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MONEY LAUNDERING NEWS

09/05/08 BRITISH VIRGIN ISLANDS

Our regular readers will recall that recently we reported on the British Virgin Islands’ implementation of a new code of practise years after FATF reported on their requiring amendment.

Merely a month after the implementation of the new code of practise the British Virgin Islands Financial Services Commission has patted itself on the back announcing that their new code will protect the British Virgin Islands’ integrity and reputation.

They may be a little premature in making their announcements so early after the implementation of the code. Only time will tell.

09/05/08 FEWER MONEY LAUNDERING INVESTIGATIONS IN SWITZERLAND

In the financial year 2006 the Swiss authorities commenced 507 investigations into money laundering. In the financial year 2007 the number was 317.

Does this reflect fewer money laundering cases or does it reflect the fact that money launderers do not consider Switzerland to be as safe a haven as previously?

08/05/08 FIDELITY UNDER EXAMINATION

Fidelity is one of the largest providers of investment services offering unit trusts and bonds of all types. Investors should be aware that an investigation into their anti-money laundering practices has been commenced by a US federal grand jury and the Securities and Capital Exchange Commission.

All that has been reported so far is that investigation has started.

07/05/08 YET ANOTHER LOOPHOLE

One of the quickest methods of money transfer arises in mobile telephone banking by payment networks across the world. This apparently is giving rise to new opportunities for both money laundering and terrorist financing. A warning has been issued by the US Department of State. There are now around 3 billion mobile phones in the world while there are less than 1 billion bank accounts and payments via mobile phone transfers are expanding especially in Africa, Asia and South America.

06/05/08 WHAT IS STRUCTURING

In the US, pursuant to their Bank Secrecy Act and the USA Patriot Act Regulations, banks are only required to report transactions of sums greater than $10,000. Accordingly individuals can either “structure” or divide payments into a set of transactions each under $10,000. Those transactions therefore are not be reported.

This clearly foreseeable loophole is unsurprisingly being abused. Realistically, except in the most obvious of cases bank staff cannot be expected to spot structured transactions in this type amongst the many millions of transactions that go through the banking system daily. Accordingly computerised systems are now being put into place to spot and recognise structured transactions.

02/05/08 AMAZING THEY HAVE JUST WOKEN UP

An apparent blind spot in US/Mexican relations has been revealed. It concerns the electronic transfer of money from the US into Mexico.

The presumption has been that money sent has been from migrant workers back to their families. However it is quite clear that the position has been abused and Mexican authorities have now announced that they will focus more on combating money laundering. Both US and Mexican prosecutors have agreed that Mexican authorities will monitor money transfers more carefully.

Why should responsibility fall on the Mexican side alone?

01/05/08 JAPAN JUST CATCHING UP

It is remarkable that one of the largest economies in the world lags behind in money laundering regulation. Believe it or not laws aimed at the prevention of diversion of criminal proceeds only went into full force in Japan on 1st March of this year. Prior to that date Anti-Money Laundering legislation only covered financial institutions but thereafter estate agents, precious metal dealers and jewellers as well as judicial scriveners, administrative scriveners, certified public accountants and licensed tax accountants fall within the regime.

Once again it is the FATF (Financial Action Task Force on Money laundering) that prompted the change although their report was made as long ago as 2003 and it has taken nearly five years for them to catch up.

30/04/08 COMPLAINTS PRACTICE NOTE

The Law Society has issued a new practice note detailing good practice in complaints management. Follow the link to the practice note
 

29/04/08 MORTGAGE FRAUD PRACTICE NOTE

The Law Society has issued a new practice note on mortgage fraud.

Click the link below to:

Read the practice note

28/04/08 MORE ON IRAN

For those of you who have read our recent reports concerning Iran’s anti-money laundering system will not be surprised to now read that Paris based FATF (Financial Action Task Force) has warned its 34 member states to advise their banks of the risk of doing any business with Iranian banks.

The affect of such warning could be to cripple Iran’s banking sector. Whether they like it or not they will be forced to tighten their systems. The question that follows is even with tight systems on their statute books, will those systems be enforced?

25/04/08 BRITISH VIRGIN ISLANDS STREGTHEN THEIR CODES

We recently reported criticism of the British Virgin Islands. Reports going back years have made recommendations concerning their anti-money laundering system which had not been implemented. Shortly following that report, on 20th February last, the British Virgin Islands financial services commission issued the Anti-Money Laundering and Terrorist Financing Code of Practice 2008. Clearly in this instance, criticism of a system is proving to be effective.

24/04/08 ARE WE BEING CINICAL?

We recently reported on a speech by Iran’s president in which he confirmed the tightening of Iran’s anti-money laundering procedures.

