Thursday, April 30, 2009

AMLAC April Newsletter

Here's the April edition of the newsletter we regularly send out to our AMLAC LinkedIn group members. Remember to join our LinkedIn Group if you haven't so already in order to receive these announcements on a monthly basis. Enjoy!

Read the Newsletter



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Tuesday, April 28, 2009

NYC Attorney Pleads Guilty to Money Laundering Charges

According to this article in Forbes that New York City attorney Marc Dreier will plead guilty to charges of securities fraud, wire fraud, and money laundering. Dreier led a law firm that had many prominent celebrity clients, but he was arrested after hedge funds complained that he was stealing funds from them. He faces up to 30 years to life in prison.



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Friday, April 24, 2009

Cosmo Indicted

As we covered last week, fraudster Nicolas Cosmo was indicted yesterday. Authorities unsealed a 32-count indictment against Cosmo that includes 10 counts of wire fraud and 22 counts of mail fraud. Cosmo claimed Agape solicited investor funds that were used to make short-term bridge loans. Agape received about $413 million from investors, while only about $30 million in loans were made, prosecutors said. According to Bloomberg.com, prosecutors said they are seeking about $413 million in assets which they say are the proceeds of Cosmo’s illegal enterprise, including property on Long Island and accounts in his name at Bank of America Corp.



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Thursday, April 23, 2009

Bank Execs Indicted in Ramsey Town Center Scam

The StarTribune reports that according to an indictment handed out on Wednesday, millions of dollars that lenders thought were going into the Ramsey Town Center project actually went to bank executives who used the money for their own use.

The original project was started nearly a decade ago, and it seems as if the project is nowhere near finished yet. The three defendants named in the indictment face charges of conspiracy, bank fraud, mail fraud, misapplication of bank funds, and money laundering.



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Wednesday, April 22, 2009

Scott Luster sentenced for fraud

Scott Luster, owner of Rate Search Inc, was sentenced six years in prison for mail fraud charges. In addition to defrauding his customers, he failed to pay taxes on $800,000. Read the full story at Fox News Kansas City.



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Monday, April 20, 2009

US Mortgage Fraud Calls for Action

Here's an interesting piece in the editorial section I came across today in The NY Times. This post highlights that although Washington is spending billions to help boost our financial system, it is doing little or nothing to strengthen the government's ability to investigate and prosecute the mortgage frauds that helped cause our economic collapse.

There is though a bipartisan measure which was newly approved by the Senate Judiciary Committee and is now being brought before the full senate. The Fraud Enforcement and Recovery Act of 2009 would expand the number of officials and agents devoted to pursuing financial crimes. The measure involves spending $490 million over the next two years.

Does this warrant the nation's spending?



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Friday, April 17, 2009

Cosmo fraud amounts increase

According to Bloomberg, Nicholas Cosmo swindled investors out of more money than originally believed. Up from $370 million, investigators found out that he defrauded investors around the world from $413 million. Investors came from many countries such as Hong Kong, Germany and Brazil. He has been in jail since January 26, when he was arrested on federal mail charges.



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Thursday, April 16, 2009

NYC Prosecutors Slow to Stop Foreclosure Fraud

According to Jennifer 8. Lee of the New York Times, since 2000, foreclosure fraud in NYC has "surged" but prosecutions of the fraudsters has been slow, at best.

Although mortgage and deed fraud are among the most economically destructive crimes prosecuted by their offices, many potential deed-theft and mortgage-fraud cases are not prosecuted since they are typically complex and time consuming — taking upward of a year.

With the large amount of real estate in New York, this inevitably would be a prime market for housing fraud. It does seem that the amount of fraud could be overwhelming for the city's prosecutors, so what should be done? What systems should be implemented to combat this type of fraud?



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Wednesday, April 15, 2009

DiNapoli Defends Practice Despite Recent Investigations

There has been recent investigations about former state employees receiving kickbacks in exchange for access to pension fund money. This post on WNYC.org discusses how State Comptroller Thomas DiNapoli is defending his current practices by stating that his office has improved its disclosure practices of its placement agents. DiNapoli has mentioned that all deals made are investigated to monitor how much money is being paid and if there is a relationship that can possibly compromise the deal. Another State Comptroller Alan Hevesi has already been indicted on charges that include enterprise corruption, securities fraud, grand larceny, bribery and money laundering.Will this be enough to defend hisDiNapoli's practice?



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Tuesday, April 14, 2009

Late night informercial hosts charged with fraud

David Genger and Linda Woolf of Utah, two hosts from a late night infomercial about how to make a profit from stock trading were charged with fraud. They are accused of defrauding vicitims of millions of dollars as well as persuading seminar participants to buy Teach Me To Trade products. Read the full story here.



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Monday, April 13, 2009

Tech Mahindra Set to Acquire Satyam

Continuing our ongoing coverage of the Satyam fraud case, Tech Mahindra set to acquire controlling stake in the troubled Indian outsourcer. According to vnunet.com, Tech Mahindra, a mid-tier Indian outsourcing firm and the IT arm of congolomerate Mahindra & Mahindra, will have to pay around $600 to gain a controlling stake in troubled Satyam, according to reports.

