Archive for category: Fraud Awareness

Fraud Spotlight: Money Laundering

On December 13, 2022, Danske Bank, Denmark’s largest bank, plead guilty to one count of conspiracy to commit bank fraud and agreed to forfeit $2 billion to settle a long-running investigation involving billions of dollars in illicit transactions. Under the plea agreement, the bank will also be placed on probation for three years.

The Copenhagen-based bank came under investigation in 2018 shortly after it disclosed that more than $200 billion of largely illicit funds had flowed from Russia and other former Soviet states through its Estonia branch. In court filings, the bank admitted to defrauding U.S banks between 2008 and 2016. The Estonia branch, now closed, funneled approximately $236 billion in funds from high-risk clients in Russia and other countries through the U.S. financial system.

Dankse Bank: Estonia Branch

Dankse Bank Estonia created a lucrative business line serving non-resident customers known as the Non-Resident Customer (NRP) program. According to prosecutors, the Estonia branch enticed clients by telling them they could transfer large amounts of money with little, if any, oversight through the NRP program. The United States Department of Justice (DOJ) also revealed that the bank’s employees conspired with NRP customers and worked to hide the illicit transactions by using shell corporations to obscure ownership of the funds.

As a result, Russian clients and other high-risk clients were able to gain access to U.S. banks and pump billions of dollars of suspicious and criminal funds through the U.S. financial system. Danske Bank Estonia collectively processed approximately $160 billion through U.S. banks.

As a result of internal audits, information from regulators, and an internal whistleblower, Danske Bank became aware of the Estonia branch’s highly suspicious and potentially criminal transactions by at least February 2014. Danske Bank was also aware that its Estonia branch lacked adequate controls for anti-money laundering and didn’t meet its standards.

According to the DOJ, instead of providing truthful information, Danske Bank lied to U.S. banks about its weak anti-money laundering systems, inadequate monitoring capabilities, and its high-risk, offshore customer base to gain access to the U.S. financial system.

Plea Agreements & Settlements

Danske Bank has accepted responsibility for defrauding U.S. financial institutions and for funneling billions of dollars in suspicious, illicit transactions through the United States. As a part of their guilty plea, Danske Bank will forfeit over $2 billion and implement significant changes to its compliance program and anti-money laundering controls.

In addition to its criminal plea and settlement with the DOJ, the bank has also coordinated settlements with the U.S. Securities and Exchange Commission (SEC) and with Denmark’s Special Crime Unit. The SEC’s complaint specifically charges Danske Bank with violating the antifraud provisions of the Securities Exchange Act of 1934.

The DOJ has said it will credit the $850 million needed to resolve the SEC and Danish probes, and as a result, Danske Bank will pay $1.2 billion to the U.S. Department of Justice.

The Investigation Continues

As of December 2022, no individuals have been charged. However, according to the DOJ, the investigation is continuing. In a phone interview with Reuters, the Assistant United States Attorney General for the DOJ, Kenneth Polite, stated: “Focusing on individual accountability is always a priority, not just for this case, but for all of our corporate resolutions.”

The plea agreement with the DOJ marks the first time the United States has taken action against Denmark’s biggest bank in what has now become one of the world’s largest money laundering scandals. Polite told Reuters that the Danske case is now one of the top five largest financial institution resolutions the DOJ has reached in the last decade.

To read the U.S. Department of Justices’ official press release about the money laundering scheme, click here.

Check back with Fact Finder Forensics as we continue shining a light on fraud.

#fraudweek #factfinderforensics

As International Fraud Week comes to a close, it is only right that we celebrate the wonderful work done by the Association of Certified Fraud Examiners (ACFE), the world’s largest anti-fraud organization and leading provider of anti-fraud training and education.

The ACFE has played a fundamental role in improving fraud detection and preventing fraud worldwide through its dedicated education efforts. The ACFE first established Fraud Week in 2000 as a means to fight fraud. This annual devotion of time every third week in November to improve fraud awareness and provide anti-fraud education has not only united organizations globally against fraud—but it has also helped countless business leaders, employees, and citizens to proactively prevent fraud in the workplace and in their everyday lives. Join us in commending the ACFE for their tireless commitment to fraud detection and prevention!

Though it may be the end of this year’s International Fraud Week, it is not the end of the fight against fraud. As a proud supporter of Fraud Week, we encourage you to take a look at our compilation of fraud awareness materials highlighted this week to combat fraud.

Elder Financial Exploitation

Financial elder abuse is a fast-growing, underreported crime against older adults. It is the theft or embezzlement of money or any property from a senior. This is a serious form of abuse as it can leave elderly persons unable to take care of themselves and provide for their needs.

