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Here’s your chance to view our monthly newsletter that we send out to our AMLAC LinkedIn group with the latest updates in money laundering compliance and fraud prevention and deterrence. Remember, to join our AMLAC LinkedIn group and update your email addresses on LinkedIn in order to receive it on an ongoing basis. Enjoy!
http://www.iirusa.com/upload/wysiwyg/AMLAC_Jan_Newsletter.html
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We've got the latest pole from the Amlac LinkedIn Group. Take a second to give your opinion.
The question is:
Is regulatory compliance more of a concern because of our economic state?
Participate in the poll here.
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The New York Times reports today on the large amounts of individuals who have been caught running Ponzi schemes earning the title of mini-Madoffs. According to the article, some of these schemes have been operating for years, and others are far more recent. A deteriorating economy and heightened skepticism about outsize returns after the revelations about Mr. Madoff has broght these cons to light. Read more and share with us your thoughts on the mini-Madoffs.
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Freep.com reports that James R. Rosendall Jr, the former vice president for Houston-based Synagro Technologies, walked into a U.S. District Court in Detroit and pleaded guilty to bribing Detroit officials. Rosendall mentioned to Judge Avern Cohn that city officials expected him to give them things for their support, and that he provided the officials these offerings.
According to the report Rosendall faces up to 11 months in prison and a fine of up to $200,000.
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Michael Vick, former NFL quarterback who is currently serving prison time, is suing his financial adviser Mary Roy Wong $2 million for fraud, breach of contract, breach of fiduciary duty, conversion and negligence.
Part of the suit alleges that:
Wong made a transfer of $650,000 from Vick’s bank account into that of Williams and Bullocks; put the $175,000 proceeds from another Vick investment into the company; and made a $200,000 transfer from an account for which Vick is a trustee, subjecting the account to penalties.
For more on the lawsuit, read here.
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Ricardo Figuerado has surrendered to authorities early yesterday morning in connection with a multi-million dollar scheme that misappropriate funds from customer accounts, according to the U.S. attorney for the Southern District of Florida. Figuerado misappropriated more than $11 million in customer funds for personal investments in Guatemala, Spain and elsewhere, and more than $1 million in customer funds “to support his lavish lifestyle,” according to a news release. Figuerado faces up to 30 years in jail if convicted.
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According to this article in StarTribune.com Carolyn Louper-Morris and her son William John Morris Jr are facing federal fraud and conspiracy charges after alleledgely collecting more than $2 million in state tax refunds that were meant for lower income families. The mother and son run an online tutoring business called Cyber 101.
Carolyn and William told families that they wouldn’t have to pay for the program if they allowed the business to file a tax return and claim the Minnesota Education Tax Credit. The U.S. District Court has charged the pair with one count of mail/wire fraud conspiracy, seven counts of wire fraud, four counts of mail fraud, one count of conspiracy to commit money laundering and four counts of promotion money laundering.
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Joseph Forte, the operator of a Ponzi scheme, was charged with mail fraud yesterday by the Security and Exchange Commission. He could face up to 20 years in prison.
He operated his Ponzi scheme by the system mailing quarterly investment reports as the primary method for misrepresenting his trade performance to individual investors.
For more information, read the Philadelphia Business Journal.
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In a report filed at GAAP Web, the amount of fraud in the UK increased 14%. Fraud in 2007 amounted to £1.04 billion and increased to £1.19 billion of fraud in 2008. It also rose 83% to £788 million in the financial and insurance sectors. For more on the story, read the article here.
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According to this post on sourcewire.com law firms and individual solictors will face greater pressure for KYC compliance in 2009 as money laundering charges have increased over the years.
Datanomic Ltd, compliance and screening specialists believe that enterprise screening and the screening of internal employees, third party contractors, as well as external partners will help protect against money laundering. There is no doubt that AML regulations must tighten because of the recent credit crunch.
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Kevin Bacon and Kira Sedgwick were two of the victims in last month's Madoff fraud. In the $50 billion scheme, Bacon lost everything except for his house and the money in his bank account. For more information read the San Francisco Gate.
