News and Analysis
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APRA chairman Wayne Byres has publically rejected claims that the regulator was unable to keep the Australian banks in line. Byres claims that APRA was not responsible for monitoring much of the conduct at the centre of the royal commission, and that there is no sign of a broader problem.
APRA board member Geoff Summerhayes has criticised the insurance industry’s rush to use artificial intelligence, claiming that it will bring risks that are not yet fully understood.
The value of Bitcoin has fallen this week, following Twitter’s announcement of a ban on ads for initial offerings or sales of virtual currency. The crackdown is an attempt to reduce the amount of fraud and deception users are exposed to.
Canberra man Timothy Stewart McLeod has been sentenced for almost eight years’ jail after it was discovered he was part of a scheme that earned over $1 Million dollars from vulnerable clients of the ACT’s Public Trustee. Three other men have received similar sentences for their roles in the fraud.
The leniency of Australia’s sanctions against companies that breach cartels or defraud consumers is set to become a more widely debated topic in light of the current banking royal commission. It is expected that corporate watchdogs will place a greater focus on identifying and penalising white collar crime.
There have been calls for the Turnbull government to promise a review of the drafted whistleblower protection legislation, after concerns the current draft bill is inadequate. Meanwhile, The Greens continue to push for a corporate whistleblower reward scheme.
Banking Royal Commission: Commonwealth Bank offered gambler increased credit card limit – 22 March 2018
It has been uncovered that Commonwealth Bank offered increased credit limits to a self-proclaimed gambling addict, after he had already racked up over $35,000 in credit card debt. The bank was aware of the addiction at the time.
A 33 year old Queensland man has been charged with two counts of fraud, after allegedly duping Sheeran fans with fake tickets to the singer’s Brisbane concerts. The State Crimes Command’s Financial and Cyber Crime Group made the arrest after an investigation into computer hacking and fraud.
Banking Royal Commission hears of cash bribes, conflicts of interest and hidden fees – 17 March 2018
Following the conclusion of the first week of the Royal Commission into banks, ABC business reporter Daniel Ziffer provides an analysis of the uncovering of the first few days of the hearing.
Elizabeth Holmes, CEO of medical testing start-up Theranos faces massive fraud charges after the US Securities and Exchange commission uncovered that she had lied about the technology and used publicity to entice payments from investors.
NAB is set to start issuing refunds after fraud was uncovered through their introducer program, which pays businesspeople outside of the bank for successful lending referrals. Investigations have found that bankers helped customers prepare false documents for the loans they received commissions on.
Former young Australian of the year and founder of homeless charity Street Swags Jean Madden has been charged with fraud, after allegations that she rorted Street Swags of over $150,000 and falsified a registry with ASIC.
Nationals MP Tim McCurdy has been charged with multiple counts of fraud, including making and using a false document, and attempting to obtain and obtaining property by deception. The charges relate to an investigation in 2009, and the MP has stood down from the frontbench to fight the charges.
Multi-factor authentication tabled as a solution to Australia’s $443 million online card fraud problem – 8 March 2018
Recent data from the Australian Payments Network has revealed that over 80% of Australia’s card fraud results from CNP (Card Not Present) transactions. In an initiative to combat such fraud, the Australian Payments Network is looking into measures such as multi-factor authentication, and dynamic CVV numbers.
The Australian Federal Police are currently investigating two individuals who are believed to be linked to an operation that involved using the Bureau of Meteorology’s computers to ‘mine’ cryptocurrencies. Charges are yet to be laid, but the investigation continues.
ASIC is in the process of reviewing fraud surveillance and investigation techniques used by general insurance organisations. The watchdog is concerned with the risk of harm to consumers, which could result in inadequate outcomes.
Following suit from Facebook, who recently banned advertisements on the platform for ICOs, Twitter has become the latest social networking platform seeking to combat cryptocurrency fraud. Steps taken include tighter controls on fraudulent accounts and post history.