Here are key signs that a senior loved one is being financially exploited:

• Unexplainable or significant withdrawals from financial accounts
• The addition of names to a senior’s card
• Sudden changes to their financial condition
• Missing cash, checkbooks, debit cards, or credit cards
• Unpaid bills despite having enough money
• Variation in signatures on documents and checks
• Unusual changes to wills, power of attorney, or other legal documents
• Assets mysteriously transferred
• Payments for goods or services they do not use
• A secretive relationship with someone online
• Appearance of a stranger who forms a new, close relationship and offers to manage finances or assets
• A caregiver, relative, or another person seems to restrict their communications and isolate them from contact with others

Remember: fraudsters aren’t always strangers. Caregivers, friends, and even other family members can take advantage of an older adult’s trust. Find more resources for financial elder abuse at https://www.justice.gov/archives/stopfraud-archive/elder-fraud-and-financial-exploitation.

Real Estate Fraud

Where there are large sums of money being transferred, scammers will appear in droves. Unfortunately, fraud is only increasing in real estate transactions, especially with remote deals becoming more common. The top real estate scams include:

• Wire Fraud
• Foreclosure Relief Scams
• Mortgage Scams
• Home Inspection Scams
• Rental Scams
• Deed or Title Fraud
• Commercial Real Estate Fraud (advance fee schemes, misappropriation of funds, falsified documents, etc.)

Read the full article at https://www.linkedin.com/pulse/fraud-awareness-real-estate-fact-finder-forensics-inc?trk=organization_guest_main-feed-card_feed-article-content

Recognizing & Reporting Fraud in the Workplace

No matter your role, industry, or level of seniority—you can help the fight against fraud by knowing the common types of workplace fraud, recognizing the signs, and reporting it.

The most common types of workplace fraud include: payroll fraud, asset misappropriation, financial statement fraud, and corruption. Business owners and employees are the first line of defense against fraud. Every person protect their workplace by recognizing the signs. Here are some classic red flags seen in workplace fraud:

• Complain constantly, take shortcuts, and try to beat the system
• Irritable, secretive, suspicious
• Hoard information and won’t relinquish a duty
• Living beyond means
• Working longs hours without taking leave or holiday
• Experiencing financial difficulties, gambling debt, or substance abuse

Read the full article at https://factfinderforensics.com/2022/11/17/fraud-awareness-recognizing-reporting-workplace-fraud/

Whistleblower Process & Resources

Whistleblowers are champions in the fight against fraud and they are imperative to safeguarding businesses from the growing fraud problem. Many employees will observe fraud, wrongdoing, or misconduct at their workplace. Individuals should never feel pressured to cover up illegal acts, stay quiet, and not report misconduct out of fear.

According to the ACFE’s Occupational Fraud 2022 Report to the Nations, tips are the most common way frauds are detected. Having an anonymous email or phone hotline has been found to foster even more tips. In fact, 47% of frauds at companies were detected through an anonymous fraud reporting mechanism like a hotline. If a hotline isn’t available to you, try:

• Writing an anonymous letter to your organization’s internal audit team or anti-fraud team, if applicable.
• Anonymously reporting it to the board of directors or the board’s audit committee, if applicable.
• Or directly submitting a tip at the whistleblower program that is relevant to your information (False Claims Act, SEC Whistleblower Program, IRS Whistleblower Program)

Every employee, regardless of position, can help prevent fraud. While a majority of employees and employers are honest, if you observe something that isn’t right, it may be necessary to take action.

Read the full article at https://factfinderforensics.com/2022/11/17/fraud-awareness-whistleblower-process-resources/

Money Laundering Through Video Games

Technology has long offered multiple channels for fraudulent activity, but what may come as a surprise is the rapid expansion of money laundering through online video games. Since it is incredibly popular to acquire in-demand merchandise and sell them to other players for profit, in-game items suddenly have real-life monetary value and cybercriminals are taking full advantage of this virtual marketplace.

Read more about the full process of how criminals launder money through online video games at…

Spread Fraud Awareness

A little awareness can go a long way. Being aware of the signs of fraud and recognizing fraudulent schemes is critical to prevention. Share educational resources with family, friends, and co-workers to remain vigilant and help the fight against fraud.

#fraudweek #factfinderforensics

As Fraud Week continues, Fact Finder Forensics is highlighting the importance of whistleblowers and the process of whistleblowing. Whistleblowers are champions in the fight against fraud and they are imperative to safeguarding businesses from the growing fraud problem.

Many employees will observe fraud, wrongdoing, or misconduct at their workplace. Individuals should never feel pressured to cover up illegal acts, stay quiet, and not report misconduct out of fear. From everyday workers to upper management, the majority of people will come forward to report fraud and expose unlawful conduct.

Whistleblowing is a legally protected act, in which employer retaliation is prohibited in addition to adverse employment actions caused by whistleblowing. The decision to become a whistleblower is not an easy one. Often these individuals love their jobs and do not want to cause harm to their company. However, unscrupulous companies are counting on this.

If you suspect of wrongdoing or know of fraud being committed by your employer, fellow employee, or another entity—you can take steps to stop it. Learn what you can do with that information and help fight fraud.

Who Can Be a Whistleblower?

Becoming a whistleblower is one way for authorities to become aware of practices that violate the law, cheat investors, steal taxpayer funds, and more. Anyone with specific, detailed information about fraudulent activity can become a whistleblower, qualify for protection, and in some instances, receive rewards. Whistleblowers are usually employees of the organization that is violating the law. However whistleblowers can be anyone with concrete evidence of wrongdoing.

