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Investigation & Fraud News – Week ending 14 May 2021
13 stories this week:
Young Aussies are turning to crypto investment to create wealth, but there’s a dark side – 6 May 2021
It seems that more and more people own or plan to buy cryptocurrency by the end of the year. Barney Tan, an Associate Professor of Business Information Systems at the University of Sydney Business School, said the interest in digital currencies is being driven by online hype, rising prices and FOMO. Barney also warns just like with any investment, if it sounds too good to be true, it probably is. Last year there were more than 3,000 cryptocurrency scam reports made to the Australian Competition & Consumer Commission worth almost $30 million in losses. https://www.abc.net.au/triplej/programs/hack/young-aussies-crypto-scams/13332674
https://www.afr.com/rear-window/let-s-call-doggy-coin-what-it-is-20210505-p57p4p
(access to AFR required to read article)
AMA sues ex-CEO in $2.4M lawsuit – 7 May 2021
AMA, known as the biggest ‘smash repair’ business in Australia, is suing its former CEO Andy Hopkins over alleged anomalies in his spending. The defendant has been accused of claiming bonuses and incurring expenses inappropriately. The company said the Federal Court aims to secure $2.4m from Hopkins covering unauthorised expenses and a loan.
https://www.hcamag.com/au/specialisation/employee-engagement/ama-sues-ex-ceo-in-2.4m-lawsuit/254376
Top law firm’s invoices exposed to ANZ which employees were cooperating with ASIC investigation – 7 May 2021
During a 2014 investigation into alleged market manipulation, a group of employees at ANZ believed they were secretly giving information to the corporate regulator. What they did not know is that their lawyers, were revealing how much time and contact they had with ASIC, to their employer in invoices. This exposed the methodology behind the anonymisation technique and unmasked those employees who were meeting frequently with ASIC investigators.
https://www.abc.net.au/news/2021-05-07/lawyers-exposed-anz-asic-infomants/100121298
Australians targeted by fake myGov email phishing scam – 7 May 2021
Australians are being warned of a new email scam in which hackers pose as myGov employees and then proceed to steal the bank details of unsuspecting victims.
Melbourne man allegedly posing as Uber driver scams $75,000 from unsuspecting passengers – 7 May 2021
Muhammad Umer has been accused of posing as an Uber driver who allegedly preyed on intoxicated revellers and lured them into his car to swipe their credit cards. He has been accused of taking more than $75,000 from 14 alleged victims.
Fraudulent debt collector jailed for almost 5 years – 7 May 2021
The court heard that Robert Cree ran number of debt recovery companies. Investigators found that the business was cold calling organisations, offering debt recovery services following payment of a subscription fee. In most cases, debts were never recovered and no service was provided. In the company’s liquidation, he also impersonated the company’s director to deceive the Official Receiver.
https://www.miragenews.com/fraudulent-debt-collector-jailed-for-almost-5-556383/
Does your business really need to keep that data? – 8 May 2021
Industry Professor Phillip Magness at Deakin’s Centre for Cyber Security Research and Innovation, argues businesses should carefully consider how much personal information they keep, given the risks of a data breach. Furthermore, the Australian Privacy Principles require an entity that is bound by the Privacy Act, to take reasonable steps to destroy or de-identify personal information, when it is no longer needed for any purpose, for which it was collected.
https://www.miragenews.com/does-your-business-really-need-to-keep-that-data-556635/
Rio’s Mozambique ‘whistleblower’ complained of ‘obfuscation’ – 10 May 2021
The former Rio Tinto executive (Preston Chiaro) portrayed as blowing the whistle on the miner’s Mozambique coal scandal, felt he encountered ” obfuscation’ ‘ when he raised evidence in 2012 that the mines valuation was worth much less than its official carrying value.
Access to Digital version of AFR required
Smash-repairer expense claims entangle more AMA executives – 10 May 2021
AMA has alleged that several executives were tied up in illicit payments at Australia’s biggest smash repairer, including dummying up invoices to cover their tracks. The claims are contested by executives tied up in the matter, who maintain they were entitled to payments and the monies were all approved.
