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Investigation & Fraud News – Week ending 18 February 2022
13 stories this week:
‘Whistleblowers are suffering’: Lawyers renew calls to drop Collaery prosecution – 9 February 2022
Bernard Collaery is the whistleblower that revealed that the federal government spied on neighbour Timor-Leste during tense negotiations. The proceedings returned before the ACT Supreme Court to hear the Attorney-General’s request to add further, secret evidence. This will support its attempt to reverse an ACT Court of Appeal judgment that denied the federal government a secret trial.
Australian cryptocurrency investors targeted in fake crypto app scam, but Google says it ‘takes action’ when ‘violations found’ – 10 February 2022
The Australian Tax Office estimates up to 600,000 Australians have invested in “crypto-assets”. The latest scam involves fake apps offered on stores like Google Play.
CQUniversity pilot project to byte into cybercrime menace costing Australians billions – 11 February 2022
A CQUniversity-led tech team hopes its prototype device can help Australian businesses combat an escalating cybercrime crisis, which cost the nation a staggering $33 billion last year. The device will snip and sit in the network and whenever there is a human error – such as letting the default password onto your smart device or forgetting to encrypt customer data to your database – it will identify them and prepare a report.
Nuix not out of the woods as yet as ASIC continues to probe – 12 February 2022
ASIC concluded an investigation into the Nuix prospectus and said it was not taking any further action.
(Access to digital version of SMH required to read article.)
Australia drops landmark criminal cartel case against Citi, Deutsche – 12 February 2022
A cartel lawsuit against Citigroup Inc, Deutsche Bank AG and four former executives over a $1.8 billion share issue has been withdrawn. The move ends a challenge to the way investment banks jointly underwrite capital raisings and removes the threat of jail for the former bank executives.
The “Bonnie and Clyde” of cybercrime: a record seizure of stolen bitcoins – 14 February 2022
Heather Morgan and Ilya Lichtenstein were arrested in the United States where they are suspected of having tried to launder more than three billion dollars in stolen bitcoins. The FBI says they tried to hide their tracks using “an extensive range of cutting-edge technologies”.
Trump Organization accountants say financial statements should ‘no longer be relied upon’ – 15 February 2022
The accounting firm that prepared Donald Trump’s annual financial statements says the documents “should no longer be relied upon”, after New York’s Attorney-General said they regularly misstated the value of assets. New York’s Attorney-General is investigating “fraudulent or misleading” valuations.
ACCC issues warning over surge in romance scams – 15 February 2022
Scamwatch noted 3,400 filed romance scam cases that cost Australians $56 million – a 44% increase from the year prior. Keeping in mind that only 13% of victims report the incident. Luring people into handing over money and romance baiting, to lure them into investing in cryptocurrency are the most common romance scams.
https://psnews.com.au/2022/02/16/dating-scams-deliver-financial-heartbreak/
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Fraud sentencing set for March – 15 February 2022
A former financial officer of the Mulwala Water Ski Club has been committed to the NSW District Court for sentencing on three counts of ‘dishonestly obtain financial benefit by deception’. Ms Kaye Leanne Ferguson was initially charged with 27 counts of dishonestly obtain financial advantage by deception after transferring more than $1.1 million from the club to multiple offshore bank accounts between December 2020 and January 2021.
https://www.sheppnews.com.au/news/fraud-sentencing-set-for-march/
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Hollywood email scam nets $900m – 17 February 2022
Los Angeles actor Zachary Horwitz, fabricated email communications, convincing investors to hand over cash, telling them that their money would be used to acquire film distribution rights, which would then be licensed to online platforms like Netflix and HBO. Horwitz was sentenced to 20 years behind bars after admitting he operated a multimillion-dollar Ponzi scheme.
https://ia.acs.org.au/article/2022/elaborate-hollywood-email-scam-nets–900m.html
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Criminal abuse’: record sums of illicit money in cryptocurrency, report says – 17 February 2022′
A report from Chainalysis, reveals record sums of illicit money are being channelled through cryptocurrencies, including theft and money laundering. The research estimates that $A12 billion was laundered in cryptocurrency in 2021, a 30 per cent increase from 2020.
