New federal task force to fight fraud

The Obama Administration has created a new task force that will work to combat fraud. It will replace the task force that Bush for the same reason.

U.S. Attorney General Eric Holder stated, "This task force's mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from occurring. By punishing criminals for their actions, we will send a strong message to anyone looking to profit from the misfortunes of others."

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Agility indicted in fraud case

The Denver Post reports that a federal grand jury has indicted a Kuwait- based company for an alleged series of schemes that U.S. officials say amounted to a "massive overcharging" of the U.S. government for food the company provided to soldiers stationed overseas.

According to civil court records, the alleged acts have cost taxpayers more than $1 billion.

The criminal indictment, which was unsealed Monday, accuses the company of conspiracy, major fraud, false statements, submitting false claims and wire fraud.

The publicly traded multinational company does business under the name Agility but was charged under its old name, Public Warehousing Co., or PWC. According to its website, it has 37,000 employees in 120 countries. The company's commercial division, Agility Global Integrated Logistics, has its American offices in Irvine, Calif.

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Former US Congressman Faces 13 Years in Jail

According to this post on IBN Live a former US Congressman William Jefferson has been sentenced to 13 years in jail after being found guilty in August of collecting bribes for personal interests after police found $90,000 stored in his freezer.

Jefferson lost his seat in 2008 elections after voters were completely turned off by all the indictments of bribery and money laundering. In exchange for the bribes Jefferson allegedly led business operations in Africa that included telecommunication deals with countries such as Ghana and Nigeria.

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U.K. Fraud Office Investigates London Hedge Fund Group

The Wall Street Journal reports that London-based hedge fund group, Dynamic Decisions Capital Management Ltd. is being investigated by the U.K. Serious Fraud Office in connection with suspicions about the firm's investment activities in connection with its Cayman Islands-registered fund called Dynamic Decisions Growth Premium Master Fund Ltd.

For more information about the investigation, please click here.

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How will the CARD Act impact AML regulations?

Recently, the prepaid industry has been under heavy scrutiny and with the addition of the Credit Card Accountability, Responsibility and Disclosure Act going into effect on February 22, 2010 even more provisions will apply to gift certificates, store gift cards and general-use prepaid cards. This article from Bankrate.com highlights how expiration and inactivity fees, for example, will be very limited. Customers can not incur inactivity fees on gift cards unless they go unused for a period of over 12 months.

There are however, certain fees that the CARD Act does not protect from like upfront issuance and sales fees. One aspect of fees that the CARD Act is particularly aiming to eliminate is expiration fees. The ACT demands that cards not expire for 5 years after its issuance; many gift cards at this time expire after 1 or 2 years.

What sort of changes do you foresee for AML regulations in the prepaid industry with these new provisions going into effect early next year?

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105 Charged in Wide-Spread Florida Mortgage Fraud

RealEstateChannel.com reports that The Justice Dept. has charged 105 mortgage company representatives, brokers and other individuals in fraudulent schemes that have netted them $400 million in loans on 700 properties in Florida. In the four Florida markets targeted by federal and local law enforcement agencies over a nine-month period, 32 defendants are from Fort Myers, 30 from Tampa, 24 from Jacksonville and 19 from Orlando. Alex Finkelstein reports that this investigation was launched in late January 2009

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Madoff Accountant Pleads Guilty

As predicted last week Bernie Madoff's accountant, David Friehling, has plead guilty this morning to his involvement in Madoff's ponzi scheme. NBC reports that in addition to securities fraud, Friehling was also charged with investment adviser fraud, making false filings to the Securities and Exchange Commission and obstructing the IRS.

Friehling becomes the second known Madoff associate to cooperate in the investigation. Madoff's right hand man Frank DiPascali pleaded guilty and is hoping for a reduced sentence by helping the FBI track others involved.
DiPascali is behind bars as prosecutors try to convince a judge to let the convicted co-conspirator out on bail so he can more easily assist the investigation.

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