The Process

To become a whistleblower, you will need specific, detailed information and to file a claim with the program that protects against the specific type of fraud you are reporting. The most commonly filed government programs for fraud include: the False Claims Act (FCA), the SEC Whistleblower Program, and the IRS Whistleblower Program.

The statue of limitations, procedure, and protections vary depending on the program you are planning to file under. Whistleblower cases will follow a general timeline: a complaint is filed, an investigation takes place, cases are brought to trial, and resolutions and settlements are reached.

False Claims Act (FCA)

The False Claims Act, also known as the “Lincoln Law,” is a whistleblower law that allows citizens to sue companies or individuals that are defrauding the government. It makes it illegal for anyone to make false claims to receive benefits or funds from the government through a federally-funded program. The FCA provides financial rewards for whistleblowers as well as job protection against retaliation. However, it requires that whistleblowers use lawyers to file these qui tam lawsuits. Violations that can be reported include:

• Creating a false statement to get a claim paid
• Presenting a false claim for payment
• Reverse false claims
• Reducing amount of the money owed to government
• failing to return an overpayment

SEC Whistleblower Program

The SEC Whistleblower Program provides incentives to individuals who report violations in U.S. financial markets and businesses. This could include accounting fraud, securities fraud, consumer fraud, and more. The program allows individuals to submit information anonymously. However, it requires whistleblowers to obtain counsel, who will submit the information anonymously on the whistleblower’s behalf.

Find more resources on the program at https://www.sec.gov/whistleblower/resources

IRS Whistleblower Program

IRS Whistleblower Program provides rewards and protections to individuals who report and provide information about tax fraud or tax underpayments by their employers or other. The IRS keeps the identities of tax whistleblowers confidential with certain limitations.

Find more resources on the program at https://www.irs.gov/compliance/whistleblower-office#moreinfo

Fraud Hotlines & Other Reporting Options

According to the ACFE’s Occupational Fraud 2022 Report to the Nations, tips are the most common way frauds are detected. Having an anonymous email or phone hotline has been found to allow for even more tips. In fact, 47% of frauds at companies were detected through an anonymous fraud reporting mechanism like a hotline. If a hotline isn’t available to you, try:

• Writing an anonymous letter to your organization’s internal audit team or anti-fraud team, if applicable.
• Anonymously reporting it to the board of directors or the board’s audit committee, if applicable.
• Or directly submitting a tip at the whistleblower program that is relevant to your information.

Every employee, regardless of position, can help prevent fraud. While a majority of employees and employers are honest, if you observe something that isn’t right, it may be necessary to take action.

Here at Fact Finder Forensics, we are making our best effort to create awareness useful to all viewers this week. Today’s Topic is Trending Real Estate Scams 2022.

Seems like everyone is talking about interest rates and housing prices but not a lot of focus on the risk associated with being a hot topic. So, we are tackling Real Estate Fraud. Here are the top 7 Current Scams:

Wire Fraud – You are in the process of buying a home and you receive an email, text, or phone call from someone claiming to be from the title company, mortgage company, or real estate brokerage providing you instructions on where to wire your escrow funds. The swindler creates a fake website that appears nearly identical to the title or lending company that you are working with, making their website look legitimate.

Foreclosure Relief Scams – If you are experiencing a difficult time, please visit this website: https://home.treasury.gov/data/troubled-assets-relief-program/housing/beware-of-scams

Mortgage Scams – Mortgage fraud is typically carried out for profit or for housing.

• Mortgage scams for profit: Those who attempt mortgage fraud for financial gain are typically lenders, brokers and other entities that make false claims in order to obtain monetary compensation or equity from lenders and homeowners.
• Mortgage scams for housing: Mortgage scams for housing are generally perpetrated by borrowers in order to gain ownership or change the appraised value of a home. According to the mortgage fraud index, one in 200 refinance applicants and one in 164 mortgage applicants have indications of fraud.

 

Home Inspection Scams – Yes, because buying real estate is not hard enough, now you have to worry about the step that is your security blanket.

Typical Home Inspection Scams:

1. You only get a visual inspection of your home.
2. They don’t really check the condition of your roof.
3. They don’t have any training.
4. They are really working for your real estate agent.
5. There are hidden costs.
6. No experience with new homes.
7. They won’t give a guarantee.
8. They don’t have E&O Insurance.
9. They don’t know local building codes.
10. They damage the home.

 

Rental Scams – Scammers often advertise rentals that don’t exist or aren’t available to trick people into sending money before they find out the truth.

Deed or Title Fraud – When someone steals your home through forging a deed or other means of illegally transferring ownership of your property.

Commercial Real Estate Fraud – Commercial real estate fraud schemes are often complex and can take on many forms.

1. Misappropriation of funds
2. Advance fee schemes
3. Misrepresentations such as submitting falsified documents, making false statements, or providing fraudulent statements

 

For resources on how to report and prevent Re al Estate Fraud, visit STOP FRAUD: https://www.justice.gov/archives/stopfraud-archive/resources-victims