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Warning of fraud risks as travel resumes – 18 February 2022
A new report has warned of vaccination-related fraud risks as Australia reopens to international travellers in coming months. The U4 Anti-corruption Resource Centre told the committee organised crime networks, corrupt healthcare workers and anti-vaxxers were the main perpetrators of fraud.
https://www.canberratimes.com.au/story/7625542/warning-of-fraud-risks-as-travel-resumes/?cs=14231
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Embellishing the truth in a CV is common. But here’s where you can cross the line into fraud – 18 February 2022
Article describes examples of where there’s a clear point at which an embellished CV ventures into criminal territory.
Investigation & Fraud News – Week ending 11 February 2022
17 stories this week:
ATO puts out urgent alert warning of cryptocurrency scam – posted 4 February 2022
Fake texts claiming to be from the Australian Tax Office (ATO) attempt to pin the receiver for cryptocurrency tax evasion and encourage mobile phone users to provide information about their online wallets.
Sydney man’s plan to retire at 58 backfires after epic crypto hack – posted 4 February 2022
Scammers have cleaned out a man’s cryptocurrency portfolio and now, six months later, the couple have lost any hope of getting 100k back after investigations hit a dead end.
US attorney, Michael Avenatti, convicted of stealing from Stormy Daniels over book deal detailing tryst with Donald Trump – posted 5 February 2022
US attorney Michael Avenatti, has been convicted of cheating porn actor Stormy Daniels, out of nearly $300,000 she was supposed to get for writing a book, about an alleged tryst with former president Donald Trump.
Australia: NSW regulator takes Melco to Supreme Court for $2.6B in costs over Crown inquiry – posted 7 February 2022
Melco Resorts & Entertainment is being taken to court by the New South Wales gaming regulator. The operator could pay millions of dollars, over its role in the inquiry led by Commissioner Patricia Bergin into Australian gaming giant Crown Resorts. The probe found a series of failures in corporate governance, including money laundering at the company’s casinos.
Corporate Giant Accused of Systemic Workplace Bullying and Harassment – posted 7 February 2022
Corporate giant DP World has been publicly called out by a number of its employees who claim the company is covering up systemic bullying, assault and harassment. It’s also claimed the company actively protects perpetrators and vilifies victims.
Criminal charges are ‘nonsense’: Palmer – posted 8 February 2022
Clive Palmer who faces two counts of dishonestly for misusing his position as a director and two counts of dishonestly gaining a benefit or advantage, says that the criminal fraud charges against him, are a bid to “do him slowly” with no real prospect of conviction.
https://www.aap.com.au/news/criminal-charges-are-nonsense-palmer/
Woman jailed after stealing nearly $1m to play gaming app that never paid out – posted 8 February 2022
Tammy Maree Buckley has been sentenced to six and a half years in jail after swindling almost $1 million from her employer to play a gambling app on her mobile phone. The court heard that she committed 202 fraudulent transactions over a year.
Collaery charges must be dropped and whistleblowing laws overhauled – posted 8 February 2022
The Human Rights Law Centre has called on the Morrison government to drop the unjust charges against whistleblower Bernard Collaery and urgently reform Australia’s whistleblower protection laws. Kieran Pender, Senior Lawyer at the Human Rights Law Centre, said ”Whistleblowers should be protected, not punished”.
$2.75 million cash seized by Federal authorities in Western Australia – posted 8 February 2022
$2.75 million in illicit cash and three luxury cars have been confiscated after three separate investigations in Western Australia. The investigation began after receiving financial intelligence from AUSTRAC that identified suspicious account activity and large funds transfers between bank accounts in WA and Thailand.