Read the full story on our recent blogs here:

Satyam Fraud Should Have Been Detected

CBI Files Charges in the Satyam Fraud Case



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Friday, April 10, 2009

China Finance Minister Imposes Executive Pay Cap

The debate about capping executive pay moves to China.

The Ministry announced yesterday that executives' pretax pay of 2008 should be "no more than 90% of the previous year's level"; for those firms whose performance declined during 2008, their executives should expect a big pay cut of 20%."

A sign of changing economic times? China following America's lead? Or America following China's lead before China had a chance to do it?



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Thursday, April 9, 2009

Two Men Indicted for Medicare Fraud and Money-Laudering Scheme

This recent article in Tennessean.com discusses how the FBI have recently indicted two men connected to a health care fraud and money-laundering scheme that totaled nearly $20 million in fraudulent Medicare claims.

According to the FBI, Roberto Sanchez and Javier Sarduy used shell medical-equipment companies to illegally claim and receive payment for Medicare benefits. If convicted, these two men face up to 10 years imprisonment for the healthcare charges and up to 20 years for the money-laundering offenses.



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Tuesday, April 7, 2009

CBI files charges in Satyam fraud case

According to Reuters India, the Central Bureau of Investigation has made charges against 9 people involved in the Satyam fraud case. In a Madoff-esque scheme brothers chairman Ramalinga Raju and Rama Raju, who served at the founder and managing director, respectively and the and ex-chief financial officer Vadlamani Srinivas were arrested in January after founder Raju resigned, saying profits had been overstated for years and assets falsified. What will be come of the brothers Raju and their accomplices? We'd like to hear your thoughts.



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Monday, April 6, 2009

Free Web Seminar: Casinos at Risk: Best Practices for Title 31 and AML Compliance Programs in a Volatile Business Climate

AMLAC in conjunction with KPMG will be hosting a hour long free web seminar on Thursday, May 7,2009 from 1:00PM - 2:00PM EDT. Here's a brief description of the web seminar.

Today’s volatile business climate and the enhanced regulatory environment for casinos has become increasingly difficult for compliance personnel, internal auditors and security personnel. Casinos are finding themselves challenged to stay compliant in an economy conducive to unprecedented levels of risk for internal and external misconduct. How can you be sure your casino is implementing the proper strategy to protect itself from the risks associated with money laundering, terrorist financing, fraud and other financial crimes?

KPMG ForensicSM and IIR’s AMLAC & Fraud Forum have arranged for you to learn how to best prepare your casino for Title 31 examinations straight from the Department of Justice and the IRS.

What You Can Learn By Attending:

  • Are your Title 31 and AML Programs suitable for today’s regulatory environment?
  • What are the expectations of the DOJ and the IRS relative to a Title 31 program?
  • What are your internal and external threats for fraud and misconduct?
  • Considering the future direction of gaming industry regulations, how do you keep your casino pointed in the right direction.
Featured Speakers
Donna Mayer, BSA Technical Advisor (Casinos), IRS
Lester Joseph, Principal Deputy Chief, US Department of Justice
Karen Brown-Wichman, Director of Internal Audit, American Casino and Entertainment Properties (ACEP)
James Dowling, Managing Director, KPMG ForensicSM


Register for the web seminar
Mention priority code G1U2402W1BLOG



© 2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. 25119BOS

KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.

KPMG Forensic is a service mark of KPMG International.



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Friday, April 3, 2009

Austrian CEO accused of Fraud

The New York Times is reporting that that Julius Meinl V has been jailed for fraud, accused of artificially bolstering shares on the Vienna Stock Exchange for has real estate company, Meinl European Land. It is believe that he has defrauded his investors 3 billion euros ($4 billion). For the full story, read here.



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Thursday, April 2, 2009

FBI: Internet Fraud Rates Rose 33% Last Year

Brian Krebs of The Washington Post reports today that the FBI found a 33% increase in online fraud during 2008. This rise in digital crime can be attributed to the beginning of the global recession and the loss of countless jobs across the United States. Krebs reports that, many of the victims who reported fraud to the IC3 were taken in by scam e-mails made to appear as though they were sent by the FBI, falsely claiming that the agency needed the recipient's personal and banking data to investigate a pending financial transaction. For more information on this FBI finding, please visit Krebs original post here.



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Wednesday, April 1, 2009

Fraudulent Day-Trader Faces up to 40 years in prison

According to this article in SeymourHerald.com Dennis Bolze, a Gatlinburg investor, faces up to 40 years in prison and $1.2 million in fines on charges of money laundering and wire fraud. These charges come from allegations that Dennis was running a fraudulent day-trading business, taking on investments to pay off poor clients while taking in a huge profit for himself. If found guilty, he will be held responsible for making restitutions to those who were affected by the scheme.



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