Access to Digital version of AFR required
Qld gourmet foodie admits tax scam – 10 May 2021
A gourmet gluten-free foodie was part of a sophisticated multimillion-dollar tax scam to pay for a friend’s luxury mansion has escaped jail. The two acted to defraud the commonwealth of over 3.6 million dollars, by setting up a fake cancer research and development tax offset claim.
https://www.youngwitness.com.au/story/7245785/qld-gourmet-foodie-admits-tax-scam/
Sinister COVID trend sees online love scams target younger victims – 11 May 2021
Australians lost more than $37 million to romance scams in the past year. A younger demographic is now the target of online thieves, as the popularity of dating apps grows with cryptocurrency and investment fraud being the new weapons of choice.
https://www.abc.net.au/news/2021-05-11/covid-love-scams-target-younger-victims/100064644
Internal emails reveal WHO knew of sex abuse claims in Congo – 13 May 2021
WHO has been facing widespread public allegations of systemic abuse of women by unnamed staffers in Congo during the Ebola outbreak. Emails, recordings of internal meetings, legal documents and interviews with dozens of aid workers and WHO staffers show WHO declined to comment on any specific sex abuse allegations or how they were managed and said it had taken steps to address the problem.
https://www.smh.com.au/world/africa/internal-emails-reveal-who-knew-of-sex-abuse-claims-in-congo-
Crown and Star to phase out cash at all casinos to counter money-laundering fears – 14 May 2021
Australia’s biggest casino operators, Crown Resorts and The Star, have agreed to phase out cash from all of their casinos in an effort to prevent criminals from laundering money through their gaming tables.
Investigation & Fraud News – Week ending 7 May 2021
15 stories this week:
Anatomy of a hedge fund hack – 28 April 2021
The complexity of scams, and the time and money fraudsters are prepared to invest, highlights a growing threat to smaller financial services firms. Hedge funds and family offices do not spend anywhere near enough on cyber security, which is why they are targets.
https://www.afr.com/companies/financial-services/anatomy-of-a-hedge-fund-hack-20210428-p57n0s
(Access to AFR required to read this article.)
Criminality of Australia’s banking sector going unchecked – 30 April 2021
Dr Evan Jones, a retired political economist shares his opinion on how the financial sector is a natural haven for criminality and that most systematic white-collar crime of Australian banks against borrowers is still ignored by those in authority and by the media.
Whistleblowers are being scared into silence, hampering efforts to expose corruption in Australia, research finds – 30 April 2021
Major flaws with Australia’s whistleblowing protections are scaring whistleblowers into silence and hindering journalists’ efforts to expose corruption, according to jailed journalist Peter Greste and constitutional law scholar Rebecca Ananian-Welsh.
Shifting the focus on CCTV and women’s safety – 30 April 2021
Closed-circuit television cameras on trains and city streets are meant to reassure women that there not in danger – but women don’t always see them that way. Women and girls prefer the presence of security officers and guards to cameras. Until this changes, women will feel vulnerable when moving through public spaces, particularly at night.
Deepfake nudes change the face of cyber threats, revenge porn and scams – 30 April 2021
The rise of deepfake nude technology poses radical new threats to anyone who posts images and videos of themselves on the world’s most popular social media sites. As these tools became more accessible and improved, scammers would inevitably seize on the opportunity to extort bitcoin or money from a victim, by creating a deepfake nude of a victim and threatening to share it online.
Commission welcomes sentencing of children’s cancer charity founder for fraud and theft – 1 May 2021
Mr Nesbitt, the founder and director of a former children’s cancer charity, Little Heroes Cancer Trust, was sentenced to 20 months’ imprisonment after he was found guilty in March 2021. He stole £87,000 from the charity and transferred £181,000 into a bank account in his name between July 2014 and May 2015.
https://www.miragenews.com/commission-welcomes-sentencing-of-childrens-552715/
‘Heartbreaking’: Elderly couple loses $50k in 24 hour scams – 1 May 2021
The Australian Federal Police issued a search warrant in Wollongong, as part of a cybercrime investigation into an alleged fraudulent technical support business. Police allege the business – with a professional website, an Australian 1800 business number and used Microsoft logos – linked Australian victims to offshore scammers, who would request remote access to their computers.
https://www.qt.com.au/news/heartbreaking-elderly-couple-loses-50k-in-24-hour-/4249634/
In Indonesia, lab workers arrested, accused of reusing swabs in coronavirus tests – 2 May 2021
Five laboratory workers were arrested in the Indonesian city of Medan and accused of reusing nasal swabs in administering as many as 20,000 tests. They face up to six years in prison for violating consumer protection, medical waste and contagious disease laws.
Whistleblower Richard Boyle’s prosecution continues after he exposed the ATO’s unethical debt collection practices against small businesses – 3 May 2021
Boyle is facing life in prison for his role in exposing unethical debt collection practices inside the ATO. Boyle is relying on the public interest disclosure regime in his response to the alleged offences. 42 of the 66 charges have been dropped to date.