AVO to protect investigator taken out against Melissa Caddick’s husband – posted 9 February 2022
Police are seeking an apprehended violence order against the husband of Sydney fraudster Melissa Caddick, to protect Isabella Allen, who is investigating her multi-million-dollar “Ponzi scheme”.
https://www.abc.net.au/news/2022-02-09/melissa-caddick-husand-anthony-koletti-faces-avo/100815418
Star Sydney Encouraged Local High Rollers to Lie in Possible Tax Dodge: Whistleblowers – posted 9 February 2022
Two former workers at The Star, said they were directly involved in a scheme that encouraged VIP gamblers based locally in the state of NSW to claim they lived elsewhere. In return, the casino would give them lucrative rewards. That’s because the Star would ultimately have to pay less in tax to the NSW government as a result.
https://www.casino.org/news/star-sydney-encouraged-local-high-rollers-to-lie-in-possible-tax-dodge/
Australia’s wealthiest man files landmark legal action against Facebook – posted 9 February 20221.
Billionaire Dr Andrew “Twiggy” Forrest AO, the wealthiest man in Australia, has initiated criminal proceedings in the WA Magistrates Court against Meta, formerly known as Facebook. He has claimed that Facebook breached federal AML laws by facilitating clickbait advertising scams.
Bill Papas’ business partner wants court to throw out ‘weak case’ against him – posted 9 February 2022
Westpac has accused Mr Tesoriero of being part of a conspiracy with Mr Papas to commit the fraud against the bank and knowingly assisting Mr Papas in conducting it. Mr Tesoriero has launched a bid to have the civil case brought against him thrown out because it is “very weak”.
Child safety probe ordered in north Qld – posted 9 February 2022
The Queensland government will probe claims that vulnerable children are being removed from foster care and sent back to their biological parents in unsafe homes.
https://au.news.yahoo.com/child-safety-probe-ordered-north-073628514.html
Meta files Nigeria ‘phishing scam’ lawsuit – posted 9 February 2022
Meta and banking group Chime have launched a lawsuit against alleged Nigerian ‘phishing’ scammer attacks, that deceive people and gain access to their online financial accounts.
https://7news.com.au/news/crime/meta-files-nigeria-phishing-scam-lawsuit-c-5627323
Emily Jane Walker and Jason Bran Lees sentenced in Adelaide over ‘sophisticated’ computer hacking scheme – posted 10 February 2022
An Adelaide couple involved in a “sophisticated and large-scale computer hacking scheme” that diverted more than $1.15 million from small businesses and not-for-profit organisations across Australia to fund their drug addictions have been jailed. Lees was sentenced to serve at least five years jail, while Walker was sentenced to serve at least two.
https://www.abc.net.au/news/2022-02-10/couple-sentenced-over-hacking-of-businesses/100819786
Couple accused of laundering $5 billion in hacked bitcoin, which was only worth $100 million when it was stolen – posted 10 February 2022
A couple in New York faces charges of conspiring to launder approx. 5 million (AUD) dollars in cryptocurrency, stolen from a 2016 hack of a virtual currency exchange. Much of the laundering occurred through accounts on a dark web site since shut down and the laundered bitcoin was used to purchase gold, NFTS and gift cards.
https://www.abc.net.au/news/2022-02-09/us-new-york-couple-arrested-bitcoin-theft/100815296
Investigation & Fraud News – Week ending 4 February 2022
20 stories this week:
‘If you don’t understand it, don’t use it’: How to protect your crypto (posted 20 January 2022)
According to national competition regulator the ACCC, more than $35 million was lost in Australia to cryptocurrency scams by mid-2021. Cryptocurrency is vulnerable because everyone wants to get in early and make a buck in the online economy. Article details how to protect your cryptocurrency but also states if you don’t understand it – don’t use it.
https://thenewdaily.com.au/finance/2022/01/20/cryptocurrency-cyber-security/
Why organizations mustn’t ignore the threat of voice fraud (posted 21 January 2022)
Phone crime has an obvious appeal over direct physical crime, as the offender is well out of harm’s way and the more skilled criminals make themselves very difficult to trace. Commonly, fraudsters bank on social engineering techniques to aid them in their goal of tricking call center agents or consumers into handing over information. Article looks at how artificial intelligence and machine learning help organizations to combat voice fraud.
https://www.techradar.com/au/features/why-organizations-mustnt-ignore-the-threat-of-voice-fraud
Addresses oversight and over-reach risks of Australian laws (posted 21 January 2022)
“Everyday Australians” have more to fear from surveillance carried out by ‘big tech’ and private companies than from government and intelligence agencies, according to Home Affairs boss Michael Pezzullo. Home Affairs is currently leading a major consultation around replacing a “patchwork” of surveillance and interception laws with a single, technology neutral Act. Pezzullo said that the government wanted to produce legislation that would set a standard for “self-restraining surveillance”.
