Category: General News & Cases

Lastest news concerning AML from press releases and publications

  • 22.01.10 Fraud losses cost the UK £30bn a year

    Fraud

    Fraud – including scams, online theft, insurance cheats and tax fraud – costs the UK £30bn a year, according to an official estimate.

    The National Fraud Authority (NFA) has calculated the figure for the first time and said it equated to £621 per adult in the UK. Some 58% of fraud was in the public sector, at a cost of £17bn, it added.

    It said the losses were paid for through taxes and rising prices of products and services.  The highest sector was losses from tax fraud – estimated at £15.2bn – although this was only 3% of tax liabilities, the NFA said.

    According to the NFA, which is part of the UK Attorney General’s Office, some 31% of losses came in the private sector, with the financial services sector suffering the biggest hit.

    It lost an estimated £3.8bn, including £1bn in mortgage fraud. This has prompted the City watchdog, the Financial Services Authority, to take a tougher stance against the crime, with a number of brokers having been fined and banned from the industry.

    Another £2bn was lost to insurance fraud, and the remainder came from fraudsters targeting online banking, cheques, and plastic cards.

    The consumer goods industry lost an estimated £1.3bn a year. Manufacturing suffered losses of £1bn a year, and technology, media and telecommunications lost £948m.

    Consumers have also been tricked out of an estimated £3.5bn a year in share, lottery and loan scams. Some 12% of all fraud was suffered by individual consumers.

    “Although the figure appears on the face of it far greater than the previous estimate, we know this is because we have included many additional figures that other studies have not,” said NFA chief executive Bernard Herdan.

    “With this vital information we can develop clearer priorities to prevent, detect and deter fraudsters. We will use the data to help identify those areas of fraud that cause the most harm to the UK economy”.

    Visit the BTC website for compliance help and support for firms in the regulated sector

  • 15.01.10 Hunslet Man Arrested for Money Laundering

    A 35-year-old Hunslet man has been arrested on suspicion of money laundering as part of an investigation involving the City and Holbeck Proceeds of Crime Team and the Holbeck Neighbourhood Policing Team (NPT).

    Police officers and police community support officers (PCSOs) from the NPT entered the unemployed man’s home yesterday afternoon using a warrant obtained under the Theft Act, as part of an investigation into handling stolen goods.

    Inside the property officers found a large number of high-quality electrical goods including a plasma television, stereo system, laptops and computer equipment, and kitchen items, worth thousands of pounds. The man was also found to have £5,200 in cash in his coat pocket.

    The man was able to produce receipts for the items, but these were all paid for in cash and he is believed to have been unemployed for a number of years.  He was arrested on suspicion of money laundering, and after being interviewed he was bailed pending further enquiries.

    The cash has been seized by the Proceeds of Crime Team, who will now carry out an investigation into the man’s lifestyle to determine how he has acquired his assets without a declared income.

    If it can be proved that these assets have been acquired through criminality, the Team can then apply to confiscate them under the Proceeds of Crime Act 2002.

    Why Should They?
    Detective Sergeant Tom Walsh of the City and Holbeck Proceeds of Crime Team said: “Anyone who has expensive possessions but no obvious income must raise eyebrows among people who earn honest livings in our communities, and I would appeal to these residents to contact the Why Should They? campaign if they have any suspicions about how these people have acquired their assets.”

    The warrant was carried out following information from the community, and Inspector Damien Miller of the Holbeck NPT said: “We’re keen to show local residents that we’re listening and will act on the information they give us. Warrants like this are a great example and I would encourage people to continue contacting us about the issues they want us to tackle.”

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  • 16.09.09 Four arrested connection with a £9m mortgage fraud

    Four men have been arrested by the City of London Police force in connection with a £9m mortgage fraud against a major insurance company.
     
    40 police officers have been involved in the operation in the South-East of England which has led to a number of co-ordinated searches on four houses, the business unit of a gaming company and a solicitor’s office. Police officers have seized documents from the sites searched.  As a result of the raids police have arrested four men on charges of conspiracy to defraud.

    Steve Head, detective chief superintendent at the City of London Police, says the move represents a significant step forward in what has been a complex investigation.

