Category: Fraud

UK Government to Scrap National Fraud Reporting Centre

Fraud
UK national fraud and cybercrime reporting centre Action Fraud is being scrapped, the government said in its Beating Crime Plan. This comes after an undercover investigation by The Times in 2019 revealed that the centre’s telephone handlers were being trained to mislead victims into thinking their cases would be investigated, while they were almost never looked at. According to the newspaper, as few as one-in-50 reports actually led to a fraudster being caught and that only one-in-200 police officers were assigned to fraud investigations. This prompted the Home Office to commission a review of fraud policing in the UK, led…

Covid-19 Support Could Cost U.K. Taxpayers Billions in Fraud and Error

Fraud
The UK’s House of Commons Public Accounts Committee has estimated that fraud and error related to Covid-19 support schemes could cost UK taxpayers billions of pounds. In a new report focusing on fraud and error relating to government support schemes, the committee said undetected fraud and error resulted in losses to the public purse of around £25 billion a year. This amount could be doubled through fraud relating to Covid support, with evidence from the Cabinet Office suggesting that fraudulent claims for Universal Credit, furlough and the Bounce Back Loan Scheme could add up to losses of more than £30bn.…

Deutsche Bank Enabled Massive US Ponzi Scheme

Fraud, Prosecutions
Deutsche Bank AG is accused of turning a blind eye to a years-long Ponzi scheme that involved fraudulent investments in Florida, expanding the growing list of legal and compliance headaches for Chief Executive Officer Christian Sewing. Liquidators of two now-bankrupt Cayman Islands investment funds sued the bank in New York and Florida, claiming it “enabled theft on a massive scale” that led to hundreds of millions of dollars in losses, court records show. Deutsche Bank maintained accounts for entities involved in the scheme despite repeated red flags and SEC sanctions against them, and it failed to enforce its own rules…

Money Laundering Case Against Lionel Messi Dismissed

Fraud, Money Laundering, Prosecutions
Fresh allegations accusing top footballer Lionel Messi of fraud, embezzlement and money laundering have been dismissed by a Spanish court. The national court ruled that after two years of investigation “no criminal act on the part of the people targeted by the complaint could be proven,” Agence France-Presse news agency reported. Federico Rettori, an Argentine national living in Spain, claimed he formerly worked for Messi’s charity and alleged funds received by the foundation which should have been directed to social causes went instead “towards various private activities or bank accounts that differed from those that were declared by the foundation”.…

Former U.S President Trump’s company, longtime CFO Weisselberg charged with tax fraud

Fraud, Tax Evasion
Manhattan District Attorney Cyrus Vance has charged former President Donald Trump’s company, the Trump Organization, and his longtime CFO Allen Weisselberg with tax fraud, according to an indictment unsealed Thursday in New York. The charges are the first brought by New York prosecutors in the case since they launched their investigation nearly two years ago into the financial dealings of Trump, his company, his family, and associates. Weisselberg and the company pleaded not guilty to criminal charges including grand larceny in the second degree as outlined in a lengthy indictment unsealed in Manhattan State Supreme Court. Weisselberg was released on…

COVID-19: The evolution of scams in Asia-Pacific

Fraud
In 2020, one in three people in Southeast Asia experienced online fraud amid a boom in online shopping and activity due to the COVID-19 pandemic. Asia-Pacific already has the highest number of internet users in the world, so the opportunities for scammers were already aplenty before the crisis of 2020. The pandemic-influenced increase in online activities has served as the perfect backdrop for increasingly nuanced racketeering efforts by financial crime syndicates who targeted everything from the boom in deliveries, to interest in the stock market and even the vaccine program to fleece consumers. In Indonesia, online fraud made up the…

A significant High Court judgment that brokers took bribes to push allegedly ruinous loans to farmers

Bribery, Fraud
A significant High Court judgment that brokers took bribes to push allegedly ruinous loans to farmers has fuelled campaigners’ demands for a change in approach to financial crime in our region. Spates of evictions and land-grabs scarred Britain as it exited the 2008 financial crash. A crisis of ‘bad’ debts, repossessions, cases of homelessness and even suicides engulfed farmers, builders, property developers and small-scale entrepreneurs of all types across the UK and Ireland. Some banks were later found to be asset-stripping borrowers, ostensibly to ensure their own survival. Not all the alleged debtors gave up though, with some turning detective…

Two Individuals Indicted for Money Laundering Related to Odebrecht Bribery and Fraud Scheme

Bribery, Fraud, Prosecutions
Bank Executives Charged with Conspiring to Launder Hundreds of Millions of Dollars Through U.S. Financial System Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Peter Weinzierl and Alexander Waldstein, both citizens of Austria, for their roles in a scheme to launder hundreds of millions of dollars through the U.S. financial system on behalf of Odebrecht S.A. (Odebrecht), a Brazil-based global construction conglomerate, in order to pay bribes around the world and defraud the Brazilian government. Weinzierl was arrested earlier today in the United Kingdom pursuant to a provisional arrest request from the United States. Waldstein remains…

