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Investigation & Fraud News – Week ending 13 September 2024
China gives PwC record £47m fine and six-month ban over Evergrande – 13 September 2024
The China arm of the accountancy firm PwC has been banned for six months and fined a record 441m yuan (£47m) over its audit of the collapsed property developer Evergrande. It was found that PwC and its Guangzhou branch knew that there were major misstatements in Evergrande Real Estate’s financial statements during the audit of Evergrande Real Estate’s financial statements and issued inappropriate audit opinions, and issued false audit reports.
https://www.theguardian.com/business/2024/sep/13/china-pwc-47m-fine-six-month-ban-evergrande-audit
Former department bosses Kathryn Campbell and Renee Leon named for breaching duties in relation to Robodebt – 13 September 2024
The robodebt scheme was an automated tool for assessing and recovering Centrelink debts. Sixteen public servants were referred to the public service commissioner for investigation last year, including current employees named in the sealed section of the robodebt royal commission’s final report. The commission reported “12 current and former public servants and former agency heads have been found to have breached the code on 97 occasions”.
Indian families are falling for multi-million-dollar Australian visa scams – 16 September 2024
New rules introduced by the Government last year aimed to stop visa fraud but instead these changes may have fuelled a surge in unethical practices. This investigation reveals how opportunistic agents in India are using an Australian college to scam students out of hundreds of thousands of dollars.
The killing of underworld figure Alen Moradian raises difficult questions about how police fight a gangland war – 16 September 2024
The killing of underworld figure Alen Moradian, raises troubling questions about law enforcement’s role in Australia’s ongoing gang wars: should police intervene to save a life, or wait and gather more evidence on significant criminal networks? The rules and protocols are not clear. Those who watch this world closely say that must change.
Criminal elements still influential in CFMEU construction division, report finds – 16 September 2024
A preliminary investigation into the CFMEU’s construction division has found it is still influenced by bikies and attempts to remove criminal elements were “inadequate”.
The investigation by Geoffrey Watson SC found the union was “caught up in a cycle of lawlessness”. Mr Watson recommended the CFMEU work with police to root out criminal elements.
Former Department of Communities project manager Mark Ainslie jailed over cash-for-contracts scheme – 17 September 2024
Mark Ainslie was a former project manager with the Department of Communities when he took more than $200,000 in bribes to award lucrative construction contracts to his associates. His offences spanned five years before he quit the department in 2020. Ainslie was sentenced to more than four years’ jail, and will be eligible for parole in April 2027.
Revealed: criminals and unlicensed agents operating across Australia’s real estate sector – 17 September 2024
Transparency International Australia says international regulators and the federal government have ‘clearly identified real estate as being at very high risk of money laundering involving organised crime gangs’. Revelations come amid federal government push for additional scrutiny of sector through counter-terror financing and money-laundering laws.
AML/CTF Amendment Bill: A significant development to combating financial crime – 17 September 2024
On 11 September 2024, the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 (the Bill) was introduced into Parliament, a significant development in Australia’s approach to combating financial crime. The Bill represents the long-awaited ‘second tranche’ of reforms to Australia’s anti-money laundering/counter terrorism financing (AML/CTF) regime, which was initially established under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act).
How the AFP cracked an encrypted messaging app used by the criminal underworld – 18 September 2024
https://www.abc.net.au/news/2024-09-18/how-the-afp-cracked-an-encrypted-messaging-app/104368364
Operation Kraken: AFP restrains almost $2 million in assets in WA investigation
In a pre-dawn raid as part of Operation Kraken, the AFP targeted a 32-year-old man police allege is the mastermind of an encrypted communication network used solely by the criminal underworld called ‘Ghost’. The AFP will be alleging that this platform is solely being used for criminality and serious organised crime, drug trafficking, drug importation, tobacco trafficking, firearms trafficking, money laundering, and threats to life and to harm.
Two Victorian men fined $4000 each for betting on the Australian of the Year awards using inside information – 19 September 2024
Two Victorian men were sentenced by the Dandenong Magistrates Court for using inside information to bet on the winner of three Australian of the Year Award. They were charged in June 2023 as part of Operation Maridun, an AFP-led multi-agency investigation into irregular betting on the awards.
