Financial Crime


Financial Crimes:

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.
Key Expertise:
Non-delivery fraud

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

Investment/Boiler room fraud
Investment/Boiler room fraud- Victims are pressured into investing in fraudulent or worthless shares.
ATM fraud
ATM fraud – In order to access an account, a user supplies a card and personal identification number (PIN). Criminals have developed means to intercept both the data on the card’s magnetic strip as well as the user’s PIN. In turn, the information is used to create fake cards that are then used to withdraw funds from the unsuspecting individual’s account. Cyber Laundering – The criminal practice of money laundering carried out in cyberspace through online transactions. Cyberlaundering is basically committed in 3 steps: Placement of funds, i.e. when illicit money is put into a financial institution, funds are stolen online through digital transactions; Layering, i.e. moving funds inside the financial system and into unregulated financial e-cash systems; Integration, i.e. removing funds all together from the financial system.
Email Account Compromise (EAC)
Email Account Compromise (EAC) – Similar to BEC, this scam targets the general public and professionals associated with, but not limited to, financial and lending institutions, real estate companies, and law firms. Perpetrators of EAC use compromised e-mails to request payments to fraudulent locations.
Telecom fraud
Telecom fraud- Random victims are contacted by a criminal claiming to be a friend, relative or someone in a position of authority and tricked into parting with money.
Fraud / Credit card fraud
fraud / Credit Card Fraud – Credit card fraud is the unauthorized use of a credit or debit card, or similar payment tool (ACH, EFT, recurring charge, etc.), to fraudulently obtain money or property. Credit and debit card numbers can be stolen from unsecured websites or can be obtained in an identity theft scheme.
Internet Fraud
Internet Fraud: use of Internet services or software with Internet access to defraud victims or to otherwise take advantage of them. Internet crime schemes steal millions of dollars each year from victims and continue to plague the Internet through various methods. Several high-profile methods include the following:
Data Breach
Data Breach: A leak or spill of data which is released from a secure location to an untrusted environment. Data breaches can occur at the personal and corporate levels and involve sensitive, protected, or confidential information that is copied, transmitted, viewed, stolen, or used by an individual unauthorized to do so.
Investment Fraud
Investment Fraud – Investment fraud involves the illegal sale or purported sale of financial instruments. The typical investment fraud schemes are characterized by offers of low- or no-risk investments, guaranteed returns, overly-consistent returns, complex strategies, or unregistered securities. Examples of investment fraud include advance fee fraud, Ponzi schemes, pyramid schemes, and market manipulation fraud.
Romance scams
Romance Scams- Criminals develop a “relationship” with victims through social media with the ultimate goal of obtaining money.
Card-not-present fraud
Card-not-present fraud – involves the unauthorised use of credit or debit data (the card number, billing address, security code and expiry date) to purchase products and services in a non-face-to-face setting, such as via e-commerce websites or over the telephone. In the majority of cases, the victims are unaware of the unauthorised use of their cards, which remain in their possession.
Business Email Compromise Fraud (BEC)
Business Email Compromise Fraud (BEC) – Criminals hack into email systems or use social engineering tactics to gain information about corporate payment systems, then deceive company employees into transferring money into their bank account. / A sophisticated scam targeting businesses working with foreign suppliers and companies that regularly perform wire transfer payments. The scam is carried out by compromising legitimate business e-mail accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.
Salami Attacks
Salami Attacks – An attack on a computer network which involves the intruder siphoning off small amounts of money from a file and placing them in another file that he or she can access; for example, a file that holds their bank account details. A typical salami attack would add a small amount to a debit which the account holder would not check, such as a debit which represented a service charge. This small increase in debit (often a few pence or a few cents) would then be credited to the perpetrator’s bank account. An unsophisticated banking system which just checked that debits and credits matched would be unable to detect this type of fraud.