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Investigation & Fraud News – Week ending 16 July 2021
15 stories this week:
New data reveals AFCA received a whopping 70,000 complaints in the last year generating millions of dollars worth of refunds to Aussies – 8 July 2021
The Australian Financial Complaints Authority (AFCA), a non-government ombudsman, received 70,000 complaints over the 2021 financial year and secured more than $240 million in compensation and refunds. The most complained about products were: Credit cards (14%) Home loans (9%) and Personal transaction accounts (8%)
https://www.finder.com.au/240m-afca-refunds-approvedaction-investigation/
Long-running, calculated and elaborate fraud’: Firm at the centre of Westpac scandal to be wound up – 9 July 2021
The Federal Court has ordered the company “Forum Finance” at the centre of an alleged $250 million fraud against banking giant Westpac be placed into liquidation, while the exact whereabouts of its football personality (Bill Papas) the director remain unknown.
Major crypto scammer sentenced to 15 years in prison – 9 July 2021
The mastermind behind what the government says is one of the largest cryptocurrency Ponzi schemes prosecuted in the US has been sentenced to 15 years in prison. Roger Nils-Jonas Karlsson, defrauded thousands of victims and stole tens of millions of dollars over 10 years.
https://au.finance.yahoo.com/news/crypto-ponzi-scam-roger-nils-jonas-karlsson-doj-071142854.html
MAFS star to face trial over fraud scam – 9 July 2021
It is alleged that Daniel Webb who was a reality television contestant, was involved with a multi-million dollar “boiler room” telemarketing scam. The prosecution argues the scam raked in about $24 million from hundreds of victims in 2013 and 2014.
https://thewest.com.au/news/crime/mafs-star-to-face-trial-over-fraud-scam-c-3355449
Queensland director hit with ASIC penalty – 9 July 2021
A Queensland director has been disqualified from managing corporations for three years following an investigation by ASIC. He “failed to exercise his powers and discharge as a director with care and diligence, good faith and in the best interest of the companies; failed to take reasonable steps to ensure that the companies complied with their obligations to keep accurate written financial records; and failed to assist the liquidators by not delivering the companies’ books and records”.
https://www.mybusiness.com.au/human-resources/8269-queensland-director-hit-with-asic-penalty
Shred Away Identity Theft – 10 July 2021
The Labor Government is reminding people to dispose of confidential documents securely, while working from home to protect themselves from identity theft. This is often done by scammers physically stealing personal information through mailboxes or discarded documents or fake emails.
https://www.miragenews.com/shred-away-identity-theft-593580/
Australians lost $7.2 million in home computer scam – 12 July 2021
ACCC’s Scamwatch said scammers have stolen more than $7.2 million from Australians by gaining access to home computers so far this year. Scammers take advantage of the ability to remotely access people’s computers or smart phones.
https://infotechlead.com/security/australians-lost-7-2-million-in-home-computer-scam-67466
‘Real and present danger’: Government considers making company directors personally liable for cyber attacks – 13 July 2021
Company directors could be held personally responsible for cyber attacks, under new standards being discussed with industry.
Corporate watchdog takes SmileDirectClub to court, alleging thousands misled by teeth straightening insurance claims – 13 July 2021
Tens of thousands of Australians ordered clear teeth aligners and underwent treatment after allegedly being incorrectly told, their health insurance would cover part of it. ASIC has alleged this was false and misleading.
Australians losing billions of dollars to cyber crime: Report – 13 July 2021
A report published by the Australian Institute of Criminology (AIC) said citizens were losing billions of dollars every year to cyber crime. It found that Australians spend A$1.4 billion on preventing cyber crime every year and A$597 million on dealing with the consequences of cyber attacks.
British police seize record $545m haul of cryptocurrency – 14 July 2021
British police have seized record hauls of cryptocurrency totalling A$545 million as part of an investigation into money laundering, after organised crime groups moved into cyptocurrencies to wash their dirty money.
https://www.itnews.com.au/news/british-police-seize-record-545m-haul-of-cryptocurrency-567311
Japan bank reveals $100 million Forum Finance exposure – 14 July 2021
Sumitomo Mitsui Banking of Japan has become the latest major bank trapped by an alleged fraud carried out by Sydney-based firm Forum Finance, with an exposure of nearly $100 million.
