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fraud

The USA's Internal Revenue Service has issued a notice relating to a spam scam that is prevalent as companies prepare tax information for employees (see US tax authorities warn of increasingly effective phishing spam-scam. It has also issued an explanation of how some fraudsters operate.

Mariyah Chernykh, 26, gives her address as in Ontario, Canada but she is a Russian citizen. She and several others have pleaded guilty to a fraud that ties her and several others to a murderous attack on an in-house seminar being conducted in San Bernardino, California. The case demonstrates that assessment of suspicion should not be based on obvious, close, circumstances and the relevance of Know Your Customer rather than the narrow aspects of so-called Customer Due Diligence.

Case Summary: 

Right from the days of snake oil potions and the Carbolic Smokeball Company, charlatans have sold fake pharma to the gullible and the desperate. Amongst the most desperate, and the most gullible, are those who believed the claims by a company that it had a herbal preparation that increased length and girth of the penis and increased sexual performance. As a herbal preparation, the product sidestepped US Food and Drug Administration approval. Thousands of customers who paid a substantial amount for the tablets complained they did not work as advertised, or at all. The Department of Justice and other agencies had to take a look.

Type of conduct: 
Money Laundering

In recent weeks, we've seen a significant number of spam-scams from a domain that is remarkably similar to an official UK government domain, showing that registrars and hosts are failing to identify obviously fraudulent customers. The fraudulent domain name is close enough to the real thing to fool many targets.

CoNet Section: 

The benefits that flow to Google, Bing, etc. from linking to illegal websites are substantial. So are the benefits gained by internet hosts, especially those providing anonymous or anonymising services for a fee (e.g. Cloudflare) and the internet domain registrars that facilitate the purchase and anonymisation of domains by criminals. In this article, we start the list of domains and those who benefit from providing services to them. Registered users can add their own examples of genuinely illegal websites in the comments.

CoNet Section: 

Ontario Oil and Gas Limited (sometimes reported as "Ontario Oil and Gas Nigeria Limited"), a Nigerian company, is the vehicle by which Mrs Adaoha UGO-NNADI and Walter WAGBATSOMA committed fuel subsidy fraud in Nigeria. The pair, and their company, have been convicted. Then things started to go weird. One of them is one of 16 people charged with various offences including money laundering in an entirely unrelated case.

Just last weekend, one of our people received a call late at night. An Indian voice asked him for details of his credit card and for his security question. That call was genuine, from his bank's fraud department, but for an estimated 15,000 US taxpayers, the department calling was all about committing not preventing fraud.

FCRO Subsection: 
Case Summary: 

A man has been convicted of bankruptcy fraud after a five-year scheme that used fraudulent bankruptcy petitions to bring him a return of approximately USD3 million.

Type of conduct: 
Insolvency offences

The Australian Securities and Investments Commission has permanently banned the owner and sole director of an insurance brokerage from the financial services industry. Christopher John Griggs of Chris Griggs Insurance Offices Pty Ltd, Mount Pleasant, South Australia, forged documents and applied for credit using the names of third parties without their knowledge.

BIScom Subsection: 

In the UK, there is an epidemic of advertising and other forms of marketing by companies who then pass leads to firms ( which, these days, are often companies not firms) of solicitors. Their advertising is annoying and sometimes misleading; but there are practices that are downright unethical and borderline (or perhaps over the border) illegal. Can the practice be prevented? Perhaps it's time to wind back the clock on fee sharing.

CoNet Section: 
Case Summary: 

Valery BOGOMOLNY, 44, (male) of Westwood, Los Angeles, has been convicted of multiple counts of healthcare fraud, sentenced to five years jail and ordered to pay more than USD1.2 million in compensation. At its heart, the case is a documents fraud.

Type of conduct: 
Healthcare / Medicare fraud

In the past few hours, a high-volume phishing scam, purporting to be from Bank Negara Malaysia, has hit inboxes. That is it a scam is without doubt: the outgoing addresses are all, in common with many such scams, .edu addresses. They contain a PDF file, BNM.pdf, as an attachment which does not trigger anti-virus warnings when it is delivered to inboxes.

BIScom Subsection: 
Case Summary: 

Nikolai Tehin was an immigrant to the USA from Russia. He found ways to pay his own way through the long and expensive process of qualifying as a lawyer. For more than 30 years, he represented a wide range of clients and enjoyed the rewards, including a house worth some USD8 million in 2004, a 73-foot yacht and a number of expensive cars. But he funded his lifestyle from illegally dipping into clients' funds.

Type of conduct: 
Fiduciary fraud

On or about 2 May, Indian businessman Vijay Mallya left India for the UK to spend more time with his family. Meanwhile, investigations into his financial dealings have continued and, in late April, Indian authorities issued a warrant for his arrest and revoked his passport. He is not, however, stateless: a passport is a document evidencing the right to travel and its revocation does not affect his Indian citizenship. Where do such cases leave financial institutions?

FCRO Subsection: 

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