Canberra woman accused of dating scam claimed to have Michael Clarke’s baby: court documents – 6 March 2018
Canberra resident Crystal-Lee Lancaster allegedly used online dating platform Plenty of Fish to lure men, benefiting more than $200,000. She has been charged with 24 counts of obtaining property by deception, but will appear in court again later this month.
ASIC will now request insurers to provide more data and information about the use of surveillance. This comes amid concerns about the risk for financial inducements if surveillance results in a declined claim concerns in the highly unregulated private investigator industry.
Brisbane-based ANZ employee Justin Chung Pak Chia will face up to five years in jail, after allegedly using a false employee number to create a fake account. The account was used to steal $265,000 from a trust fund, in order to bet on the stock market.
The USA’s top financial watchdog is going after the ICO market with a wave of subpoenas – 1 March 2018
The US Securities and Exchange Commission has reportedly issued a number of subpoenas to persons associated with initial coin offering projects, in an attempt to expose potential fraud and non-compliant activity in the market.
A 35-year-old man from Sydney has been charged for committing fraud worth over $9 million. It is alleged that the man fraudulently diverted almost $10 million from a financial institution into a personal banking account, between June 2016 and August 2017.
Global information and analytics giant RELX has recently acquired technology company ThreatMetrix, and is set to join forces with risk solutions company LexisNexis to fight fraud and financial crime. The acquisition is set to pave the way for a more innovative approach to fraud and identity risk management globally.
The first round of hearings in Royal Commission into the Australian banks are set to begin in March. Lead by Kenneth Hayne, the probe will initially focus on case studies in areas such as home loans, car loans, credit cards, add-on insurance, credit offers and account administration.
A report from IBM security has revealed the ongoing campaigns from ‘cyber con-artists’, who engage in a scam known as Business Email Compromise (BEC). The attacks typically involve impersonating a senior employee, and sending out fake invoices and the like to gain sensitive financial information.
United States authorities have named an Australian man as one of 36 people charged for their role in the Infraud Organisation – an internet based cybercriminal ring responsible for over $678M (AUD) in losses.
Hills shire councillor (NSW) Ray Harty has been charged with fraud, after dishonestly obtaining over $220,000 from Comet Training – owned by the NSW divisions of CFMEU. Harty will face a local court on April 12.
In a development in the long-running investigation into the Australian Workers Union fraud scandal that arose in 1998, the now retired detective who handled the case has broken his silence. David McAlpine has called for a fresh probe into the incident, after his investigation was overturned due to political interference.
Tracey Lee Cook has been jailed after being found guilty of obtaining financial advantage by deception, after depositing over $300,000 in cheques into personal bank accounts. It is understood that Cook used her position at ANZ and power over junior employees to obtain the funds.
‘It’s going to be really bad’: Jordan Belfort slams cryptos as ‘pump-and-dump schemes’ – 13 February 2018
The real-life Wolf of Wall street Jordan Belfort is predicting that the cryptocurrency market will soon come to an end, with investors being ‘left holding the bag’. He describes the craze as a ‘pump-and-dump’ scheme.
A 25-year-old Melbourne man who allegedly created fraudulent invoices and payments to obtain $1.2m from his employer has been charged with 39 counts of fraud. The alleged invoices occurred over 19 months between July 2015 and February 2017.
The royal commission into misconduct of Australian banks could soon turn out to be a dud as the commission says it will offer no legal protection to victims who have already signed confidentiality agreements that prevent them giving a testimony.
Jana Jaros and Jackson Lawrence Malcom Capper have been permanently banned from Australia, after being sentenced to operating unlicensed financial services businesses. The pair cold-called a number of customers, selling them membership to a trading system, priced up to $24,000.
Summary of the NPP process.
With the roll-out of Australia’s new payments platform, further security measures are likely to be needed to reduce the likelihood of fraud from the instantaneous money transfer. To mitigate the risk, Australian banks are looking at biometric security measures, such as voice and facial recognition software.
Four Corners reports on how Australian Taxpayer dollars and a fake drug cartel helped bring down the world’s most wanted money launderer: Altaf Khanani.