Australians lost a record $323 million to scams in 2021 (posted 21 January 2022)
Money lost to scams almost doubled in one year, with more than 286,000 Aussies reporting they were scammed last year. These figures represent a ‘significant’ increase of 84% compared to 2020, when Aussies lost $175.6 million through the year. Investment scams accounted for $177 million, followed by dating and romance scams which saw people losing $52 million.
https://www.savings.com.au/news/scamwatch-2021
The Hollywood Con Queen lured hundreds of people into a bizarre scam, but the biggest twist was yet to come (posted 23 January 2022)
The scam of luring creative artists to Indonesia from all over the world – actors, movie producers, make-up artists, photographers etc. went on for years. As the scam grew in its scale and audacity, it became clear a sophisticated fraudster was impersonating powerful women. Finally, after Nicoletta Kotsianas and the K2 investigators had gathered a critical mass of evidence, proving the magnitude of the scam and the scale of the total monetary losses – well over $1.39 million – the FBI stepped in. Hargobind Punjabi Tahilramani, a 41-year-old Indonesian man has now been charged with several counts of wire fraud and aggravated identity theft.
https://www.abc.net.au/news/2022-01-23/hollywood-con-queen-scam/100741998
COVID drives up scams, ethics down for Australian business (posted 23 January 2022)
Has the lucky country become the dodgy country? It’s hard to escape that conclusion from the latest Global Integrity Report from accounting and consulting group EY, which positions Australia an outlier in terms of both suffering from, and perpetrating, unethical behaviour.
(Access to digital version of AFR required to read articlae.)
When it comes to sexual assault, safety apps aren’t the answer (posted 24 January 2022)
“Walk Me Home” and similar apps, has been rightly lamented by critics as another Band-Aid solution that (again) places the onus on women to protect themselves, and ultimately fails to tackle the root cause of male violence. A good controversial article about using technology as a solution to victims of crime before it occurs.
Crypto fraudster Stefan Qin reveals why he stole $123m (posted 24 January 2022)
A Canberra-born crypto crook who swindled $123 million from investors has given a tell-all interview about why he did it, before entering prison. Stefan Qin was found guilty of deliberately misleading Australian and US investors and falsifying account statements while running his crypto outfit Virgil Sigma Fund.
The Price of Speaking Out: Australia’s Hostile Environment for Whistleblowers (posted 27 January 2022)
Gerd Schroder-Turk was sued for millions of dollars after he spoke up about the treatment of students at Murdoch University. The article outlines that whilst the government is making moves towards bringing the public sector in line with the private, the current internal protections for private sector disclosures are “inadequate” and “largely imaginary.”
https://www.vice.com/en/article/5dg5yk/australias-hostile-environment-whistleblowers
Hewlett-Packard Enterprise wins multi-billion-dollar fraud suit against UK tech tycoon Michael Lynch (posted 29 January 2022)
Technology company Hewlett-Packard Enterprise has won a multi-billion-dollar lawsuit against a British businessmen it accused of fraud after purchasing his software business, Autonomy, a decade ago. Mr Lynch and Autonomy’s former chief financial officer, Sushovan Hussain, were accused of artificially inflating the company’s revenues
https://www.abc.net.au/news/2022-01-29/hewlett-packard-fraud-suit-michael-lynch-autonomy/100789874
Death threats, ghost researchers and sock puppets: Inside the weird, wild world of dodgy academic research (posted 31 January 2022)
Former Swinburne University academic Ali Nazari has had 86 papers retracted and Ehsan Mohseni from the University of Newcastle, has also had several papers withdrawn. Unlike many other countries, Australia has no national office for research integrity.
https://www.abc.net.au/news/2022-01-31/on-the-trail-of-dodgy-academic-research/100788052
Former BRADAAG CEO denies allegations of misusing funds, bullying staff at Tennant Creek rehab service (posted 31 January 2022)
Northern Territory government authorities have confirmed they are investigating allegations that the former Chief Executive a critical alcohol rehabilitation service, misused its resources and bullied an employee.