Third Person Charged in Multimillion Dollar Fraud Case – 20 September 2024
Financial Crimes Squad detectives have charged a third man for his alleged role in a $10 million financing fraud targeting a Sydney automotive group. The investigation found that the syndicate was allegedly using the stolen personal information of more than 33 people to apply for loans through various financial companies to purchase luxury cars that did not exist.
https://www.miragenews.com/third-person-charged-in-multimillion-dollar-1320734/
Investigation & Fraud News – Week ending 13 September 2024
Former ATSIC head Geoff Clark found guilty of fraud – 11 September 2024
Geoff Clark has faced a series of trials over long-running allegations of fraud, relating to about $1 million illegally obtained from his community’s Aboriginal trust. Three juries across four trials found the former Aboriginal and Torres Strait Islander Commission (ATSIC) head, guilty of 25 charges. Clark will attend a further hearing ahead of sentencing.
https://www.abc.net.au/news/2024-09-04/former-atsic-head-geoff-clark-found-guilty-fraud/104308834
Correlation between money laundering and organised crime under the spotlight – 11 September 2024
The latest research conducted by the Australian Institute of Criminology (AIC) and the Australian Transaction Reports and Analysis Centre (AUSTRAC) shows the close link between organised crime and money laundering and the implications it has on Australian society. The research has found that when organised crime groups have “professional facilitators,” such as lawyers, accountants, and real estate agents, there is an increased likelihood for them to be involved in money laundering and there are usually greater sums of money at play. https://lsj.com.au/articles/correlation-between-money-laundering-and-organised-crime-under-the-spotlight/
https://phys.org/news/2024-09-australian-money-laundering-crime.html
Payment gateway data breach affects 1.7 million credit card owners – 11 September 2024
Payment gateway provider Slim CD, has disclosed a data breach that compromised credit card and personal data belonging to almost 1.7 million individuals. In the notification sent to impacted clients, the company says that hackers had access to its network for nearly a year, between August 2023 and June 2024.
Financial crimes in the Vatican remain unpunished – 11 September 2024
In December 2023, the first cardinal ever to face a criminal trial in the Vatican was convicted of embezzlement and sentenced to a hefty term in prison. Nine other officials were found guilty of a smorgasbord of financial crimes after investigations revealed infighting, intrigue and theft on an enormous scale. But no one is yet behind bars.
https://www.abc.net.au/listen/programs/latenightlive/vatican-politics/104329988
Paul Montgomery stole millions from the Gurney family business. He was known in the racing industry as ‘The Golden Goose’ – 10 September 2024
Paul Montgomery was entrusted with looking after the Gurney’s family finances. Tensions began to build between the brothers over where the money was going and a legal dispute led to a forensic accountant being called. He uncovered large transfers from business accounts to personal accounts belonging to Paul Montgomery. Montgomery’s personal credit card was then being used to deposit large sums of money into betting agency accounts. In total, it was 17 different betting agency payments totalling over $11.5 million.
‘Long overdue’ financial crime laws needed to close regulatory gap – 11 September 2024
Mark Dreyfus says reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime will align the national framework with international standards. Many of the crimes these reforms targeted would stop perpetrators profiting from drug trafficking, tax evasion, cybercrime, human trafficking and arms trafficking.
Australia introduces new hate crime and anti-doxxing legislation amid rising antisemitism – 12 September 2024
Australia’s government has introduced new legislation to combat hate crimes and doxxing, with severe penalties for offenders. The move comes in response to a rise in antisemitic incidents and would impose criminal penalties, including jail, for offenders if they targeted a person’s race, gender, ethnic origin, religion, or sexual orientation.
https://www.jpost.com/international/article-819799
Vietnamese men sentenced for role in cultivating $30 million cannabis crop – 12 September 2024
Four Vietnamese-born men have been sentenced for being involved in a criminal gang and for cultivating a commercial quantity of cannabis. The men were arrested when police raided a remote property in northern New South Wales in November 2022. Three of them will serve their sentence in the community, while the fourth faces deportation once released from jail.
https://www.abc.net.au/news/2024-09-12/cannabis-operation-sentencing-drug-law-court/104328668
Australian military officers to be stripped of honours after alleged war crimes under their command – 12 September 2024
The Australian government has decided to cancel the awards and honours of a small group of former military officers, who held command positions at the time that others under their command were accused of war crimes. Maj Gen Paul Brereton, who led a four-year-long inquiry that presented its findings in 2020, found “credible” information to implicate 25 current or former Australian special forces personnel in the alleged unlawful killing of 39 individuals and the cruel treatment of two others in Afghanistan.
