News and Analysis

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Investigation & Fraud News – Week ending 17 May 2024

ACT Integrity Commission investigating suspected corrupt conduct of Walter Sofronoff, who chaired an inquiry into Bruce Lehrmann’s prosecution – 13 May 2024
The ACT Integrity Commission has announced an investigation into the conduct of Walter Sofronoff KC during an inquiry into the prosecution of Bruce Lehrmann.
The commissioner says he suspects “on reasonable grounds” that Mr Sofronoff’s conduct may constitute corruption. The allegations stem from Mr Sofronoff’s release of his final report to two journalists before its release to the public.

AAT Confirms Permanent Ban for Ex-NSW Adviser
The Administrative Appeals Tribunal (AAT) has upheld ASIC’s decision to permanently ban Sean John Sweeney from providing any financial services, performing any function involved in the carrying on of a financial services business, and controlling an entity that carries on a financial services business. Financial advisers must act with honesty and integrity in their dealings with clients.

ATO’s Serious Financial Crime Taskforce receives training to combat crypto crime – 13 May 2024
More than 50 members of Australia’s Serious Financial Crime Taskforce (SFCT) have received crypto asset investigation training from specialists across five leading jurisdictions of global tax enforcement.
The ATO brought together its partners under the Joint Chiefs of Global Tax Enforcement (J5) to give its SFCT an opportunity to explore real-world case studies and emerging technologies to support the identification, investigation and prosecution of cyber targets related to tax crime and money laundering.

Mortgage lender Firstmac suffers cyberattack, customer data including driver’s license numbers and banking details leaked – 14 May 2024
Mortgage lender Firstmac has been subject to a cyber attack where customer data, including banking details and driver’s license numbers, were exposed. The company said it had conducted a “comprehensive review of impacted files” and was notifying affected customers directly.

Australia: Whistleblower jailed for nearly six years for media leaks – 16 May 2024
The Australian Capital Territory (ACT) Supreme Court has delivered a 68-month sentence to former military lawyer and whistleblower David McBride for his leaking of classified military information to the ABC. The International Federation of Journalists (IFJ) joins its Australian affiliate, the Media, Entertainment and Arts Alliance (MEAA), in condemning McBride’s sentencing and its alarming impact on public interest journalism, highlighting the urgent need for whistleblower protection reform.

How South-East Asia’s pig butchering scammers are using artificial intelligence technology – 16 May 2024
Real-time deepfake face-swapping systems are reportedly being employed by South-East Asian crime syndicates in so-called “pig butchering” cyberscam operations. Experts say the technology and other new artificial intelligence (AI) tools – such as generative AI chatbots – are increasing the effectiveness of the scams and broadening their reach to new victims.

AI ‘explosion’ will see up to $34.7BN spent on AML this year – 16 May 2024
A Financial crime and compliance expert has told how the “explosion” of AI will see $34.7bn potentially spent on Anti Money Laundering this year that this will increase by 5.7% by 2028, to $43.7BN. AI has caused an “even bigger impact” on financial crime compliance, than in society at large, Ms Simmons told the European Anti-Financial Crime Summit.

NSW police allege Ulises Dávila, Kearyn Baccus and Clayton Lewis were involved in a scheme ‘for yellow cards to occur during certain games’ in late 2023 – 17 May 2024
Three A-League players have been charged and a fourth could be extradited following a NSW Police investigation into alleged “yellow card manipulation” in matches this season. A six-month investigation found a senior player was allegedly instructed by a man believed to be in South America to “organise for yellow cards to occur during certain games in exchange for profit”.It is alleged the players manipulated the number of yellow cards during games on November 24 and December 9.

Australian College of Nursing executives sacked after investigation finds alleged ‘financial irregularities’ – 17 May 2024
The CEO and an executive of the Australian College of Nursing have been sacked following an investigation into alleged “financial irregularities” at the organisation. The ACN’s board says it will work to reinforce a “culture of accountability and transparency” at the college.


Investigation & Fraud News – Week ending 10 May 2024

‘Gaming the process’: Probe finds $1 million of pandemic grants were claimed fraudulently – 3 May 2024
A South Australian corruption investigation has found more than $1 million of cash grants meant to help businesses stay afloat during the COVID-19 pandemic were claimed fraudulently.
The Independent Commission Against Corruption (ICAC) unearthed flaws in the grant system, where officials were left unable to access the Australian Tax Office files to verify claims made by businesses.