We may be somewhat cynical but we have now noted that shortly before that speech was made, Reuters reported that an international money laundering body had alerted its members to deficiencies in Iran’s system of combating money laundering and notably, terrorism financing.

23/04/08 JAPAN JUST CATCHING UP

It is remarkable that one of the largest economies in the world lags behind in money laundering regulation. Believe it or not laws aimed at the prevention of diversion of criminal proceeds only went into full force in Japan on 1st March of this year. Prior to that date Anti-Money Laundering legislation only covered financial institutions but thereafter estate agents, precious metal dealers and jewellers as well as judicial scriveners, administrative scriveners, certified public accountants and licensed tax accountants fall within the regime.

Once again it is the FATF (Financial Action Task Force on Money laundering) that prompted the change although their report was made as long ago as 2003 and it has taken nearly five years for them to catch up.

23/04/08 MORE MONEY LAUNDERING PROSECUTIONS

Worldwide there has been an increase in prosecutions for money laundering. Japan has recently released its figures. In 2006 there were only 144 prosecutions but in 2007 there were 184. This however should be contrasted to the number of such prosecutions in the UK. Japan has a bigger economy than the UK and one wonders whether they have a di minimis rule?

22/04/08 $1.5 TRILLION

At the recent second GCC Regulator’s meeting held in Bahrain a senior banker said that it is estimated that money laundering worldwide is as much as $1.5 trillion and poses a serious challenge to financial institutions worldwide.

21/04/08 MONEY LAUNDERING THEY CAN’T STOP

There is a daily flight from Bogotá in Columbia to Miami airport. Associated press reports that in the plane’s cargo hold there usually are numerous bags of Euros which, associate press report, investigators consider are part of a huge 1.4 billion dollar cocaine money laundering scheme.

The report goes on to say that federal investigators have been aware of what goes on for years but they have been unable to build a strong enough case to prosecute, so they are changing tactics and making seizure after seizure.

The transfer of money is based upon exchange business in Columbia, the US and the UK together with financial firms in Miami and in London. The money goes round and round with Columbian drug cartels cloaking the true source of the money. Although the “circularisation” of this money has been known about for years apparently no one has been charged because of problems over burden of proof and the circle involves many stages.

18/04/08 CAN IT BE TRUE?

The largest denomination bearer instrument in circulation today has been issued by the ministry of finance of the Republic of Venezuela. It was issued on 19th March 2003 and it was signed by the then Minister of Finance. The bearer bond is for the amount of $102,770,208.22.

Apparently there are five such notes in circulation totalling a little over half a billion dollars in value.

The particular note in question was seized by Venezuelan law enforcement officials while they were searching the residence of one of Venezuela’s leading bankers and it is apparently enforceable legal tender.

Can you imagine asking for change?

17/04/08 SWISS ACCOUNTS SECRET?

Swiss bank accounts may not be as secret as people consider. They have recently assured Indian Authorities that they will give any information on any customers to check money laundering, terror financing and tax evasion.

The Chairman of the Swiss Bankers Association stated, “we do respond to the queries of Governments all over the world to provide information on various kinds of criminal finance. We have certain procedures which a government of a country needs to follow to receive any information on the customers of the Swiss banks.”

16/04/08 ARE YOU AN ASP?

Accountancy Service Providers (ASP’s) have been able to register with H M Revenue & Customs from the 1st April 2008, if they have not registered by 1st July they will not be able to trade legally until they are on the register.

15/04/08 ARE YOU A TCSP?

If you are a Trust or Company Service Provider are you aware of the money laundering regulations registration deadline.

All TCSP’s must have been registered by 1st April 2008 if they wish to carry on business. You have been warned.

14/04/08 CAYMAN ISLANDS COMPLAIN

The Cayman Islands require a higher level of client due diligence than places such as Bermuda, Dubai and Dublin. The Cayman Islands, a recognised tax haven, complained that their adoption of a full and proper “know your client” regime is placing them at a financial disadvantage with their competitors.

11/04/08 A CASE TOO FAR

There has been criticism of UK Anti-money laundering legislation almost from day one on the basis that there is no di minimis rule. Any crime involving money could automatically result in charges both in relation to the crime itself and of money laundering. While questions have been raised in the UK nothing has been done.

The Supreme Court in Washington has now suggested that US anti-money laundering legislation is being stretched too far. A prosecutor ran into aggressive questioning by Justices in a case where the concealment of cash in a car headed for Mexico met the standard for international money laundering charges with a maximum penalty of 20 years in prison.

Let us hope that common sense ultimately will prevail and questions which may start in the US eventually reach her with the introduction of a di minimis rule.