Tech giants, banks and telcos to face massive fines and compensation for failing to protect scam victims under new laws – 13 September 2024
Australian businesses may soon have to comply with new mandatory codes which will put in place new rules about detecting, preventing and responding to scams. The codes will apply to banks, telcos and tech giants. The federal government has released draft legislation for consultation and aims to introduce the news laws later this year.
https://www.abc.net.au/news/2024-09-12/banks-telcos-social-media-fines-scams-code/104346234
Robodebt public servants breached code – 13 September 2024
A new report into the illegal robodebt scheme has found that twelve public servants, including former department heads breached their code of conduct 97 times.
https://www.abc.net.au/listen/programs/worldtoday/robodebt-public-servants-breached-code/104348472
Investigation & Fraud News – Week ending 6 September 2024
B-ASIC Instructions on Aussie Business Communications – 2 September 2024
The Australian Securities and Investments Commission (ASIC) has released new guidance detailing its expectations around business communications. Modelled on approaches taken by American regulators and enforcement agencies, this guidance signals the regulator’s intention to raise compliance standards in Australia. This article breaks down the details and what it means for the Aussie financial services sector.
https://www.corporatecomplianceinsights.com/asic-aussie-business-communications/
More than 1,800 bank accounts linked to organised sextortion scams shut down, AFP reports – 3 September 2024
The AFP’s Operation Huntsman has now shut down over 1,800 Australian bank and cryptocurrency accounts, as well as other financial services, linked to international organised crime syndicates operating sextortion scams against Australian victims. While the news is largely positive, the AFP said it remains concerned at the number of blackmail victims.
Prominent Launceston sportswoman yet to plead on fraud and stealing charges – 3 September 2024
A prominent Launceston sportswoman did not plead when she appeared in the Launceston Magistrates court on stealing, fraud and using a computer to defraud charges.
https://www.examiner.com.au/story/8751227/launceston-sportswoman-faces-fraud-and-theft-charges/
Access to digital version of Examiner required to read article
Alex found guilty of $10m tax fraud conspirac – 3 September 2024
Construction identity George Alex has been found guilty of conspiring to defraud the tax office of more than $10 million through his labour-hire firms, as his marathon six-month trial came to an end. After more than a month of deliberations, the jury returned a guilty verdict for the 53-year-old over the fraud charges, as well as his accused co-conspirators Lindsay Kirschberg, Gordon McAndrew and Peter Loccisano.
https://www.afr.com/wealth/tax/george-alex-found-guilty-of-10m-tax-fraud-conspiracy-20240903-p5k7h4
Whistleblowers urged to come forward after allegations of sexism and ‘macho hero’ culture in Queensland Fire Department – 4 September 2024
Whistleblowers are being told not to “hesitate” in coming forward after an ABC investigation uncovered allegations of sexism in Queensland’s fire department. Minister for Women, Shannon Fentiman, says the reports were “appalling” and “disgusting”. Fentiman says Queensland has some of the strongest whistleblower protections in the country and people impacted should speak up.
AI Tool Predicts Supply Chain Accounting Fraud – 4 September 2024
A group of researchers have devised a new machine learning ‘detective’ that is able to analyse not just fraud at a single firm, but predict likely fraud across whole supply chains and industries. A paper describing the team’s approach was published in the journal Big Data Mining and Analytics on August 28. The Paper describes how AI works to discover hidden patterns, correlations, insights and knowledge through mining and analysing large amounts of data obtained from various applications.
https://www.miragenews.com/ai-tool-predicts-supply-chain-accounting-fraud-1308456/
Corporate wrongdoers more likely to face justice – 4 September 2024
A model of corporate responsibility developed by Melbourne Law School’s Professor Elise Bant has proved decisive in a landmark decision of the High Court, that has placed corporate wrong-doers on notice. The landmark decision explains how corporations can now be held directly responsible for their predatory business models, with the model of corporate responsibility described in the judgment one developed by Professor Bant, whose work is cited in the decision.
