Archive for April, 2012

Financial fraud was highest in 2011

Thursday, April 12th, 2012

According to suspicious activity reports (SARs) submitted to the Financial Crimes Enforcement Network (FinCEN), 2011 was a year all-time high in alleged claims of money laundering, debit card fraud, mortgage loan fraud, consumer loan fraud, and casino fraud.

Since 2007, the SAR numbers have ranged from 1.2 million to 1.3 million. In 2011, their number increased to more than 1.5 million. According to analysts, these fraud cases can be directly related to the financial meltdown.

Curt Novy, a mortgage and real estate analyst in San Diego, Calif, said that the financial meltdown lasting from 2007 to 2009 “uncovered all the skeletons” that were present in the marketplace, from mortgage financing to Ponzi schemes. He also noted that these frauds are overlooked in a good economy, but, during an economic downturn, people take a closer look at the books. “Massive fraud isn’t discovered in good times,” he explained. “It’s when the market changes, and financial institutions start looking closer, when the checks stop coming in, they take a closer look at what’s going on.”

Many of the fraud cases are large and complex, therefore investigators suspect it may take the next decade for reviewing them. Some cases involve hundreds of properties, which can take 3-4 years to compile evidence in preparation for a trial.

While fraud peaked in 2011, the FBI is only pursuing 3% of the total 90 000 suspected mortgage loan fraud cases. The FBI is choosing to investigate the large-figured cases.

FBI financial crimes chief Tim Gallagher told ABC News said: “About 70% of our cases are more than a million dollars. We are going after big fish as far as putting cases together, and we’re going after people on the inside because of fiduciary responsibility and the element of trust that they’re violating and doing the most damage”.

US calls Argentina a major money laundering country

Sunday, April 1st, 2012

According to the annual International Narcotics Control Strategy made by a State Department, Argentina, Curacao and St Maarten have been designated as “major money laundering countries”.

These jurisdictions were moved up on a money laundering watchlist. The report said the three have become “major money laundering countries,” or those “whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking.”

The report moved Argentina and the two Caribbean island countries to the list of “jurisdictions of primary concern” from the less acute “jurisdictions of concern” category. So, Argentina, Curacao and St Maarten join a wide-ranging list of 66 countries that includes Australia, Brazil, China, Japan, Russia, the United Kingdom, etc.