10/04/08 POWER TO RAID

The Information Commissioner has again called for an increase in the powers of the Information Commissioner’s office to investigate those who abuse data protection laws. He is calling for the ability to raid offices of those abusing date protection law and he is asking that his office should be given the power to prosecute data loss offenders.

The overwhelming likelihood is that the Government will refuse this power as it is Government itself within its own departments who are probably the worst offenders in breaking data protection law simply by losing so much data.

09/04/08 WHERE IS MY DATA

The amount of data held by different organisations upon each and every one of us is constantly increasing. It is now estimated that the average British person has their personal details on as many as 700 databases. There are of course Government databases but there are hundreds of others. How often have you given personal information when, for example, buying theatre tickets or shopping online. Many organisations pass this information to others, hence the proliferation of information about us all held on so many databases in so many places around the world.

08/04/08 PETITION FOR ONLINE FRAUD UNIT

The Government has launched a website containing a petition calling for the immediate set up of a national ecrime reporting unit.  The website for those who are interested is at http://petitions.pm.gov.uk/ecrime.

07/04/08 JUNK MAIL REPORTING SYSTEM

The Office of Fair Trading (OFT) has asked the public to collect scam mail (scam snail mail) and to put it into boxes, to be called Scamnesty Boxes in public areas. This is to allow local trading standard services of the OFT to investigate illegal spam mail.

Surely it would make sense for the OFT to do the same for email scams.

Individual recipients could simply forward scam emails to a specific address operated by the OFT which could be automatically sorted and the worst offenders then easily identified and tracked down. Those offender’s ISPs could be notified and the senders blocked. Of course scam email senders would immediately change names and addresses etc but an automated scheme could move against them very quickly.

Recently there was a case where hackers shut down one of the most popular porn sites in the world. They simply hacked into the site and closed it down. If amateur hackers can do this then surely Government agencies can do the same to illegal email scammers.

04/04/08 MORE DATA LOST

Hardly a day seems to pass without more news about Government’s mishandling of personal information and data. The latest that has come to our attention is that the NHS has lost thousands of National Health Service Smart Cards which are used to access electronic patient records. Apparently of the 429,691 Smart Cards issued 4,147 have been reported either lost or stolen.

I.D. Cards clearly are a good idea but the question must be asked whether these should be issued in the current climate of Government inefficiency?

03/04/08 UPDATE YOUR ADOBE

A warning has been issued alerting Adobe users to the fact that Adobe’s Acrobat Reader could open computers to becoming vulnerable to attack by an internet worm. It appears that the problem lies in the way that Acrobat handles .pdf files.

Adobe Reader is the most popular program for reading .pdf files and the vulnerability to a Trojan in its earlier versions clearly reveals a significant danger to all users. The latest version of Adobe can be downloaded for free from their website.

02/04/08 SECURE EMAIL

The Information Commissioner has recently commented on the security of emails. His comments in turn give raise to a consideration of whether firms, sending open emails which are of course particularly vulnerable to interception, may be negligent in not encrypting. The problem however that faces firms in dealing with encryption is that there is little point in encrypting unless recipients have the relevant decryption keys. Indeed one can easily imagine a client becoming frustrated and then angry at not being able to open an email because it has been encrypted by you.

Criticism and warning may be useful but there are some circumstances where there is a special need to be constructive and should suggest possible and feasible solutions.

01/04/08 VIRUS GOING NO WHERE

Researchers have found that there is a new virus that is spread by an SMS message. The user is sent a file called “beauty.jpg”, “love.rm” or “sex.mp3”.

When opened these files insert a worm into the users memory card and then not only sends itself to everyone who is a contact on the user’s phone but attempts to spread itself to any nearby device that uses Bluetooth. Strangely the researchers have found that while the worm is very effective at being spread in this way they cannot see that it does anything other than spread itself. Perhaps it is just a childish prank or, possibly more sinister, the system is being tested to see if it can be effective in forwarding serious malware.

It may be 1st April, but this is no joke - the virus is valid but appears to go nowhere.

31/03/08 AMENDED PRACTICE NOTE

The Law Society has announced that its  anti-money laundering practice note has been updated.

The amended note has advice on recent changes to tipping off offences which have substantially changed from POCA 2002. There is are new tipping off offences and new consent defences.

Follow this link to the amended practice note:

Read the practice note

28/03/08 NEW FSA RULES

THE FSA has published new rules. As from March 2009 firms undertaking transactions in the equity, bond and derivatives markets will be required to record all communications relating to client orders. They will also be required to record all electronic communications. This is intended to help deter and detect market abuse.