https://law.unimelb.edu.au/news/MLS/corporate-wrongdoers-more-likely-to-face-justice
New Research May Speed Up Forensic Analysis in Assault Cases – 4 September 2024
A team of researchers has developed a radical new technique for analysing evidence in sexual assault cases. The new approach could streamline the forensics pipeline and reduce delays in the processing of DNA evidence.
https://www.miragenews.com/new-research-may-speed-up-forensic-analysis-in-1309329/
Asia Pacific faces rising fraud threat, Forrester report warns – 4 September 2024
According to a recent report by Forrester, the Asia Pacific region faces a significant challenge in combating traditional and emerging fraud schemes. The report “Top Trends Shaping Fraud Management In Asia Pacific, 2024” underlines that the rate of fraud incidents in this region surpasses the global average, placing considerable pressure on financial institutions (FIs), merchants, and consumers.
https://securitybrief.com.au/story/asia-pacific-faces-rising-fraud-threat-forrester-report-warns
Halliburton says data exfiltrated in August cyber attack – 4 September 2024
Major US oilfield and gas servicing giant Halliburton has revealed that data was stolen in the cloud-based cyber attack it suffered last month. Halliburton initially disclosed the incident in an 8-K filing on 21 August, revealing that it had discovered an “unauthorised third party” on its systems. The incident has caused disruptions and limitation of access to portions of the company’s business applications supporting aspects of the company’s operations and corporate functions.
https://www.cyberdaily.au/security/11058-halliburton-says-data-exfiltrated-in-august-cyber-attack
ANZ bank called out after Aussie loses $56k in alarming scam – 5 September 2024
A small business founder who was scammed has hit out at ANZ Bank for telling him he should have used a security measure (3DSecure) that he had no idea was available to him. Roland Sharman, lost more than AU$56,000 in 21 fraudulent credit card transactions. His lawyer stated banks have a fiduciary responsibility to prevent customers from being exposed.
ASIO boss pushes for access to encrypted chat rooms – 5 September 2024
ASIO chief Mike Burgess says they might start forcing tech companies to give them access to encrypted chat rooms during security investigations, but tech companies say that could open up a backdoor to the platforms giving bad actors a way in.
Former Melbourne financial planner Bradley Grimm sentenced to jail for dishonest conduct – 5 September 2024
Former Melbourne financial planner Bradley Grimm has been convicted by the County Court of Victoria of three counts of engaging in dishonest conduct while running a financial services business. Mr Grimm engaged in dishonest conduct on five occasions, when he transferred funds between two of his clients’ self-managed superannuation funds (SMSFs) to three separate companies of which he was the sole director.
GP membership fees are breaching Medicare rules – 5 September 2024
Thousands of Australians are being asked to pay membership fees to their local GP, in order to access bulk-billed medical care.
An ABC investigation shows almost 100 clinics are using these schemes, even though experts and the health department say it’s a breach of Medicare rules.
https://www.abc.net.au/news/2024-09-05/gp-membership-fees-are-breaching-medicare-rules/104313194
Merivale hospitality group allegations being assessed by SafeWork NSW and Liquor & Gaming NSW – 6 September 2024
SafeWork NSW is making enquiries into the allegations uncovered by the ABC, which a spokesperson described as “concerning”. Two New South Wales government agencies are assessing allegations that leading hospitality group Merivale condoned drug use at its venues, failed to adequately respond to claims of sexual assault and screened at an awards night uncensored CCTV footage of people having sex.
Investigation & Fraud News – Week ending 30 August 2024
‘Game-changer’ ruling to hit dodgy business tactics – 23 August 2024
The High Court ruled Captain Cook College used a dodgy incentive scheme to help recruiters sign up students. This landmark court decision will mean Corporations could now be held directly responsible for predatory business models.
https://citynews.com.au/2024/game-changer-ruling-to-hit-dodgy-business-tactics/
E-scooter firm accused of audacious scam – 25 August 2024
The Australian revealed at the weekend that a Singapore-based company had allegedly put hundreds of extra “phantom” e-scooters on city streets in Australia and New Zealand to cheat local governments out of vehicle registration fees and in defiance of pedestrian safety caps.