Two integrity investigations into Tasmanian MPs have been going for almost two years, but little information has been made public – 3 May 2024
Tasmania’s Integrity Commission recently urged politicians not to speculate about investigations into members of parliament. One investigation, codenamed Loyetea, has been running for two years, while another, Olegas, started being assessed 22 months ago. The Centre for Public Integrity says the commission is “encouraging” the political speculation by failing to resolve the investigations quick enough.

Sydney Man Expected To Be Charged With Blackmail After Major Data Breach Investigation – 4 May 2024
A man in Sydney has been arrested by the police under suspicion of blackmail in connection to a significant data breach investigation. The breach has resulted in the exposure of personal details belonging to potentially up to one million residents of New South Wales and the Australian Capital Territory (ACT), which were shared online.

Warren Buffett says AI may be better for scammers than society – 5 May 2024
Warren Buffett cautioned the tens of thousands of shareholders who packed an arena for his annual meeting that artificial intelligence scams could become “the growth industry of all time”. Someone made a fake video of Mr Buffett, apparently convincing enough that the so-called Oracle of Omaha himself said he could imagine it tricking him into sending money overseas.

Access to digitial version of AFR required to read article

Australians have had a gutful of corruption, but will the latest promises of whistleblower reform be enough? – 6 May 2024
The cases of ex-military lawyer David McBride and ATO whistleblower Richard Boyle have prompted a growing public interest in whistleblower protections. Both men have spent years waiting for judgment. Submissions reveal that our whistleblowing protection laws are not fit for purpose and need updating. Some call for a separate independent agency to help fill the gaps and encourage more whistleblowing.

Embattled plane maker Boeing faces new investigation – 8 May 2024
It’s been a tough week for US plane maker Boeing, which suffered a rocket glitch forced the delay of its first-ever astronaut launch, just two hours before lift-off. It comes as the US Federal Aviation Administration opened a new investigation after the company reported that workers had falsified inspection records on certain 787 Dreamliner planes.

The time to assess your company’s exposure to bribery and corruption risk is now – 8 May 2024
In the wake of the new ‘failure to prevent’ offence, the Commonwealth Attorney-General is required to publish guidance on the steps that can be taken to prevent an associate from bribing foreign public officials, to assist companies to implement appropriate measures to stop bribery. In this paper, they discuss the new draft adequate procedures guidance1 and explain what you need to do to prepare for the foreign bribery reforms taking effect in early September 2024.

Greyhound industry reforms to be overseen by former racing integrity commissioner Sal Perna – 8 May 2024
Note: Sal has been an AIPI member for several years. Sal Perna, who was Victoria’s racing integrity commissioner, will oversee administrative and animal welfare reforms in the SA greyhound industry. Mr Perna’s appointment comes after the ABC revealed animal abuse Mr Perna will regularly report to SA Racing Minister Katrine Hildyard.

NDIS provider accused of excessive use of force against people with disabilities – 9 May 2024
An ABC investigation has uncovered a series of allegations by former workers blowing the whistle on mistreatment, neglect and excessive use of force against people with disabilities being cared for by NDIS provider Evolution Support Services.

Fiji’s former prime minister Frank Bainimarama sentenced to one year in jail after interfering in police investigation – 9 May 2024
Fiji’s former coup leader and former prime minister Frank Bainimarama has received a one year jail sentence after being convicted of perverting the course of justice. The conviction related to his role in influencing a police investigation into funding of the Pacific region’s biggest university in 2019. Bainimarama faces a series of charges after he lost office in Fiji’s December 2022 election.


Investigation & Fraud News – Week ending 3 May 2024

Charges laid after alleged Gold Coast cold calling scam leads to $1.5m loss – 28 April 2024
Detectives allege several Gold Coast companies defrauded more than $1.5 million from about 30 people.Multiple companies were allegedly involved, including Crypto Advisers Australia, Strategic Capital, Active Marketing Solutions and Alternative Capital. The charges come following an almost two-year investigation by Queensland Police into cold call investment fraud or “boiler room” scheme.

Scam losses decline, but more work to do as Australians lose $2.7 billion – 28 April 2024
The National Anti-Scam Centre’s collaborative efforts across government, law enforcement, consumer organisations and industry have boosted the community’s fight against financial crime, as the latest Targeting Scams report reveals a 13.1 per cent decline in reported losses to $2.74 billion in 2023. Article also details scam trends and tips to avoid being scammed.