    He says: “The size of the police operation was evidence of the scale of this suspected fraud. It is not just the lenders that are being hit by the fraudsters. Individuals are losing millions and millions of pounds through a range of mortgage frauds, with much of this money being paid into the coffers of criminal networks.”

    He adds: “We have a number of significant investigations ongoing and as lenders and borrowers continue to scrutinise their finances I anticipate many more cases being referred to us in the near future. I would ask anyone who has fallen victim to mortgage fraud to contact the City of London Police. The more we know the more difficult we can make it for those committing this highly damaging crime.”
     
    The Solicitors Regulation Authority has backed the City of London Police’s crackdown on mortgage fraud.

    A spokesperson says: “The SRA works closely with police and other law enforcement organisations to tackle mortgage fraud. Since the start of 2009 the SRA has stepped up its work in relation to mortgage fraud, both through advice and warnings to the profession, and by increasing its detection and investigation resources to prevent, deter and tackle fraud.”

    Visit the BTC website for compliance help and support for firms in the regulated sector

  • 14.09.09 HM Revenue and Customs officers arrested 21 people in raids in a multi million pound construction industry fraud.

    The twenty one arrests, consisting of eighteen men and three women, were made covering areas as diverse as the West Midlands, Staffordshire, London and Greater Manchester. The suspects were arrested on suspicion of conspiracy to ‘cheat the public revenue’ and ‘money laundering’ offences amounting to over £6 m. They were questioned by HMRC criminal investigators at various UK police stations.

    The plot centers on a complicated conspiracy through a version of ‘missing trader’ fraud which sees the creation of a contrived chain of companies, which claim to subcontract labour for the construction industry, with the sole intention of disappearing before paying the taxes due are payable under the ‘Construction Industry Scheme’ (CIS) to HMRC. These organised criminal gangs, in a bid to steal millions of pounds, pocket the money and hijack legitimate companies along the way.

    This conspiracy exploits individuals working in the construction industry and it is believed thousands of construction site workers may have been robbed of the tax and national insurance contributions they have had deducted under the CIS scheme over the last six years.

    Adrian Farley, Assistant Director of Criminal Investigation for HMRC, said: “Today’s arrests are the result of strenuous efforts by our teams of dedicated officers to disrupt the sophisticated scams of organised crime gangs behind money laundering activities. This conspiracy by a number of contractors is believed to have resulted in the theft of over £6 million from the public purse, depriving vital public services of much needed investment. We are committed to bringing them to justice and to deprive them of the proceeds of their crime.”

    Visit the BTC website for compliance help and support for firms in the regulated sector

  • 10.09.09 Serious Fraud Office (SFO) launches investigation into JJB and Sports Direct

    Following an OFT investigation into the sports retail market, it has been announced that the Serious Fraud Office (SFO) has now begun its own investigations into JJB Sports and Sports Direct.

    JJB Sports revealed that it had stated its concerns about possible cartel activity in its market to the OFT which in turn has been granted immunity from any financial penalty in the event that competition rules have been broken.

    The investigation follows an approach made by JJB to the OFT on January 30, following the suspension of its then chief executive Chris Ronnie. JJB asked at that time;

    “for immunity pursuant to the OFT’s leniency programme in relation to a suspected agreement or concerted practice to dampen competition in the sports retail market in the period from 8 June 2007 to 25 March 2009, being the period in which the former chief executive, Mr Christopher Ronnie, was employed by the company.”

    JJB did not name any other individuals or companies in its statement today. However, there was frequent speculation during Ronnie’s tenure about the nature of his relationship with Sports Direct and its founder Mike Ashley for whom Ronnie formerly worked.

    OFT officers visited JJB at its Wigan head office this morning. It may be “some years” before the OFT investigation is complete. The retailer said in a released statement

    “that in the event that any subsequent immunity agreement, is withdrawn as a result of JJB’s non-compliance with the conditions or as a result of JJB’s evidence being materially undermined in particular circumstances, and an infringement decision is issued by the OFT, JJB “may be liable for a fine from the OFT of up to a maximum amount of 10% of the Group’s turnover”.