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BankTech reports that Banco Santander, the Spanish bank that recently acquired Sovereign Bancorp, has decided to implement Anti-Money Laundering software from Norkom Technologies.
This deal marks Norkom’s entry into the Spanish financial services market, and it will also help
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Massachusetts Secretary of State William Galvin filed a fraud case against Reserve Management Co. The company was making allegedly making false statements about its plans to support the Reserve Primary Fund's net-asset value around the time it "broke the buck" in September. The net asset value of fell below $1 to $.97 following the bankruptcy of Lehman Brothers. The $62 billion Primary Fund collapsed. For more information, read the article at the Wall Street Journal or Business Week.
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In Alabama, a sheriff can literally take food from the prisoner's plate to line their pocket. Sounds pretty corrupt. It was barely legal by the Alabama law; however, Sheriff Greg Bartlett was swiftly sent to jail when it was discovered that he pocketed nearly $212,000 over the past 3 years by this amoral practice. Read more on the New York Times article.
As a fraud specialist, what do you think of this? We'd love to hear your thoughts here or on LinkedIn group.
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Asia Times Online reports that accounting practices for the Satyam fraud case should have been easily spotted. This comes from top accountants in Mumbai who said, "It appears from information available in the public domain that basic accounting procedures were not followed." This aligns closely with the Madoff scandal who also had dubious accounting practices that didn't go noticed until too late. When will the due diligence begin on large companies? Let us know your thoughts here or on our LinkedIn Group.
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Charles G. Martin and John E. Walsh were both arrested earlier in the week for wire fraud. The two ran One World Capital Group, which was closed in December by the government who also froze the remaining assets of the firm. The two posed as foreign currency traders and used a "ponzi-like" scheme to divert customer money out of the bank into their pockets to finance a lavish lifestyle. For more on the story, read here.
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Indian mega company, Satyam Computer Services admitted to hugely inflating its earnings and assets for years. The news of this company, who serves more than one third of Fortune 500 companies, threw Indian markets in turmoil. According to The New York Times, the chairman of the company admitted that 50.4 billion rupees, or $1.04 billion, of the 53.6 billion rupees in cash and bank loans the company listed in assets for its second quarter, which ended in September, were nonexistent.
Because of Satyam's relationship with major Fortune 500 companies, this news will drastically impact the business of outsourcing to India. But just how much? We'll wait and see.
What do you think will be the ripple effects of this fraud? Comment here or on LinkedIn.
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Reuters recently reported that E*Trade Financial Corp was fined $1 million because of the company’s failure to have adequate anti-money laundering procedures detect suspicious trades.
According to the brokerage regulator, E*Trade failed to provide the necessary automated tools to detect suspicious trading activity during the periods of January 2003 through May 2007. The reasoning behind this is because the company relied too heavily on its own employees to monitor these problems, when there were more than 110,000 trades daily. Clearly, this was too much for E*Trade to handle without an automated AML system in place.
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Security analysts have disclosed that Islamic terrorist organizations are using online gambling websites to launder money for attacks on the West. According to Telegraph.co.uk, computer experts in al-Qaeda have created an "online University of Jihad" that is recruiting and training potential terrorists in Britain without them having to risk travelling to camps in Pakistan.
The target audience for this organization is a 17 year old male who has never been in battle but is intrigued by the ideas of al-Qaeda and wants to feel a part of something. Moderate Muslims are encouraged to report any suspicious activity on the forums or gambling sites to the authorities.
For more information on this, please visit the article referenced by clicking this link.
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Florida, has proven to be a safe haven for individuals on Medicaid. A new report just released outlines that the
Attorney General’s Medicaid Fraud Control Unit recovered over $56.7 million during fiscal year 2007-2008, which includes court judgments, fines and civil penalties
Fraud investigations included identity theft from individuals participating in the Medicaid program. The report also outlined other policies that Florida has done to eradicate fraud within the Medicaid program.
Bravo, Florida! Let's hope that other states in the Union follow suit.
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