Rebel Sport owner faces escalating legal threat – 28 April 2024
The board of Rebel Sport owner, Super Retail Group, is facing an escalating crisis as Harmers Lawyers says more current and former employees have approached them, about a potential lawsuit amid allegations of an undisclosed relationship, involving the group’s boss, Anthony Heraghty, as well as governance issues and bullying claims.

Every Dollar Lost to Fraud in Australia Costs Firms AUD$3.68 According to LexisNexis True Cost of Fraud Study – 28 April 2024
Fraud has increased for 66% of Australian organisations year-on-year. Organisations incur an average cost of AUD$3.68 ($2.96 for retailers and $4.21 for financial institutions) for every Australian dollar lost to fraud. These costs encompass financial losses due to fraud, as well as internal labor expenses, external costs, legal costs and recovery fees, along with the expenses associated with replacing or redistributing lost or stolen merchandise.

Cyber attacks on firms are ‘in no way’ declining – 28 April 2024
Brendan Payne is a partner at McGrathNicol and operates in the cyber risk incident response and digital forensic space. In this article he reflects on the current state of affairs for cyber risks and how and why legal businesses should improve their cyber security frameworks, to avoid adverse implications. Business should also respond in a timely manner in the event of a cyber instance.

I lost $2.5m of my super to scammers – 28 April 2024
More than 60 victims who have lost money from HSBC accounts in the past 12 months totalling more than $6 million have formed an action group to demand compensation and explanations about how the scams happened. Many claim the bank has attempted to buy them off with “goodwill” payments of around $200 for tens of thousands of dollars in losses each. The victims claim the banks are using a legal loophole to avoid financial liability for the thefts, responsibility for the money’s security or power to control the losses.

White-collar crime goes unpoliced due to lack of funds: ASIC boss – 28 April 2024
ASIC has faced criticism inside parliament and more broadly, that it only pursues a small fraction of the complaints it receives every year. Chairman Joe Longo says he would love to run more court cases against badly behaving companies and dodgy directors, but his hands are tied because he does not have enough money.

Outgoing investigations boss Tim Mullaly blames focus on banks, insurers for plunge in ASIC, DPP charges – 28 April 2024
ASIC’s enforcement boss (Tim Mullaly) has blamed a belated focus on dodgy dealings by banks and insurance companies for a plunge in serious prosecutions. When quizzed about just two sets of criminal charges being laid by the Commonwealth Director of Public Prosecutions in the first nine months of 2023-24, Tim Mullally pointed to his investigators being tied up by complex civil actions in the wake of the financial services royal commission.

Access to digital version of the West Australian required to read the article

Accounting bodies slam ATO’s use of client linking to tackle fraud woes – 28 April 2024
The ATO should have stepped up basic fraud prevention measures before resorting to a “burdensome” client-agent linking process that forces busy tax agents to do the heavy lifting, professional bodies say. CA ANZ, CPA Australia and the Institute of Public Accountants (IPA) said the recommendations contained in the Inspector-General of Taxation and Taxation Ombudsman’s report into the ATO’s management of tax identity fraud, showed there were other “relatively easy” steps to keep fraudsters at bay.

Binance founder is sentenced to four months in prison on money-laundering charges – 1 May 2024
Changpeng Zhao, the founder of the world’s leading cryptocurrency exchange, has been sentenced to four months in prison after pleading guilty to money-laundering charges last year. The company admitted to engaging in anti-money laundering activities, unlicensed money transmitting, and sanctions violations.

Australians are losing $5,200 per minute to scammers. There’s a way to cut that, but so far the government isn’t keen – 28 April 2024
Last year Australia lost an astonishing $2.74 billion to scammers. That’s more than $5,200 per minute. In Australia in 2022, only 13 per cent of attempted scam payments were stopped by banks before they took place. In 2022, people in the UK lost £2,300 per minute, which is about $4,400. The UK has two and a half times Australia’s population. If we want to cut Australians’ losses, it’s time to look at rules about to come into force in the UK.

Fraud, waste and abuse: How some doctors are exploiting Medicare and turning patients into ‘cash cows’ – 28 April 2024
The ABC asked experts to examine the records of several chronic pain patients to determine if any misbilling had occurred.
They said: “100 percent of the anesthetic claims we reviewed were questionable.” Stakeholders, including medical practitioners and healthcare executives, have called for an urgent reform of the billing processes.