Caught up in the great buy now, pay later scam (posted 31 January 2022)
Identity theft and buy now pay later schemes.
(Access to digital version of AFR required to read article.)
Financial advisor jailed for Dishonestly Obtaining Financial Advantage by Deception (posted 1 February 2022)
A former financial advisor Ahmed Saad has been sentenced to jail for dishonestly obtaining financial advantage by deception after unlawfully giving clients early access to their superannuation funds.
Ex-RAAF man in court over fraud of 95y (posted 2 February 2022)
Partlin, of Birkdale, Brisbane, allegedly dishonestly induced a 95 year old man to part with $680,000 over three months in 2020 and allegedly accessed the man’s bank account stealing $20,000.
https://www.northernbeachesreview.com.au/story/7604966/ex-raaf-man-in-court-over-fraud-of-95yo/
Queensland whistleblowers need better protection, Logan Mayor Darren Power says (posted 2 February 2022)
The Mayor of Logan Darren Power says Queensland needs better protections for whistleblowers. His comments come after Premier Annastacia Palaszczuk appointed Tony Fitzgerald to conduct an inquiry into the structure and powers of Queensland’s Crime and Corruption Commission (CCC).
Former Canberra Vodafone shop owner Mohit Arora avoids jail after allowing his customers to be defrauded (posted 3 February 2022)
Mohit Arora allowed criminals to steal the personal details of his Vodafone store customers has avoided time in prison. The criminal group stole the identities to set up fake credit cards and loans in 2019 and 2020.
Australian mining billionaire files lawsuit against Facebook over scam ads (posted 3 February 2022)
Iron ore magnate Andrew Forrest is launching criminal proceedings against Meta Platform (Facebook) in an Australian court, alleging that it breached anti-money laundering laws and its platform is used to scam Australians. He is alleging Facebook “failed to create controls or a corporate culture to prevent its systems being used to commit crime.
Meta accused by whistleblower of skimping on safety in Australia (posted 3 February 2022)
According to former Facebook employee and whistleblower Frances Haugen, Meta is underinvesting in the safety and security of its social media platforms in overseas markets, meaning there is less avenues for recourse available to Australians. The whistleblower states the company’s budget “disproportionately” favoured the United States.
Big banks fight push for billions of dollars in scam refunds (posted 3 February 2022)
ASIC is currently reviewing the ePayments code, a voluntary code of practice that contains consumer protections for electronic payments, in a process that has been plagued by delays. However, Australia’s major banks are fighting a push from regulators to force them to refund billions of dollars lost in online scams, arguing requirements to bear the costs of internet fraud could create complacency among consumers and lead to even more losses.
Investigation & Fraud News – Week ending 21 January 2022
12 stories this week:
Kim Kardashian and Floyd Mayweather sued over alleged crypto scam – 14 January 2022
The celebrity reality TV star and boxer are facing a lawsuit alleging they misled online followers into buying crypto as part of a “pump and dump” scheme. The lawsuit claims that the celebrities made “false or misleading statements” while promoting a crypto token sold by ethereum, or EMAX.
Santos agrees to pay $400k to Rallen over Beetaloo Basin gas wells dispute – 14 January 2022
Rallen Australia (Australia’s biggest landholding company) had taken the multinational energy company Santos to court, alleging they had misled and deceived farmers by not alerting them to revisions of the Environmental Management Plan (EMP), the company had undertaken to add two additional gas wells to the land at Tanumbirini Station.
https://ntindependent.com.au/santos-agrees-to-pay-400k-to-rallen-over-beetaloo-basin-gas-wells/
Dirty cash and crypto: how the booming cryptocurrency market is open to exploitation – 15 January 2022
Austrac, says the criminal use of cryptocurrency is no longer confined to online scammers like Evan Leslie McMahon who used faked Paypal accounts to store money. Now criminals are trying to deposit criminal proceeds through a digital currency exchange provider and send money to a counterpart offshore using cryptocurrency itself.