Angus Taylor, Australia’s Minister for Law Enforcement and Security and Karen Andrews, Assistant Minister for Vocational Education and skills the first national skills-based cyber-security certificate and diploma level qualifications. The launch comes at a time of high demand for skills in such industries.
US Regulator pushes ahead with fraud charges against Rio Tinto and former executives – 24 January 2018
As the saga of the fraud charges against Rio Tinto continues, the US regulator has decided to push ahead with the charges, after the dismissal of an attempt to defend and toss out the charges.
Jade Robinson has narrowly avoided jail time, after pocketing almost $50,000 of Centrelink money under the false pretence of being a single-mum. The fraud occurred over 5 years, and was used to for personal expenses such as clothing and a new car.
An initial public hearing, run by the Royal Commission into Misconduct in the Banking, Financial Services and Superannuation Industry will be held in Melbourne this coming February 12th. The Commission is inviting submissions of incidents of misconduct from any individual or entity.
Following the loss of millions of dollars between 2004-2017, Western Union has been ordered to repay up to $568 million (US) to victims who were subjected to fraud and scams whilst transferring funds through the company. Much of the fraud occurred through a failure of Western Union to provide checks and balances in combating money laundering.
ANZ has reached a settlement with Australia’s corporate regulator over suspected third party fraud, and has agreed to pay a $5 million fine. The fraud allegedly occurred when car finance brokers submitted loan applications to Esanda on behalf of customers between 2013-2105.
A lawyer for Rio Tinto has argued that the lawsuit against the mining company for overstating the value of Mozambique coal assets in 2011 should be dismissed, claiming the Securities and Exchange Commission failed to plead that the company intentionally committed the fraud.
Popular nightclubs and restaurants in Sydney have been identified as users of Plutus Payroll, the company at the forefront of one of Australia’s largest tax frauds. Many payments made to the group have not been sufficiently documented to confirm they were for wages, leading to investigations into several restaurant and hospitality groups.
WA resident Graeme Roderick Cooper has pleaded guilty to charges of attempting to gain benefit from fraud, criminal damage by fire and creating false belief. The charges follow the arson of the Premier Hotel, and a ploy to stage a robbery in order to claim insurance benefits.
The claims come after an ABC-Fairfax investigation revealed that Craig McLachlan sexually harassed three co-stars while on tour for the Rocky Horror Show in 2014.
Human services minister Michael Keenen has blamed human error and fraud for the $2.8 billion welfare overpayment. The overpayment occurred at the end of last financial year, and only half of the overpayments have been recovered.
54-year-old former Essendon footballer Mark Thompson handed himself into police on January 9th, following police raids of his Port Melbourne home amid an investigation into alleged drug trafficking. He was arrested by detectives, before being released without charge.
A second Melbourne City councillor, Cathy Oke has come forward with fresh sexual harassment allegations against Lord Mayor Robert Doyle. The claims follow similar allegations from former councillor Tessa Sullivan.
Ipswich golf resort developer Richard Turner has allegedly been using black market intermediaries to move millions of dollars of cash real estate deposits from Vietnam into Australia. It is believed Tturner used the funds to loan himself hundreds of thousands of dollars for personal expenses.
Apple Inc. has confirmed that its devices are impacted by security flaws, such as Meltdown and Spectre. The company claims that recent software updates mitigate this vulnerabilities, with further updates to its web browser Safari to come.
Cyber security expert Paul Haskell-Dowland warns that although internet connected home devices alone do not pose a threat to security – there is a risk that they could be used as a portal to personal information. This information is then sent into the cloud, with permission given to people that we don’t know to process the data.
Suspended Queensland chief scientist Suzanne Miller charged with 31 more fraud offences – 19 December 2017
Corruption authorities allege that suspended senior government employee Suzanne Miller spent more than $30,000 on a government corporate card for personal items. This is following previous fraud charges between 2014-2017, whereby Miller dishonestly gained around $45,000 in benefits from using private health insurance of the Queensland Museum.