NSW Fair Trading launches inquiry into strata management company Netstrata following ABC investigation – 2 May 2024
NSW strata and property services commissioner John Minns has announced a review of Netstrata and its operations.The ABC revealed the company Netstrata was routinely using its wholly-owned insurance arm to charge apartment owners insurance brokerage fees as high as three times the typical rate and was taking kickbacks from contractors and suppliers it hires. A “third-party independent expert” will conduct the review. Fair Trading says it reserves the right to take further regulatory action.


Investigation & Fraud News – Week ending 26 April 2024

Hackers scam staff member at one of Australia’s biggest law firms – 18 April 2024
One of the country’s top six law firms (MinterEllison), was the victim of an attempted scam attack, after one of its staff members was tricked into transferring a large sum of money into the account of a fraudster, impersonating a trusted business associate.

Access to digital version of SMH required to read article

Five Australians among 37 arrested over global phishing scam following international investigation – 18 April 2024
Five Australians are among 37 individuals who have been arrested in relation to an alleged global phishing scam that targeted tens of thousands of people, the Australian Federal Police (AFP). Police said the scam involved 10,000 cybercriminals from around the world who used the platform LabHost to trick victims into providing their personal information, such as online banking logins, credit card details and passwords. Among the victims were 94,000 Australians.

Tasmanian woman sentenced for fraud after Bunnings bender with council funds – 19 April 2024
A former council worker has been sentenced to 18 months home detention for defrauding her employer of more than $130,000 for household goods. The Supreme Court in Hobart heard Casey Bryant’s conduct was “planned and calculated” and her actions have taken away funds from the Central Highlands community.
Her husband, Jamie Bryant, was sentenced to six months imprisonment, wholly suspended for 18 months.

Increase in vigilance leads to spike in NDIS fraud reports – 23 April 2024
Bill Shorten, the Minister for the National Disability Insurance Scheme (NDIS) and Government Services, has highlighted the importance of public contributions to combating fraud within the NDIS framework. Recent data revealed that the NDIA experienced a 75% surge in fraud-related tip-offs in the last quarter compared to previous quarters.

Cyber fraud threat growing – 23 April 2024
Facebook and Instagram users are reporting more hackings of their accounts than ever. And the consequence for some small businesses is that they’re losing customers. Some are accusing tech giant Meta of failing to help them regain access to their computers but the Federal Government is considering a new social media Ombudsman to manage these disputes.

How search empowers cybersecurity, fraud prevention and detection – 23 April 2024
Digitisation is almost purpose-built for fraud. Automated, anonymous, and mostly working offshore and outside jurisdictions, cybercrime has become the perfect low-risk, high-reward crime. With low barriers to entry (in many cases, a laptop and a connection are all that’s necessary), online fraud is becoming increasingly sophisticated thanks to bots, social engineering tactics, malware attacks, and deepfake technology.

Arizona indicts 18, including Rudy Giuliani, for ‘fake elector’ scheme to overturn 2020 election for Donald Trump – 25 April 2024
Donald Trump’s former lawyer Rudy Giuliani and chief of staff Mark Meadows are among 18 people indicted in Arizona for trying to overturn Trump’s loss to Joe Biden in the 2020 presidential election. Arizona is the fourth US state to bring charges against “fake electors”. The US Supreme Court will hear arguments on Trump’s bid to avoid federal prosecution over his efforts to reverse his loss.

Could Benjamin Netanyahu go to jail? – 25 April 2024
Israeli Prime Minister Benjamin Netanyahu is facing charges of bribery, fraud and breach of trust. He is doing everything he can to stay in office, because if he holds office, he can’t be thrown in jail.

WADA launches independent review of handling of Chinese swimmers’ positive doping tests before Tokyo Olympics – 26 April 2024
A Swiss prosecutor will lead an investigation into how 23 Chinese swimmers went unpunished after failing doping tests in the lead-up to the Tokyo Olympics. WADA said Eric Cottier would have access to all files and documents related to the case and would be free to consult independent experts. Cottier will begin his work in the coming days and is expected to deliver his findings within two months.

‘Fight to clear name’ at Daryl Maguire visa fraud tria – 26 April 2024
Former MP Daryl Maguire has said he will “fight to clear his name” over a charge he conspired to commit visa fraud allowing non-citizens to remain in Australia over a decade ago. The disgraced ex-NSW Liberal politician appeared at Sydney’s Downing Centre District Court on Friday where he pleaded not guilty to the single conspiracy charge. The 65-year-old was charged in 2022.