Criminals have already stolen over $100 million from blockchain projects in 2021 – 3 May 2021
Cryptocurrency wallets and exchange accounts have brought criminals around $108.3 million in the first quarter of 2021 – that’s 46% more than in Q1 2020. There were also nine blockchain wallet breaches reported, as well as one scam event and two blackmail cases, which saw victims lose roughly $19.3 million. Due to their nature, blockchain projects remain profitable targets to cybercriminals because fraudulent transactions cannot be reversed, as they may be in the traditional financial system.
New research reveals customer behaviour around fraud risks – 3 May 2021
The majority of efforts organisations make to educate customers about potential fraud risks are not working, according to new research from Callsign, the Fraud Protection and Authorisation company. The research suggests consumers want to make their own decisions around the risks they take, choosing to opt in or out of receiving fraud alerts, even ignoring them when they are delivered.
https://securitybrief.com.au/story/new-research-reveals-customer-behaviour-around-fraud-risks
Coaches must be held accountable: gymnastics whistleblowers speak out – 4 May 2021
A former gymnast hopes individual coaches are held accountable for their role in the abuse that has been rife in Australian gymnastics for decades, detailed in a troubling Australian Human Rights Commission report that was released on 3 May.
Australian Military Bank hit with a direct order – 4 May 2021
The financial intelligence regulator issued the Australian Military Bank, with an enforcement action designed to ensure the bank is compliant with anti-money laundering laws and stop it from being compromised by criminals.
https://www.afr.com/companies/financial-services/austrac-slugs-australian-military-bank-with-a-direct-order-20210503-p57ojx
(Access to AFR required to read this article.)
Corporate whistleblower policies falling short: ASIC – 4 May 2021
The corporate watchdog is urging companies to update their whistleblower protection policies, after finding many firms had not kept up with laws aimed at supporting staff who raise the alarm.
Scammers prey on Victorians amid scramble for rental properties – 5 May 2021
Victorians desperate to secure rental properties are being preyed upon by scammers posing as landlords on Facebook. Consumer Affairs Victoria recorded 31 reports of rental scams last financial year and said some scammers were showing renters properties they had no right to rent out. In other instances, people are asked to hand over rent and bonds for properties they have never inspected.
Investigation & Fraud News – Week ending 30 April 2021
12 stories this week:
Bank protections against cryptocurrency scams in Australia ‘ a very shaky area’ – 22 April 2021
Australians are losing tens of millions of dollars a year in crypto currency scams. A Sydney woman Sylvia Chau, who lost $2.6 million after investing via an unlicensed unregulated cryptocurrency broker in 2019, took her case to the Australian Financial Complaints Authority which found that, while the bank did make some procedural errors, ultimately the disputed transactions were authorised so the bank was not liable.
https://www.abc.net.au/news/2021-04-22/cryptocurrency-scams-in-australia-warning-banks-/100087800
90-year-old woman loses $41 million to alleged phone scam con – 23 April 2021
A wealthy 90-year-old woman was conned out of $A41 million in the region’s biggest recorded phone scam. Criminals posed as Chinese authorities and told her that her identity was used in a serious criminal case in mainland China. She was then instructed to transfer her money to designated bank accounts to investigate whether the cash was the proceeds of crime.
Trader flees Turkey with $2b in crypto scam – 23 April 2021
One of Turkey’s largest cryptocurrency exchanges said it lacked the financial strength to continue operations, leaving hundreds of thousands of investors fearing their savings have evaporated as authorities sought to locate the company’s 27-year-old founder, who fled the country.
https://www.afr.com/markets/currencies/trader-flees-turkey-with-2b-in-crypto-scam-20210423-p57lx5
(Access to digital AFR required to read article.)
ASIC sees “significant number” of cryptocurrency scam concerns – 23 April 2021
ASIC is seeing an increasing number of complaints related to cryptocurrency scams, forcing it to deepen its understanding of blockchain technology. Industry support will also play a key part in how consumers are educated on potential scams that reach beyond ASIC. https://www.itnews.com.au/news/asic-sees-significant-number-of-cryptocurrency-scam-concerns-563711
https://au.finance.yahoo.com/news/cryptocurrency-bitcoin-scams-201004468.html
Founder of Turkish cryptocurrency exchange Thodex flees with reported $US2 billion in investor assets – 24 April 2021
Turkish prosecutors have opened an investigation after the Istanbul-based founder of a cryptocurrency exchange shut down his site and fled the country with a reported $US2 billion ($2.6 billion) in investors’ assets.
IOOF promises ‘remedial action’ after ASIC investigation of Bridges, RI Advice – 26 April 2021
IOOF has committed to taking remedial action against its Bridges Financial Services and RI Advice licensees, after an investigation by the corporate regulator revealed “deficiencies” with the groups’ supervision processes and the quality of advice provided.