Finfluencers are on the rise, so are they friend or foe? It can be murky territory – 14 July 2021
The laws around providing unlicensed financial advice are murky. Recently there have been calls for more regulation and oversight with the influx of finfluencers. https://www.abc.net.au/news/2021-07-14/finfluencer-tik-tok-instagram-social-media-financial-advice/100289102
Cyber criminals increasingly target builders – 14 July 2021
Cyber criminals are increasingly targeting the construction industry and, as large builders improve their guard and systems, hackers are training their sights on smaller companies such as consultants, contractors and suppliers.
https://www.afr.com/property/commercial/cyber-criminals-increasingly-target-builders-20210713-p589ez
Fraudsters discover the easiest way to rob a bank – 15 July 2021
A good article summarising how invoice financing fraud has occurred with the Forum Finance and Westpac situation and why these incidents continue to occur. Forum Finance, sold products (ie case waste management devices) – to large reputable customers that paid using a Westpac loan. Westpac, however, paid the money directly to the vendor business and relied on that business to pass on the lease payments that were being made by the customer. The invoices presented to the bank showing what the reputable customer owed facilitated the transfer, while the assets were the collateral that could be taken if the customer never paid. The problem is that the products allegedly didn’t exist: the invoices appear to be fabricated, while the lease payments weren’t made by the customer but by the business to keep up appearances. The whereabouts of the balance is now a mystery.
Investigation & Fraud News – Week ending 9 July 2021
12 stories this week:
ASIC warns about social media-driven ‘pump and dump’ scams – 2 July 2021
“Pump and dump” is a scam in which criminals artificially inflate the price of a stock, by promoting fake news or positive depictions of a company, in order to increase trading and profit by later selling the inflated shares. Melbourne trader Gabriel Govinda has appeared in the Magistrate’s Court faced with 23 charges of market manipulation and 19 charges of illegal dissemination of information.
Westpac alleges football tycoon’s firm engaged in $200m fraud – 2 July 2021
Federal Court proceedings have been filed against ‘Forum Finance’, after the discovery of allegedly fraudulent activity of $200 million involving a finance company controlled by the owner of the Sydney Olympic Football Club, Bill Papas.
‘Long-running, calculated and elaborate fraud’: Firm at the centre of Westpac scandal to be wound up – 9 July 2021
Dirty money: How the banks and AUSTRAC are fighting back against financial crime – 2 July 2021
Financial crimes watchdog AUSTRAC raised concerns about NABs compliance this week, as the financial industry is confronted with complex anti-money laundering, as criminals become more and more sophisticated.
Black Hats, tax havens: Australia’s biggest insider trading probe revealed – 3 July 2021
A questionable transfer of Nuix shares to Stephen Doyle’s Swiss-based brother Ross, is now part of an ASIC investigation into whether the family, may have pulled off one of the country’s biggest insider trading heists, using companies in offshore tax havens to disguise their tracks.
Senior cardinal, 9 others, face Vatican fraud tri – 3 July 2021
An influential Cardinal Angelo Becciu and nine others will be tried over alleged financial wrongdoing linked to the purchase of a plush London property. Becciu will be prosecuted over embezzlement, abuse of power and witness tampering.
https://au.news.yahoo.com/senior-cardinal-9-others-face-114840738.html
The Trump Organization has been charged with tax fraud. What could that mean for the former president’s company – 4 July 2021
Former US president Donald Trump’s company was hit with charges of criminal tax fraud this week, with allegations it helped executives cheat their own taxes.
https://www.abc.net.au/news/2021-07-04/donald-trump-organization-tax-fraud-charges/100266220
Alleged fraudster moved $8 million of clients’ money through Crown casino – 5 July 2021
Crown Resorts has called an immediate inquiry into claims an alleged fugitive corporate fraudster (Michael Gu) laundered millions of dollars through its Melbourne casino. Mr Gu then either withdrew the money or used it for gambling.
‘I smell a rat’: Westpac alleged fraud leaves trail of forged signatures, false documents – 6 July 2021
Westpac says at least seven major corporate customers including Coles, Woolworths, Veolia and WesTrac have been caught up in an alleged fraud involving fake invoices and forged signatures that could cost the bank more than $290 million.
Prison disciplinary hearings held ‘in the dark’ with little transparency – 7 July 2021
Victoria’s Ombudsman has found that prisoners were denied basic procedural fairness, because there was no formal requirement for written reasons for decisions and no internal review processes in place.