North Korean hackers stole $550m worth of cryptocurrency in 2021, report say – 15 January 2022
North Korea is described as the country “that supports cryptocurrency-enabled crime on a massive scale”. It launched at least seven attacks on cryptocurrency platforms in 2021, extracting nearly $US400 million ($550 million) worth of digital assets, one of its most successful years on record. The United Nations has accused Pyongyang of using stolen funds to support its nuclear and ballistic missile programs to circumvent sanctions.
https://www.abc.net.au/news/2022-01-15/north-korea-cryptocurrency-hack/100758468
https://www.news.com.au/technology/north-koreas-cryptocurrency-crimes-on-a-massive-scale/news-story/bf56c67bc656bab721e3093d9ee12784
‘Do not rely on social media ads’: ASIC warns Australians with self-managed super funds that cryptocurrency scams are on the move – 17 January 2022
The financial market watchdog has issued a clear warning about cryptocurrency scams impacting self-managed super funds, as fraudsters continue to target older Australians and their retirement savings. In December, the Australian Competition and Consumer Commission declared losses of up to $109 million.
https://www.businessinsider.com.au/cryuptocurrency-scam-self-managed-super-fund-asic
https://www.channelnews.com.au/asic-warns-of-crypto-superannuation-scams/
Market expected to expand with a CAGR of 8.3% over the forecast period from 2017 to 2025 – 17 January 2022
One of the popular methods of crime detection is the use of forensics technology. The rising influence of forensic technologies in various crime investigation scenarios will present an array of opportunities for the forensic technologies market during the forecast period of 2017-2025. Transparency Market Research’s (TMR’s) report on the forensic technologies market has every component that will assist the stakeholder in understanding the current scenario. The link is in the article.
European Union: Exposing The Truth: What The EU Whistleblower Directive Means For Global Business – 18 January 2022
The global pandemic has heightened issues around whistleblowing like never before. On December 17, there was the implementation of the EU’s new whistleblowing directive that was due to be adopted into national laws by different EU states, but as a consequence further issues and challenges have come about.
How to avoid ATO crackdown on SMSF early withdrawal scam – 19 January 2022
The ATO will be looking out for self-managed super funds (SMSFs) that lodge late returns in its crackdown on unlawful early withdrawal of savings, according to scheme specialists. Paul Rafton, superannuation national leader for BDO Australia, an accounting, tax and consulting group, says late lodgement is one of the ATO’s triggers for launching an investigation.
(Access to digital version of AFR required to read article.)
Australia, UK to jointly target state-based actors and ransomware groups – 20 January 2022
Australia and the United Kingdom have signed a pact to crack down on state-based actors, ransomware groups and other “malign actors” that use cyber attacks to “undermine freedom and democracy”. The two countries also intend to “strengthen the resilience and response capabilities of countries in the Indo-Pacific region to malicious cyber activity via joint capacity building activity”.
New York attorney-general says Donald Trump’s company misled banks, tax officials – 20 January 2022
Former US president Donald Trump’s company has misrepresented the value of its assets by millions of dollars to get loans, insurance and tax breaks, according to documents filed by the New York attorney-general.
Financial crime in 2021: Year in review – 20 January 2022
The past 12 months have been eventful in the world of financial crime. From policy reforms to the Pandora Papers to pandemic fraud, compliance professionals, law enforcement and legislators have had plenty to chew on. This article summarises ten of the most important events of 2021, with a view to what we can expect in the coming year.
https://www.linkedin.com/pulse/financial-crime-2021-year-review-aperio-intelligence/
Investment and romance scams soar as Australians lose record $323 million in 2021 – 20 January 2022
Australians unwittingly handed over a record $323.7 million to scammers in 2021, leaping 84 per cent compared to 2020, according to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch. There were 286,608 reports made to Scamwatch in 2021, up 32 per cent on the year before. cammers continued to leverage the global pandemic, state-wide lockdowns and remote working.
