Financial crime is the act of acquiring illegaly property or funds. Often the targets are individuals and small firms, and in general, to foreigners who are not are not accustomed to the environment.
Most common type of crime is robberies. Although more involved methods exist, they require expertise and development of fraud schemes in order for them to succeed. Schemes are much more harder to detect than robberies, and much harder to track down. Robberies on the other hand, are often smash-and-grab, or most often for tourists, price fixing for different currencies. For example, shops who accept currencies different than the national but the price remain fixed in both. This way the tourist can pay double or triple the actual amount.
Schemes also can involve victims into doing something illegal. A common crime that can turn victims into criminals is working without documents. Often than not, this is not born out of the victim but he still participates. When the employer lies to the employee about his workshift or even that he is working in the firm, without providing the victim’s documents back. The victim can only realize what happened after he wants to quit the job.
Another type of work crime that is more common is paying under-the-table. This type of crime usually is OK for both the employee and the employer. The scheme is simple, at the end of the month, the employee gives smaller than actual amount through official channels, such as bank payments, and gives the rest of the money to the employee one on one. This is done for tax evasion.
- Letter of Credit Fraud – Legitimate letters of credit are never sold or offered as investments. They are issued by banks to ensure payment for goods shipped in connection with international trade. Payment on a letter of credit generally requires that the paying bank receive documentation certifying that the goods ordered have been shipped and are en route to their intended destination. Letters of credit frauds are often attempted against banks by providing false documentation to show that goods were shipped when, in fact, no goods or inferior goods were shipped.
- Business Fraud – consists of dishonest and illegal activities perpetrated by individuals or companies in order to provide an advantageous financial outcome to those persons or establishments. Also known as corporate fraud, these schemes often appear under the guise of legitimate business practices. An array of crimes fall under business fraud, including the following:
- Non-payment of funds – Fraud occurring when goods and services are shipped or rendered but payment for them is never received.
- Overpayment scheme – An individual is sent a payment significantly higher than an owed amount and is instructed to deposit the money in their bank account and wire transfer the excess funds back to the bank of the individual or company that sent it. The sender’s bank is usually located overseas, in Eastern Europe for example, and the initial payment is found to be fraudulent, often after the wire transfer has occurred.
- Re-shipping scheme – An individual is recruited to receive merchandise at their place of residence and subsequently repackage the items for shipment, usually abroad. Unbeknownst to them, the merchandise was purchased with fraudulent credit cards, often opened in their name.
Non-delivery fraud- In non-delivery fraud, criminals promise victims highly sought-after goods, accept payment, then never deliver. While the principle is simple, the fraud scheme is often sophisticated. Criminals can adapt a well-established modus operandi to suit any product, whether it is medical equipment, puppies, office supplies or electronics