5 giveaway signs of stock market scams and how to avoid them – 7 July 2021
The Australian Competition and Consumer Commission’s (ACCC) Scamwatch reported recently that last year alone, Australians lost $176.1 million to scams, up by almost 23 per cent in 2019. Article details how investors spot stock market scammers and, more importantly, how to avoid them.
https://www.nestegg.com.au/save-money/scams/5-giveaway-signs-of-stock-market-scams-how-to-avoid-them
Family Court judge resigns amid sexual harassment investigation – 8 July 2021
Joe Harman a Family Court judge, based in Parramatta has resigned after an independent investigation found that he had sexually harassed two junior female court staff and had a history of breaching protocol. https://www.lawyersweekly.com.au/biglaw/31872-family-court-judge-resigns-amid-sexual-harassment-investigation
Investigation & Fraud News – Week ending 3 July 2021
10 stories this week:
Not-for-profit fraudster tells court she was catfished by American soldier – 24 June 2021
A mother-of-two who stole almost $150,000 from a community not-for-profit while employed as a financial controller and coordinator, says she was being catfished by a fake American soldier who romanced her online.
Pyrmont penthouse owned by former Nuix CFO raided in criminal probe – 24 June 2021
The Australian Federal Police raided the offices of Macquarie-backed tech group Nuix as well as an apartment, following the launch of a criminal investigation by ASIC. The subjects of the probe are the recently departed Nuix chief financial officer Stephen Doyle, 50, and his Swiss-based brother Ross.
(Access to SMH digital version required to read article.)
NT ICAC makes improper conduct findings over Darwin Turf Club grandstand grant – 25 June 2021
The Northern Territory’s anti-corruption watchdog has made findings of “improper conduct” against the Chief Minister’s former chief of staff, three members of the Darwin Turf Club and a company director over a $12 million government grant for a new grandstand.
What The Heck Is A Crypto Tumbler And Is It Even Legal? – 28 June 2021
A cryptocurrency tumbler – also known as a crypto mixer or crypto mixing service – is a paid service in which you can mix potentially traceable coins (for example, stolen coins) with other, clean coins in an effort to make it harder to trace them. There are no specific laws that prohibit cryptocurrency tumbling. However, using a cryptocurrency tumbler to conceal other illegal activity could still land you in hot water.
https://www.gizmodo.com.au/2021/06/cryptocurrency-tumblers-mixers-explained/
Trump family business may face charges – 28 June 2021
Legal attorneys are investigating “possibly extensive and protracted criminal conduct” at the Trump Organisation, including tax and insurance fraud, falsification of business records and corporate perks and gifts.
https://thewest.com.au/news/crime/trump-family-business-may-face-charges-c-3245432
Crypto scam losses rocket to record high – 28 June 2021
Investment scams of all types are on the rise. Money lost to scams involving bitcoin since the start of this year already equal the entire losses of 2020. The Australian Competition and Consumers Commission (ACCC) had $176 million in losses reported to it during 2020. In 2019, losses amounted to $143 million, up from $107 million in 2018.
https://www.smh.com.au/money/investing/crypto-scam-losses-rocket-to-record-high-20210625-p584du.html
(Access financial version of SMH required to read article.)
Since 2012, Australia has become “significantly” more corrupt – 29 June 2021
Transparency International Australia chief executive Serena Lillywhite shares a range of issues, which she believes are impairing Australia’s reputation as a democracy, which actively targets corruption. We are one of the 21 nations where perceived corruption has worsened “significantly”, over the past eight years.
Melissa Caddick convinced 72 investors to hand over $23m to ‘sham’ business, court told – 29 June 2021
In Federal court, it has been revealed that Melissa Caddick faked many documents in the “quite elaborate fraud”, she used to swindle trusting investors out of more than $23m. She operated 37 bank accounts, sent investors fictitious portfolio evaluations and kept “meticulous” records. Provisional liquidators have been appointed.
Former WA director charged with multiple offences – 1 July 2021
Joanne Jennifer Pellew from Western Australia, has been charged with breaching her directors’ duties, making a false or misleading statement to ASIC and managing a corporation while disqualified.
https://www.miragenews.com/former-wa-director-charged-with-multiple-588666/
Westpac detects huge potential fraud, bank to pay compo for deficient financial advice to share traders – 2 July 2021
Westpac has uncovered “sophisticated and externally perpetrated” potential fraud, estimated at about $200m and has kicked off court action in response. The proceedings are against ‘Forum Finance’ over a portfolio of equipment leases. ASIC announced Westpac would pay $87m in compensation to former clients of its financial advisers.