Access to digital version of the Australian required to read article
Pig butchering: The vicious love scam trapping victims around the world – 25 August 2024
There’s a sickening reason most scammers are so persistent: if they fail – or refuse – to con us out of our savings, they’re punished, beaten and tortured. Many are trafficked and held captive in vast compounds under the guard of armed militia, on the lawless Myanmar side of the Thailand border.
Security robots are starting to join the ranks of human guards. Here’s what we know – 26 August 2024
From New York to Hawaii, people can spot security robots equipped with a suite of sensors patrolling the perimeters of some residential communities and apartment buildings.
Security robots are rapidly becoming a viable complement to human security guards, sparking concerns about privacy issues and potential job losses in the security field.
Critics are also raising questions about their effectiveness of keeping the public safe.
Former Brisbane financial adviser Ben Jayaweera sentenced to 12 years imprisonment for fraud at retrial – 27 August 2024
Ben Jayaweera, a former financial adviser and director of Growth Plus Financial Group Pty Ltd (in Liquidation), has been sentenced to 12 years’ imprisonment. A jury found Mr Jayaweera guilty of 28 counts of fraud. Over the course of 28 transactions, Mr Jayaweera caused 12 former clients a total detriment of $5,958,870.
ASIC finds Australian banks’ scam detection, prevention and response practices to be ‘less mature than expected’ – 27 August 2024
In April 2023, ASIC released Report 761 Scam prevention, detection and response by the four major banks (Initial Report) which found that the big four banks’ approach to scam strategy and governance was ‘less mature than expected’. ASIC has now released ‘REP 790 Anti-scam practices of banks outside the major four banks’ (Report). ASIC’s key message is that all banks and financial services businesses should consider the findings in this Report and the Initial Report, and take steps to advance their scam prevention, detection and response activities. In ASIC’s view, this should be one of the highest priorities for these organisations.
APESB defers decision on CA ANZ request for new reporting – 27 August 2024
The Accounting Professional and Ethical Standards Board (APESB) has responded to a request by Chartered Accountants ANZ (CA ANZ) to introduce a requirement for members to report wrongdoing committed by other members to the relevant professional body. The APESB has concerns about the “potential unintended consequences” on members if mandatory reporting is implemented without adequate legislative protections for whistleblowing.
‘Bored’ CBA staffer stole details of hundreds of customers to feed fraud – 27 August 2024
Curtis McNulty stole more than $53000 from PayPal while working for the bank in Sydney, mainly by using fraudulent refunds for items such as $3000 sneakers.
Access to digital version of SMH required to read article
NDIA and Fraud Fusion Taskforce intensifies investigations to catch crook – 27 August 2024
A recent series of early morning raids, payment locks and increased prosecutions on suspected fraudulent and criminal National Disability Insurance Scheme (NDIS) providers is showing Labor’s crackdown on frauds and rorts is having big results. In the past few weeks alone, three warrants have been executed by the National Disability Insurance Agency-led Fraud Fusion Taskforce, with hundreds more prosecutions expected to result from other ongoing investigations.
Banking Ombudsman launches investigation after Westpac customer loses $323,000 in investment scam, bank CEO ‘sorry’ for loss – 28 August 2024
The banking watchdog has launched an investigation into one of the country’s biggest banks after an Australian-based Kiwi couple lost more than $300,000 in an investment scam. The victim said the bank gave him “false confidence” that the investment proceeds were being safely transferred to an account set up under his own name. In reality, the account name wasn’t checked, the money was sent to a “mule” account under a different name and the supposed investment was a sham.
Sydney man sentenced for fraud offences after swindling $53,000 from financial organisation – 28 August 2024
A former Australian bank employee used personal identification information of bank customers to facilitate fraudulent activities, resulting in obtaining more than $53,000 in criminal proceeds from the financial organisation. The man utilised bank customer details to open falsely registered accounts and obtain numerous debit cards.
He investigated murders, then got a law degree. Now he’s coming after bad execs – 29 August 2024
Dale McQualter turned in his badge for a practising certificate after more than a decade in the Victorian Police. He is part of a small but growing cohort of lawyers who have leveraged investigations experience at regulators or law enforcement agencies to carve out a practice in a growing area of demand as large companies look to law firms to handle sensitive internal issues.