The motion code credit card set to be launched in Australia by mid 2018 is a high-tech credit card, developed by French digital security specialists IDEMIA. The card features dynamic CVV numbers, that change every hour, and are displayed on an e-paper mini screen on the card.
Article sponsored by Chartered Accountants Australian and New Zealand. A number of fraud control practitioners offer their practical views on what commercial organisations can and should do to reduce the risk of internal fraud and corruption.
Commonwealth Bank Australia’s senior financial planner Ricky Gillespie has pleaded guilty to foregoing clients’ signatures when working at the bank.
With anonymous cryptocurrencies such as bitcoin seeking to revolutionise financial transactions, Wall Street and Silicon Valley innovators are questioning the validity of further applications of the systems, such as use in everyday banking.
Glenn James Tonkin, senior manager at Anglo American allegedly used a series of false invoices to steal more that $4.1m from the company. Tonkin pretended to be other people in order to receive payments he wasn’t entitled to, and has plead guilty to 10 counts of fraud.
The US Justice apartment is extending a bribe enforcement policy implemented under Obama’s presidency. The U.S will consider reduced penalties for companies that come clean about wrongdoings, a change that is at the core of the new guidelines of the Foreign Corrupt Practices act, which prohibit payments to foreign officials to gain or retain business.
A New South Wales woman has been charged with fraud after claiming she was blind in order to receive Centrelink payments. The 36-year-old was a Centrelink employee during period that she received the fraudulent payments, between 2012 and 2015.
Following the rise in bank scandals and cover-ups, a royal commission has been launched into the banks and financial services. Ultimately, the government will have control over major aspects including who to appoint as commissioner, the terms of reference, funding and the timetable.
Don Burke: Gardening guru speaks out against indecent assault and sexual harassment allegations – 27 November 2017
Australian TV Personality Don Burke has spoken out on A Current Affair and the 7:30 report regarding allegations of inappropriate behaviour and sexual harassment claims. Several of Burke’s co-workers, journalists and acquaintances have reported various incidents of indecent behaviour, The personality admits he has made some mistakes in life, but has denied allegations of sexual harassment.
Trisha Mooney, 44, has been sentenced to three years in jail after defrauding her Canberra employee, Transport Industries Skills Centre, of $160,000. Mooney used her corporate credit card to pay for personal expenses, used her position to make unauthorised payments to herself and traded in a car owned by her employer to purchase a personal car. The fraud was discovered by the CEO during an internal review of finances.
In November this year, UK corruption investigators laid the first chargers in the Unaoil oil scandal, that originated from leaked letters and emails in 2015. Monaco based company Unaoil was exposed as a facilitator running a global network of middlemen fronting for western companies seeking lucrative contracts. The fraud office has also issued extradition requests for the Ashani family, who own and run the firm.
Justice Robert Redlich is set to become the new Independent Broad-based Anti-Corruption commissioner from January 1 2018. Bringing nearly 50 years of experience, Redlich will be installed for a 5 year term, replacing Stephen O’Bryan.
Saudi-Arabia’s attorney general claims that over $100bn has been misused through systematic corruption in recent decades. Currently, 201 people are being held for questioning, as part of an anti-corruption sweep that is currently underway.
The spike in value of Bitcoin has seen the rise of ICOs (Initial Credit Offerings), a business promise to automate some kind of marketplace using the same Blockchain technology as Bitcoin. With Bitcoin prices rising, it is more profitable for investors to hold onto the offerings, fuelling the likelihood of a “Bitcoin Bubble’.
66-year old former Ipswich mayor Paul Pissale has faced court on charges including corruption, fraud and perjury, after dishonestly taking over $60k worth of cheques and equipment that were destined for charities and community groups.
A third party contractor has allegedly released personal data of almost 50,000 Australian workers from AMP, Department of Finance, Australian Electoral Commission and National Disability Insurance Agency. The breach is said to have included the names, passwords, phone numbers, email addresses, credit card numbers and salaries.