Investigation & Fraud News – Week ending 25 June 2021
13 stories this week:
5 best VPN in Australia – 18 June 2021
A good article explaining Virtual Private Networks and how your network can be completely accessible to tracking and surveillance by your Internet Provider, as it is provided by them, and they ultimately host it. Article lists popular VPNS that are secure and can’t access your data.
https://bestinau.com.au/best-vpn-australia/
Bank took 8 years to report $1.4m fraud – 18 June 2021
George Vrettakos is only now facing justice after defrauding more than $1.4 million from CBA. The significant delay – caused by the Commonwealth Bank failure to report his fraud to police – may mean George Vrettakos escapes jail time.
https://www.riverineherald.com.au/national/2021/06/18/4463407/bank-took-8-years-to-report-14m-fraud
Ex-con and bankrupt advised Melissa Caddick on tax affairs – 19 June 2021
Missing fraudster Melissa Caddick, who misappropriated millions of dollars from her clients, used the services of a former bankrupt accountant (Cyril “John” Pearson) who had been banned for 10 years from managing a corporation as well as jailed for embezzling money from a superannuation fund.
(Access to digital version of SMH required to read article.)
Billionaire tax dodging exposed (just not in Australia, home of the opaque ultra rich) – 18 June 2021
For years there has been a push for greater transparency on the tax affairs of the rich who can use sophisticated tactics to minimise what they pay. This ‘push’ could potentially inadvertently reveal details of the tax affairs of an individual or entity, which would breach confidentiality laws
https://www.crikey.com.au/2021/06/18/billionaire-tax-dodging-australia/
Qld govt consults on media shield laws – 18 June 2021
Currently Queensland and Tasmania are the only states without specific media shield laws. In August, new QLD laws will mean Journalists will be protected from revealing confidential whistleblower sources. Attorney-General Shannon Fentiman has released a discussion paper on these laws.
https://thewest.com.au/business/media/qld-govt-consults-on-media-shield-laws-c-3148013
Former Australian spy Witness K spared jail time over conspiracy charges relating to alleged spying on East Timor – 19 June 2021
The former Australian spy dubbed Witness K, has been given a three-month suspended sentence, for conspiring to reveal classified information about an alleged spying operation, during oil and gas treaty negotiations, between Australia and East Timor.
https://www.abc.net.au/news/2021-06-18/act-witness-k-sentencing-hearing/100226438
We have filed a case under your name’: Beware of tax scams – they’ll be everywhere this EOFY – 19 June 2021
According to an Australian Competition and Consumer Commission report, scams targeting Australians last year cost an estimated $851 million. Posing as the Australian Taxation Office in particular has been a key vehicle for scammers to target victims, with considerable success over the years.
Scammers sending out knock-off crypto wallets that could steal your coin – 19 June 2021
Scammers have begun sending out fake hardware wallets to Ledger customers in an attempt to steal the cryptocurrency from their Bitcoin wallets.
‘Deeply disturbing’ allegations threaten to bring Toshiba to its knees – 21 June 2021
For the last six years, scandals and economic missteps have plagued Toshiba. Recently an ‘Explosive’ report critical of Toshiba’s management claimed they “devised a plan to effectively prevent shareholders from exercising their … voting rights at the AGM” and they had persuaded Japan’s trade ministry to help keep the activists at bay by exerting “undue influence on some shareholders”.
Scammers target would-be tenants as housing crisis continues – 21 June 2021
Scammers are offering fake properties to convince people to hand over money or personal information. Australians lost more than $300,000 to rental and accommodation scams in the nine months to September last year – an increase of 76 per cent compared to the same time the previous year.
https://the-riotact.com/scammers-target-would-be-tenants-as-housing-crisis-continues/470622
Former Sony Music employees consider class action lawsuit – 23 June 2021
A dozen former employees of Sony Music Australia, have approached a law firm, to investigate launching a class action lawsuit against the global music empire, following an investigation into workplace culture at the company’s Australian offices.
AFP raids Nuix office amid criminal investigation by market regulator – 24 June 2021
The Australian Federal Police raided the offices of Macquarie-backed tech group Nuix as well as an apartment in Pyrmont on Thursday following the launch of a criminal investigation by the corporate regulator.
(Access to digital version of SMH required to read article.)
ClubsNSW demands pokies whistleblower stop crowdfunding for court case – 24 June 2021
Troy Stolz turned to GoFundMe to raise money for a court battle with former employer ClubsNSW, but lawyers have demanded he take down his page and return donations or face further court action.
