortified to learn that a team of people working on a Google project improperly used Mocality's data and misrepresented our relationship with Mocality to encourage customers to create new websites. We've already unreservedly apologized to Mocality. We're still investigating exactly how this happened, and as soon as we have all the facts, we'll be taking the appropriate action with the people involved."

As Matt McGee notes on Marketing Land:

"The statement doesn't specifically say that Google itself was doing the scraping and attempting to contact Mocality's customers. By saying 'a team of people working on a Google project,' Google keeps open the possibility of placing responsibility for the incident on third party contractors - which is similar to what happened last week when Google said that ad agencies were responsible for a poorly-executed sponsored blog post campaign for Google Chrome."

During my conversation with Mucheru in October, he spoke of GKBO as a Google program, conducted by the Kenya office he oversees, and not by a contracted group. If this was inaccurate, I hope he will correct it in his response to ReadWriteWeb's questions.

The sites were used to "defraud the investing public into purchasing stocks that were being manipulated by participants in the conspiracy," according to a statement by the Manhattan U.S. Attorney's office.

Suckers? Maybe, Maybe Not

Before you laugh, thinking to yourself "there's a sucker born every minute," let's remember - there are, in fact, legitimate businesses that do the same thing these scammers were doing in their fraud scheme.

StockTwits, for example, is an online community of investors where users sign in with their Twitter account to keep track of stock-related news. The service pulls in tweets tagged with a $ before a stock symbol (ex.: $AAPL). And in June of this year, CNN Money and MarketWatch began using the service to curate tweets for syndication via website widgets. In August, StockTwits partnered with SecondMarket to track private stocks, too.

Competing service FINIF Financial Informatics, does something similar - it gathers sentiment reports in real-time from SEC filings, news headlines and Twitter. FINIF scans all recent Twitter updates that reference a stock symbol and then measures the sentiment using a custom word list to create the "sentiment score" for a given stock.

Plenty of smart and savvy investors use services like these to augment their research into various stocks. In other words, getting investment advice via Twitter isn't as dumb as you may think.

The trick is knowing when that advice is worth acting on. For those duped out of the $7 million, the penny stocks touted as "good bets" by the scammers obviously weren't.

Neither Facebook nor Twitter are commenting on the announcement, according to Reuters (and we've confirmed).

Not all identity theft is through electronic means. Although some of the incidents include cyber fraud, there are still plenty of cases where physical theft, including lost and stolen wallets and checkbooks, is a factor.

But when fighting the ever-growing identity theft problem, technology gives financial institutions an edge. However, leaving the battle entirely in the hands of banks may not be the solution. Despite the anti-fraud technologies and methods financial institutions employ, their customers may be the most important and effective factor in preventing theft. Says James Van Dyke, president and founder of Javelin, "Customers can be just as effective...because one out of two fraud cases is first detected by the customer."

With the new technology from Clickatell SMS Receipts, customers can either verify or cancel transactions as they occur in real-time. If fraud is detected, it will be spotted almost instantly.

Clickatell's solution isn't the first example of SMS technology being used in this manner - earlier this year Barclays Bank implemented a similar service. But Clickatell is already being put to good use. E-Wallet provider Moneybookers is using the service, as is Santam, S1 Corporation, and First National Bank of South Africa. In addition to this fraud prevention service, Clickatell also partners with financial institutions to provide SMS-based banking which allows for balance inquiries, fund transfers, and person-to-person payment services. This sort of technology offers more than just modern-day convenience - it also lets people take advantage of banking services from anywhere in the world, even when they're far away from a branch or ATM.