    Visit the BTC website for compliance help and support for firms in the regulated sector

  • 08.09.09 Accountant jailed for eight years for tax fraud

    John Warman who holds no qualifications to be an accountant, operated a sole practitioner practice dealing with the affairs of a number of clients. He conspired to steal £2.5m from HMRC was told by the Judge that he lived in a ‘fantasy world’ as he jailed him for eight years. John Warman drove a £165,000 Bentley Arnage and led a lifestyle of the pretence that he had substantial capital in the bank.

    Judge Andrew Hamilton sentenced 70-year-old Warman, of West Bridgford, at Derby Crown Court. He told Warman, who was a self-employed accountant, that he was simply interested in using his clients to feather his own nest.

    He said: “You cleverly manipulated the finances of clients in such a way that you provided yourself with a very comfortable lifestyle and could not possibly have afforded the running costs of the Bentley on his income. You ran it because you lived in this fantasy world. You took in everybody you ever dealt with.”

    John Warman connived with his client, Simon Fields, who was a property tycoon to manipulate his tax returns to evade paying tax and then to pocket the proceeds.

    Simon Fields, 34, of Trowell Road, Wollaton, pleaded guilty to one count of cheating the public finances to the tune of £392,000 by manipulating his business accounts. He was found guilty of one charge of conspiracy to ‘cheat the revenue’.

    Warman was found guilty of that same charge and a further 28 others which 14 of them were for ‘cheating the Revenue’ and 14 further offences of obtaining money by deception. Both defendants had conspired to understate the profits from Fields’ property empire, and that of his father, Roger Fields, which John  Warman also managed the tax affairs of through his practice, stealing a further £1.5m due in tax revenues.

    False accounts had been prepared showing a “reduced income” and an “increased expenditure” by understating the amount received for renting out the properties, and then overstating the interest paid on loans and the amount paid for repairs and renewals. These false statements were then submitted to HM Revenue & Customs, lying about the level of profit that had been made over a eight-year period from April, 1996, to April, 2004.

    Warman had also acted alone in manipulating the accounts for a second time, stealing more than £1m by further corrupting the business accounts of Roger Fields. He also stole £80,000 from three other Nottingham businesses; a farmer, a firm of solicitors and a transport company.

    Visit the BTC website for compliance help and support for firms in the regulated sector

  • 20.08.09 HMRC has published its Code of Practice for supervisory purposes for visits to businesses under Money Laundering Regulations (COP28).

    HMRC has published its Code of Practice for supervisory purposes for visits to businesses under Money Laundering Regulations (COP28). This Code of Practice tells you what you can expect from HMRC Supervisory staff and what they expect of you when they visit your business under the Money Laundering Regulations 2007.

    The type of businesses that is required to register with HMRC under the Money Laundering Regulations and be supervised accordingly are;

    • Money Service Businesses
    • Trust or Company Service Providers
    • Accountancy Service Providers
    • High Value Dealers

    The focus of the visit will be on your business’s risk sensitive anti-money laundering policies and procedures to make sure they successfully manage and reduce the money laundering and terrorist financing risks faced by your business.

    During a visit HMRC supervisory staff we will always:

    • check that the information held on the HMRC register is correct
    • check that the right people within Money Service Businesses and Trust or Company Service Providers have undergone the fit and proper test
    • ask you to explain how your risk sensitive anti-money laundering policies and procedures work
    • answer any questions you have on your legal responsibilities under anti- money laundering legislation
    • look at your risk assessment of the business’s customers, products and services
    • look at the anti-money laundering policies, procedures and training you have implemented to manage and reduce the risks you have identified.

    They may also:

    • examine transaction records and related documents to check that the customer due diligence measures have been adequately applied
    • evaluate your systems for identifying and reporting suspicious activity to the Serious Organised Crime Agency
    • check that your staff are aware of the law relating to money laundering and terrorist financing and are sufficiently trained to recognise and deal with suspicious activity
    • ensure you have adequate systems in place to manage your compliance with the Money Laundering Regulations 2007.

    If you are a Money Service Business or High Value Dealer HMRC may inspect any cash found on the premises.

    The full document can be downloaded in PDF format by clicking on the following link  HMRC Guidance COP28

    Visit the BTC website for compliance help and support for firms in the regulated sector.

  • 05.08.09 Passwords stolen for tax returns

    HMRC self Assessment

    Gangs are stealing taxpayers’ passwords and submitting claims for tax refunds to be paid to them, HM Revenue and Customs has warned.