Invitation for EOI – Provision of Apprenticeship and Traineeship Regulatory Field Services in Victoria
The Victorian Registration and Qualifications Authority (VRQA) is a statutory authority in Victoria’s Education and Training portfolio. The VRQA’s purpose is to regulate for quality learning outcomes in safe and well-governed environments.
The VRQA has published an Invitation for Expressions of Interest (EOI) for the Provision of Regulatory Field Services on the Tenders Victoria website.
A parliamentary inquiry has heard that almost $1 million every month is being skimmed off illegal Malaysian migrant workers. It is believed the labour contractors are getting away with such blatant exploitation because authorities are not taking enough notice of the inquiry.
The number of welfare tip offs across the nation are currently on the rise, increasing by over 10,000 from 2013-14 to a total of 109,798 tip offs in 2016-17. Human services minister Alan Trudge has said more efforts will be put into cracking down on welfare fraud.
Justice Walter Onnoghen, Nigeria’s Chief Justice Officer has announced major reforms to the country’s criminal justice system, setting up the Corruption and Financial Crimes Cases Trial Monitoring Committee. The committee is aimed to ensure the speedy and efficient prosecution of cases.
Leaked e-mails have revealed the prominent business family have been using Dubai shelf companies to facilitate acts of money laundering. The fraudulent behaviour is believed to have involved hundreds of millions of rand, belonging to South African taxpayers.
European aircraft maker Airbus is currently under investigation by French and British authorities, after the company itself detected and alerted authorities to irregularities concerning third-party consultants. The company has raised concerns that the investigations could impact their financial statements, however this is yet to be confirmed.
RAMS founder John Kinghorn charged with $30m tax fraud after 8 year investigation. – 30 October 2017
The Australian Federal Police has alleged that RAMS Home Loans founder John Kinghorn has fraudulently concealed beneficial ownership of two companies between 2004 and 2007. It is believed the taxes he avoided during this period amount to more than $30 million.
Adani: DFAT facing questions over possible secret requests for foreign cash to fund controversial mine – 26 October 2017
Questions have been sparked over DFAT documents relating to requests for foreign government financing for the controversial mine and rail project. It is believed there have been ‘secret’ deals under consideration between Australian government officials and foreign finance companies regarding the project.
A first home buyer is suing the Sydney property giant Salim Mehajer for compensation after purchasing an off-the plan unit in one of Mehajer’s developments. According to Tran, soon after he placed the deposit, he was informed that work on the building had not yet started, and Mehajer had filed an application to reduce the size of the unit.
Following the US SEC investigation against Rio Tinto, courtesy of a whistle-blower, the Turnbull government is set to draft legislation on whistle-blower protection reforms. The legislation is likely to require public companies to have a whistle-blower policy in place, or face large penalties.
Gone in 15 seconds: why faster bank transfers make Australia and even bigger target for email fraud – 19 October 2017
Concerns have been raised over the potential increase in business email compromise (BEC) fraud attacks that could result from the Reserve Bank of Australia’s New Payments Platform (NPP), due to be implemented in January. The near real-time funds transfer will mean that funds could disappear from accounts before victims even realise they have been targeted.
Mining giant Rio Tinto and two of its former executives have been charged with fraud, after it was discovered they allegedly inflated the value of coal assets acquired in 2011. The CEO and CFO failed to follow accounting policies and comply with company policies, and have been charged with violating the anti-fraud, reporting, books and records and internal control provisions of the federal securities law.
A number of North American financial institutions are planning to invest in machine learning analytics to combat fraud. It is expected that the approach will generate intelligence that will both help to prevent attacks, as well as improve the customer experience.
Some Dominos Australia customers have been receiving phishing emails from randomised email addresses, using names and suburbs of Dominos stores to lure a reply. Dominos has since confirmed it has cut ties with a supplier that appears to have been breached.
Boris Trajkov, ‘Captain’ of childcare centre spent $300,000 of charity’s money on alcohol and lingerie – 17 October 2017
76 year old Boris Trajkov has been ordered by a court to repay more than $1 million dollars after spending funds from a charity he helped found on alcohol and lingerie. The organisation also operated a childcare centre, for which Trajkov received payments in cash, failing to bank majority of the funds and pay childcare staff.