SFO publishes Annual Business Plan 2021/22

Fraud
The Serious Fraud Office has today published its Business Plan for 2021/22. The Business Plan details how the SFO will deliver on its mission to fight complex economic crime, deliver justice for victims and protect the UK’s reputation as a safe place to do business. To realise this ambition, the 2021/22 Business Plan describes the action we will take in four priority areas of operations, people, stakeholders, and technology. Together, these actions will contribute towards the SFO’s strategic objectives: To investigate and prosecute the most serious or complex cases of fraud, bribery and corruption. To uphold the rule of law,…

Former Netflix executive convicted of fraud after orchestrating more than $500,000 in bribes and kickbacks

Fraud
Ex-Netflix IT chief Michael Kail on Friday was convicted of 28 counts of fraud and money laundering. Kail created a “pay-to-play” scheme, taking bribes and kickbacks from tech startups hoping to do business with Netflix. Kail, who was indicted in 2018, must also forfeit a Los Gatos home he purchased with the funds. Former Netflix vice president of IT Michael Kail was convicted by a federal jury on Friday of 28 counts of fraud and money laundering, the US Department of Justice announced in a press release. Kail, who was indicted in 2018, used his position to create a “pay-to-play”…

Fighting fraud during the pandemic

Fraud
The City of London Police are the national policing lead for fraud and run Action Fraud and the National Fraud Intelligence Bureau. Action Fraud has received 6,073 reports of coronavirus related fraud and cyber crime since 01 March 2020, resulting in losses of £34.5m. Dedicated national fraud units have made over 150 arrests and taken down over 2,000 websites, phone numbers and email addresses linked to frauds since the pandemic began. The City of London Police has arrested 156 criminals believed to have been committing fraud during the national restrictions imposed as a result of the coronavirus pandemic. Data released…

John McAfee charged with securities fraud for ‘pump and dump’ cryptocurrency scheme

Fraud
John McAfee has been charged with securities fraud over a “pump and dump” cryptocurrency scheme. Federal prosecutors unsealed a case against McAfee and his executive advisor and bodyguard Jimmy Gale Watson Jr., claiming the pair earned nearly $2 million by urging Twitter followers to invest in cryptocurrencies like Reddcoin and Dogecoin, then selling off their own holdings as the price rose. “McAfee and Watson exploited a widely used social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception,” said US Attorney Audrey Strauss in a statement. “The defendants allegedly used McAfee’s…

Money launderers ‘prey on generation Covid’

Fraud, Money Laundering
Criminals are seizing on young people’s Covid-related financial troubles to hire them to unwittingly launder money, experts say. More than four in 10 cases of money mules involved victims aged 21 to 30, with the numbers rising last year, fraud prevention service Cifas said. Banks said criminals posted fake job adverts on social media, targeting “generation Covid” struggling for work. It is part of a wider trend of fraudsters exploiting the crisis. ‘Fake job adverts’ Criminals want to move money through accounts to make it look less suspicious to banks. Money mules are given a cut for allowing their account…

Finance industry and police team up to stop over £45 million of fraud in 2020

Fraud
Staff working in bank, building society and post office branches stopped £45.3 million of fraud through the Banking Protocol in 2020. The scheme has prevented victims from losing £142 million of fraud and led to 843 arrests since its launch. Over 7,800 emergency calls were made last year, protecting customers from losing an average of £5,749 each to criminals. Branch staff at banks, building societies and Post Offices worked with the police to stop £45.3 million of fraud through the Banking Protocol rapid scam response last year, bringing the total amount of fraud prevented to £142 million since the beginning…

Frankenstein fraud, deepfakes & replay attacks

Fraud
Online fraud has accelerated during the coronavirus pandemic, meaning organisations must be more vigilant in the face of the seemingly ever-increasing threat and its impact on business The coronavirus pandemic has had a big impact on many areas of our lives, not least our relationship with the office. Organisations have had their hands forced when it comes to accelerating digital transformation, while digitally identifying and onboarding both customers and employees has pulled focus on the digital identity sector. It’s good news for digital ID specialists, but the flipside is it’s also a huge opportunity for cybercriminals engaging in identity fraud.…

FICO: 5 Fraud Predictions for 2021

Fraud
With 2020 seeing an increase in cybersecurity concerns due to the COVID-19 pandemic, partly due to the influx of people now working from home as well as an increase in the use of digital services, many are left wondering what 2021 will bring. Matt Cox is Managing Director, EMEA Fraud, Cyber and Compliance at FICO, a company that uses predictive analytics and data science to improve operational decisions. Matt has over 20 years of experience within the financial services industry, specialising in fraud and financial crime. Here Matt looks ahead with his fraud predictions for 2021. Predicting the future is…

Fraud Epidemic ‘is now National Security Threat’