    A series of attempted fraudulent claims through the self-assessment repayments system has been discovered.

    No figures have been released outlining the extent of the fraud, but a HMRC spokesman said this was a new method of trying to extract money.

    He urged people to ensure passwords sent to them by HMRC were kept secure.

    “They should treat these details as carefully as they would a Pin for their bank account,” he said.

    Attempt
    More than 9.5 million taxpayers are in the self-assessment system, which was changed this year to encourage more people to submit their details via the internet.

    Two-thirds of all filings for 2007-08 were submitted via the internet, rather than on paper.

    When people apply to use the system they are sent a password through the mail which is then used when the taxpayer logs onto the HMRC website over the following 30 days.

    However, fraudsters have been getting hold of these passwords and other personal details. This could have been by stealing the mail, tricking people out of the details or even finding the letters discarded in bins.

    They then used these details to make fraudulent repayment claims, requesting funds be sent to other bank accounts.

    The HMRC spokesman said this was different from so-called phishing e-mails which pretended to be from the tax authority and aimed to discover taxpayers’ banking details so their accounts could be raided.

    Liability for any losses would be judged on a case-by-case basis, he added.

  • 04.08.09 FSA bans Cornwall broker for fraud

    The FSA has banned Cornwall mortgage broker Stephen Sanders for submitting at least three mortgage applications on behalf of customers which he knew contained false and misleading income information.

    Sanders withheld information from a prospective employer relating to an investigation into him by his former employer which resulted in his suspension. He also failed to disclose to the FSA that he was the subject of an ongoing disciplinary investigation into his conduct by his former employer when applying to the FSA to perform a controlled function.

    For the first customer mortgage application, the income as stated in the mortgage application, was substantively higher that that declared by the customer to HM Revenue & Customs (HMRC). In the second mortgage application the income stated in a mortgage application included some of the income of the customer’s parents which was falsely described as his own. And in the third case there were discrepancies in the application about the income sources of the two customers who were making a joint application.

    Margaret Cole, director of enforcement at the FSA, said: “Sanders submitted mortgage applications which he knew to be false and this posed a serious risk to lenders and confidence in the financial system. Our work on mortgage fraud continues as a priority in our campaign against financial crime.”

    She added: “We have banned more than 60 mortgage brokers over the last three years and we will continue to ban such people to reinforce the message that knowingly giving false and misleading information to prospective lenders is dishonest. Approved persons must also be open and honest with the FSA and prospective employers about their circumstances. Behaviour which shows lack of honesty and integrity will result in a ban.”

    Visit the BTC website for compliance help and support for firms in the regulated sector

  • 03.08.09 Identity fraud soars in 2009

    New Cifas stats paint bleak picture for the UK’s financial institutions and card companies.

    Identity fraud surged by nearly three quarters in the first half of the year, driven by continued malicious online activity, and the economic slowdown, according to new figures from UK fraud prevention service Cifas.

    The organisation was set up to facilitate the sharing of information on identified fraud between its members – which include banks, card companies and insurance firms – in an attempt to prevent further rises in all types of fraud, including online.

    It said identity fraud, which includes victims of impersonation as well as the creation of fictitious identities by fraudsters, rose 74 per cent in the first six months of 2009 to over 100,000 cases.

    Facility take over fraud – where the fraudster gains access to a user’s account and siphons off funds – rose 40 per cent during the period with over 11,000 cases registered.

    There was some good for fraud departments however, with Cifas reporting an 11 per cent year-on-year increase in the financial losses avoided through the fraud data sharing of its members.

    “The rise in the numbers of victims, and these very specific types of fraud demonstrate that fraudsters have no regard for economic, social and personal fragility,” argued Cifas chief exeutive Peter Hurst.

    “While we all look for solutions to the hardships imposed by the current climate, however, these figures focus attention sharply on what responsible businesses and public sector organisations can achieve through sharing data on proven frauds to reduce losses and ease the burden of the recession upon us all. ”

    Although not broken out in the survey, it’s believed that much fraudulent activity committed today is card not present (CNP), including online, fraud.

    Visit the BTC website for compliance help and support for firms in the regulated sector