Mystery over 43 corruption allegations made by Sydney Water employees – 26 April 2021
Sydney Water has recently experienced 45 complaints and dozens of allegations of serious wrongdoing or corrupt conduct made by its employees. There are also a large increase in numbers of whistleblower complaints by employees of NSW Health and Fire and Rescue NSW.
62-year-old man charged over $845,000 ATO investigation – 28 April 2021
‘Phoenixing’ refers to the deliberate act of building up debts in a business and stealing profits, before winding up the company and starting up a new one under a different name. An investigation led by the Australian Taxation Office has resulted in a 62-year-old man being charged over illegal ‘phoenix’ activity that saw the Commonwealth lose $845,066.
https://au.finance.yahoo.com/news/ato-investigation-015923453.html
Anatomy of a hedge fund hack – 28 April 2021
The complexity of scams, and the time and money fraudsters are prepared to invest, highlight a growing threat to smaller financial services firms.
https://www.afr.com/companies/financial-services/anatomy-of-a-hedge-fund-hack-20210428-p57n0s
(Access to digital version of AFR required.)
NAB controls ‘not adequate’ to prevent multimillion-dollar fraud – 29 April 2021
The bank detailed to a parliamentary committee how a top staff member (Rosemary Rogers) was able to get away with a multimillion-dollar fraud, conceding that its ordinary compliance controls did not at the time extend to the office of the chief executive.
NAB said following the detection of Ms Rogers’ fraud, it had undertaken an internal audit of third-party vendor selection and contract management in the CEO’s office and tightened due diligence on its supplier management processes.
Illegal football streaming sites are absolutely riddled with dangerous malware – 29 April 2021
According to a report from cybersecurity firm Webroot, almost all (92%) illegal football streaming websites contain some form of malicious content, from malware and phishing lures to social engineering scams
Prosecutors refuse to drop case against tax office whistleblower Richard Boyle – 29 April 2021
Director of public prosecutions was considering ending pursuit of ex-ATO employee who went public with concerns about debt recovery tactics. Prosecutors on Thursday indicated, however, that they would be proceeding with their case, which could bring a lengthy jail stint for Boyle.
Investigation & Fraud News – Week ending 23 April 2021
19 stories this week:
SA CCTV trial is underway – 9 April 2021
The trial of a video and audio surveillance system in South Australian state-run aged care facilities has officially started almost two years after it was expected to kick off. Leading Age Services Australia CEO Sean Rooney welcomed the trial and said the technology had potential to improve resident wellbeing.
https://www.australianageingagenda.com.au/technology/sa-cctv-trial-is-underway/
The new world of ‘deep fake’: How cyber attackers impersonated senior ministers, diplomats – 1 April 2021
Numerous Australian politicians and diplomats including Finance Minister Simon Birmingham, received messages on encrypted messaging service “Telegram”. Some clicked on the link to download the Telegram app. Once they did this, they were verifying the account for the cyber attacker – uploading their contact book and giving the hacker the ability to impersonate them.
Nine deputy chair Nick Falloon cleared of legal breach, golf membership revoked – 11 April 2021
An investigation by Nine Entertainment Co’s top lawyer has found that deputy chairman Nick Falloon’s use of a corporate golf club membership was inappropriate but did not breach his duties as a director.
Scammers target desperate renters on Sunshine Coast as housing crisis continues – 12 April 2021
Scammers are taking advantage of the desperate rental situation on the Sunshine Coast, where the vacancy rate has dipped as low as 0.5 per cent in some areas. Since the start of the year the Australian Competition and Consumer Commission (ACCC) has received 32 reports of rental or accommodation scams from Queenslanders, totalling $8,000 in losses.
Network Ten in sweeping company-wide review of staff culture, conduct – 12 April 2021
All employees on television programs and in the corporate divisions of Ten are being interviewed by the network’s human resources division as part of a review. The sources said people were being asked about sexual discrimination, racism and any issues of harassment or assault.
WA Crown royal commission: No more blissful ignorance of corporate ‘Frankensteins’ – 12 April 2021
The Perth Casino Royal Commission will inquire and report on the ‘suitability’ of Crown Resorts and its local subsidiaries to continue to hold a license for Crown Perth. Whilst Crown has shed many of its directors, and the corporation ‘pledges’ they have changed their ways, article asks “what makes a ‘suitable person” and how do we know when a corporation has reformed?”