Fraud
This paper explores the impact of fraud on the UK’s national security landscape, and sets out the case for adopting a fundamentally different pathway for responding to the problem. Download the paper here (PDF) Fraud against UK citizens, businesses and the UK public purse has reached epidemic levels – it is the ‘volume crime of our time’. Driven in part by growing public disquiet over the current response to fraud, 2020 saw increased political attention on the issue. The prevailing political narrative, however, fails to convey the full impact of fraud on the UK, beyond the perspective of financial losses…

Three arrests in money laundering, romance fraud and bounce back loan scam investigation

Fraud, Money Laundering
The National Crime Agency’s Complex Financial Crime Team has arrested three suspected members of an organised crime group involved in high level money laundering and fraud. The two men and one woman , aged 48, 43 and 45, were detained yesterday following raids at properties in the Bexleyheath and Dartford areas of London. They were questioned and have been released pending further investigation. This action is part of a wider operation targeting global fraud and the subsequent movement of money taken from victims. The alleged offending involves large scale identity theft, and the use of numerous false bank accounts to…

COVID increases fraud rate by 60%

Fraud
Top 3 Global Fraud Contributors in 2020: Card cloning, High-Speed Ordering/Spending, and High-Risk Merchant Category Code 34% increase in card cloning fraud rate across industries and regions 13% increase in sporting goods purchases compared to last holiday season due to social distancing and prohibited indoor gatherings 36% decrease in fuel purchases compared to Q1 and 89% Drop in Transportation Sector Transactions 75% of customers plan to maintain new digital banking habits SAN MATEO, Calif., Nov. 24, 2020 (GLOBE NEWSWIRE) — Feedzai, the world’s leading risk management platform, has announced its Quarterly Financial Crime Report which contains financial crime indicators and…

Criminals exploit Covid-19 as fraud moves increasingly online

Fraud
Unauthorised fraud fell by eight per cent to £374.3 million in first half of 2020, as the banking industry prevented £853 million of losses. Criminals are exploiting and adapting to Covid-19 with a rise in online data harvesting and a fall in cheque and contactless card fraud. £207.8 million was lost to Authorised Push Payment (APP) fraud, in line with the same period last year. Finance providers were able to return £73.1 million of APP fraud losses to victims, up 86 per cent compared to last year. £47.9 million of losses were reimbursed to victims under APP voluntary Code in first…

INSIGHT: U.K. Tax Authority Getting Ready to Bite on Evasion

Compliance, Corruption, Fraud, Investigation
The U.K. tax authority is indicating its intention to enforce legislation and investigate corporations for failure to prevent tax evasion. Mukul Chawla QC and Kate Ison of Bryan Cave Leighton Paisner LLP review the current status of inquiries and discuss what action organizations need to take to ensure their procedures are robust and compliant. The focus by HM Revenue & Customs (HMRC) on organizations, under the Criminal Finances Act 2017, for the corporate offense of failure to prevent tax evasion, appears to be making steady progress. The number of investigations and inquiries that HMRC is currently undertaking, and the wide…

What are the repercussions if a financial services firm is found guilty of facilitating tax evasion?

Corruption, Fraud, Investigation
The offence of failure to prevent the facilitation of tax evasion (also known as the Corporate Criminal Offence or CCO) was introduced with great fanfare following the government initiative; ‘No Safe Havens’, which was part of an international initiative to increase tax transparency. As of 31 July 2020, HMRC announced that they had 10 CCO investigations open and a further 22 ‘opportunities under review’, meaning that HMRC are considering whether to open an investigation. Within these 32 investigations or ‘opportunities’, HMRC have disclosed that over a third relate to businesses within the financial sector. Businesses in the financial sector are…

Eight-year NCA investigation denies organised crime group £17 million property portfolio

Drug Trafficking, Fraud, Money Laundering
Fifty nine properties worth an estimated £17 million have been recovered following National Crime Agency investigations into a prolific organised crime group carried out over almost a decade. In addition to a successful criminal investigation, the NCA conducted four linked civil recovery investigations over an eight-and-a-half year period into dozens of individuals who were suspected of financial links to drug dealers in East Birmingham. NCA officers established that the properties were acquired using the proceeds of crime including heroin importation and distribution, fraud and money laundering. Alam and Ameran Zeb Khan have both been convicted of drug trafficking offences, the…

FURLOUGH FRAUD AND THE FINANCE ACT 2020

Fraud
The Coronavirus Job Retention Scheme (the “Furlough Scheme”) The coronavirus pandemic (COVID-19) detrimentally impacted not just public health, the NHS and other vital public services, but the economy as a whole.  The impact of the “lockdown” was that overnight a lot of businesses closed or experienced unparalleled revenue shrinkages. This placed jobs at risk. If employers could no longer generate revenue then they could no longer keep on employees.  The spectre of redundancy loomed.  In response, the government introduced The Coronavirus Job Retention Scheme (the ‘Furlough Scheme’). Instead of mass redundancy, businesses could retain staff, as an alternative to redundancy. …