A teenager from Townsville has reportedly stolen more than $10,000 after using her sick-grandfather’s debit card for more than 87 transactions. The fraudulent purchases began at the end of 2015, and continued until August this year.
Hacker codenamed ‘Alf’ from Home and Away stole secret data on Joint Strike fighter jets and Surveillance planes – 12 October 2017
An unidentified hacker has accessed sensitive information about Australia’s warplanes and navy ships. It is believed around 30-gigabytes of information has been stolen from a firm that subcontracts to the Defence Department.
The Securities and Exchange Commission launched an investigation last year into a corruption case against Och-Ziff (A New York Hedge Fund) employee Vanja Baros. Baros allegedly orchestrated $400 billion dollars in bribes from Och-Ziff investment funds, used to secure government favours in several African Countries.
A recent study has suggested that financial incentives for whistleblowing can delay reports of fraud, by hijacking the moral motivation to do the right thing. Furthermore, the study also found that such rewards can distort the reporting process.
The University of Melbourne has become the first Asia-pacific institution to issue recipient-owned academic credentials on a Blockchain. An open-source mobile app will allow students to store and access their credentials on the go.
A former Hockeyroo has pleaded guilty to falsifying claims that she was terminally ill, in order to receive a $73,000 salary from a benefactor through cancer charity Redkite. Kate Hubble forged numerous documents and letters from medical professionals to support her claims, however has since pleaded guilty to four charges of making and using false documents.
Najam Shah will face 5 years jail time following a scheme that generated up to $170 million in stolen funds. Shah was behind a fraudulent home-loan scheme run from Melbourne’s Myra Home Loans, and has pleaded guilty to one count of conspiring to defraud financial institutions.
Areas in china with low education levels have seen a flourish of Pyramid schemes, resulting in vulnerable citizens being targeted and over charged for common consumable goods, such as cosmetics or health supplements. This is a critical social problem, that authorities are only just beginning to crack down on.
The elimination of the need for a third party such as banks in financial transactions – a feature of Blockchain, is likely to reduce the likelihood of financial fraud. This feature makes it difficult to hack and manipulate financial records.
A couple in the US have pleaded guilty to fraud after repeatedly falsely claiming items they had ordered from Amazon had been damaged in the post. The couple could face prison sentences of up to 20 years alongside a fine of up to $500,000 for the $1.2 million (USD) worth of stolen goods.
The ABC’s Four Corners has uncovered Adani Group’s Australian operations tax haven ties, discovering that many key assets are owned in the British Virgin Islands. The company’s filings with AISIC fail to mention a company registered in the Islands, giving the group opportunities to fraudulently minimise their tax payments..
The Securities and Exchange commission charged business man Maksim Zaslavskiy with fraudently running two initial coin offerings. It is alleged that he had been selling unregistered securities for coins and digital tokens that don’t exist.
Japanese Banks are thinking of making their own crypto currency called the J-Coin – 28 September 2017
Following the recent rise in popularity and value of crypto currencies such as Bit Coin, the Mizuho Financial Group in conjunction with a range of financial institutions are in the early stages of launching a Japanese crypto currency, that is expected to be launch in time for the 2020 Tokyo Olympics.
Cyber security specialist shortages could leave Australia vulnerable to attack, experts say – 27 September 2017
The Australian government has estimated a need for over 11,000 cyber security specialists over the next 10 years. Experts believe meeting this demand will involve collaboration between the government and private sector, as well as the integration of cyber security into the school curriculum.
The education department has issued a formal reprimand to Goulburn Ovens Institute of TAFE (GOTAFE), amid accusations of misusing taxpayer funds. The misconduct includes a range of dishonest enrolments, that did not meet course requirements to attract further funding.
Fuji Xerox has launched legal action against former executives following fraudulent accounting practices earlier this year, related to overstated revenue statements. It is believed the activity was linked to the company’s “sales at any cost” culture.