Cryptocurrency crime a ‘future problem’ for intelligence agency struggling with talent drain: ACIC – 13 April 2021
The head of one of Australia’s criminal intelligence agencies has warned cryptocurrency would make investigating transnational crime groups tougher into the future, following the government’s struggles to retain specialised talent from leaving for more lucrative private sector positions.
https://www.canberratimes.com.au/story/7205805/crypto-the-future-of-organised-crime-acic-says/
ClubsNSW set to drop legal bid to access communications between whistleblower and regulator – 13 April 2021
Former manager Troy Stolz, who raised alarm money laundering in pubs and clubs across New South Wales, said lobby group’s court action would scare other whistleblowers and prevent them from coming forward.
Emergency dispatcher arrested after refusing to return $1.6m in mistakenly transferred money – 13 April 2021
A US emergency dispatcher has been arrested after refusing to return more than a million dollars mistakenly transferred into her account.
ASIC winds up companies behind SMSF scam – 13 April 2021
The corporate regulator has taken action to wind up the companies behind an SMSF scam that obtained millions in investor funds. SA Services and Orphans Asia allegedly obtained approximately $2.4 million in Australian investor funds through cold-calling Australian consumers and operating the now-defunct website smsfadvisory.com. Neither SA Services nor Orphans Asia is licensed or authorised to deal in financial products or provide financial services.
https://www.accountantsdaily.com.au/business/15564-asic-winds-up-companies-behind-smsf-scam
Tesla urged to review its payment practices after two Australian buyers lose thousands to scammers – 15 April 2021
Two Tesla customers collectively lost more than $130,000 after receiving fraudulent Tesla invoices. Customers are calling for Tesla to offer more secure payment options and for banks to improve checks on transactions.
Culture the key to tackling sexual harassment in the workplace – 16 April 2021
Unfortunately sexual harassment complaints are made only after harassment has continued for some time. When that happens, an investigation ends up with no winners and the damage to the organisation is difficult to repair. Addressing why it happened, how it continued to happen and why nothing was said are the key issues to history not repeating itself. Paper tells how it might sound simple, but is the key to success.
Greek Orthodox Church took tens of millions in rent from aged care home at centre of deadliest COVID outbreak – 16 April 2021
An ABC investigation has found a group of taxpayer-funded aged care homes funnelled $31 million back into the coffers of one of Australia’s largest churches. In the past eight years, St Basil’s paid more than $22 April 2021 million in rent and fees to the Greek Orthodox Archdiocese while receiving federal government funding.
https://www.abc.net.au/news/2021-04-16/st-basils-greek-church-taxpayer-funding/100068128
Wunderkind’s alleged $970 million fraud jolts Singapore – 16 April 2021
The police have called it one of the city-state’s largest-ever suspected investment fraud schemes. Ng Yu Zhi was charged last month with four counts of fraud for allegedly raising at least S$1 billion ($970 million) from investors for commodity trades that didn’t exist.
Banks hit with $78m in royal commission penalties: ASIC – 16 April 2021
The corporate watchdog says its investigations following the banking royal commission have so far resulted in $77.65 million in penalties.
https://thenewdaily.com.au/finance/finance-news/banking/2021/04/16/bank-royal-commission-penalties/
Magic Millions, money laundering and a $4b crypto scam – 16 April 2021
The FBI is investigating the biggest investor in Australian horseracing (Amer Abdulaziz Salman) over a scam that could have cost Australians $770 million.
AFP undertook Leppington Triangle raids – 19 April 2021
Australian Federal Police conducted a dawn raid on the Canberra home of a senior public servant as part of an investigation into possible corruption, over the $30 million purchase of a block of land at the new Western Sydney Airport, later valued at just $3 million, known as the Leppington Triangle.
https://www.afr.com/politics/federal/afp-undertook-leppington-triangle-raids-2021418-p57k9u
Police probe bond scam as HSBC, Vanguard, PIMCO are hijacked – 20 April 2021
NSW police are investigating a fraud scheme that dupes investors with fake high-yield bond prospectuses, after young investors have had their hard-earned savings wiped out.
Access to digital version of AFR required to read article – 22 April 2021
NDIS fraud nets millions in Sydney scam Six people are accused of being part of a sophisticated Sydney crime syndicate that’s defrauded millions of dollars from the National Disability Insurance Scheme. With the help of specialist financial intelligence provided by AUSTRAC, police identified a syndicate using three companies to defraud the NDIS. Once the payments from the NDIS claims were received by the syndicate, a kickback went back into the pockets of the company operators.
https://www.perthnow.com.au/news/crime/sydney-syndicate-arrested-over-ndis-fraud-c-2655929