27/03/08 IRAN TO ENFORCE ANTI MONEY LAUNDERING

Iran has not only faced criticism from the west at it's reticence to implement modern anti-money laudering rules but it has also faced criticism from inside the Arab and Muslim World.

In an attempt to stem that criticism Iran's president has ordered the Economy Ministry to implement an anti-money laundering law. Only time will tell whether a country reputed to finance terrorism will do so.

26/03/08 PRACTICE NOTE

The Law Society Practice note on Money Laundering is available on their website at:

http://www.lawsociety.org.uk/productsandservices/practicenotes/aml.page

Simply follow the link

25/03/08 MICROSOFT SECURITY BULLETINS

Microsoft has recently released 11 security bulletins. Six of the bulletins are rated as "Critical" and the remaining five as being "Important".

Affected software includes Microsoft Windows, Office, Office Works, Publisher, WebDAV, Internet Explorer, Active Directory, Active Directory Application Mode (ADAM), and IIS. The worst of these vulnerabilities would allow for remote code execution which can assist frausters in accomplishing identity thefts.

The bulletins can be seen in full on Microsoft's own website and you should ensure that your 'techie' keeps up with these important issues of security.

24/03/08 EASTER MONDAY

We shall be back tomorrow

21/03/08 HAPPY EASTER

We are taking a break until next Tuesday. Enjoy your break.

20/03/08 ONLINE FRAUD PETITION

A new petition has been launched on the Government website.  The address HTTP://petitions.pm.gov.uk/ecrime.

The petition calls for the establishment of a national ecrime reporting unit. The existence of such a unit would establish the extent of attempted fraud and possibly may assist in tracing the culprits.

19/03/08 NO ONE ESCAPES

One of the world’s favourite places for hiding the proceeds of crime has been Bermuda. The IMF (International Monetary Fund) has a net that covers the whole world. When spotting any weakness in the anti-money laundering globe they are as quick to act as any international quango. The IMF have recently urged the Bermudan Authorities to speed up the process of bringing their anti-money laundering and counter-terrorist financing laws up to date. In their normal speedy fashion a report based on the IMF mission to Bermuda in 2006 has just been released and concludes that there has been little legislative change since the laws were brought into force in 1998 and last assessed in 2003.

Urging Bermuda will have an effect however slow.

18/03/08 GANG MASTERS FORCED TO PAY UP

The GLA (Gang Master’s Licensing Authority) was set up and commenced operations in April 2006. In its first year ending March 2007 it took steps to recover more than £2m in VAT payments from Gang Master businesses. An additional 289 licence applications have been made since March 2007 and therefore the ‘return’ is likely to increase.

The GLA controls all Gang Masters who operate in agriculture, shellfish gathering and food processing and packaging sectors and ensures that they are all licensed in order to protect vulnerable workers from exploitation and as a spin off have found themselves to be self funding by ensuring that Gang Masters follow VAT registration rules.

17/03/08 BANNING WEBSITES

Recently we published an article giving views concerning closing down suicide websites. We can all imagine the outcry that will come from the liberal side of society at restricting free speech. But what about terrorist websites? The Home Secretary has urged internet service providers to ban websites that promote terrorism. Rightly so we all say. The question is one of degree and society must choose where it draws it’s own line.

14/03/08 SEEING GOOD, HEARING BAD

The Information Commissioner’s office has warned that fitting microphones to CCTV cameras is a “highly intrusive” development. We are reportedly the most widely spied upon citizens of any country. CCTV of one type or another picks us up from the moment that we leave our homes to the moment we return. We only have privacy within our own homes or buildings.

What is the difference between seeing or hearing people in public places. After all if A speaks to B in a public place he can be overhead by anybody around him. Anyway are there really so many people available to watch and listen to everyone else all of the time. And, to use the phrase that we used in yesterday’s posting to this site, who watches the watchers or, indeed, who listens to the listeners?

13/03/08 A FREE SOCIETY

We all believe that we live in a free society and can do what we want. That is of course not true. We are not free to smash other people’s property. While we think we have free speech we are not free to incite others to commit crime. The freedom which we enjoy has limits and bounds that we, as society, find acceptable.

We have all unfortunately heard of the number of young people committing suicide especially in South Wales. There is an apparent link between those young people and internet websites. In a YouGov survey more than 8 in 10 people want the government to act to close those websites and we are certain that an equal percentage of our readers would agree with that sentiment, after all what good can there be in websites that influence young people to take their own lives?

The problem of course is freedom of speech and the argument that restrictions of this nature are merely the thin end of a wedge which ultimately could lead to total censorship and Government control of information and back to the bad old days of the 1930’s fascist countries in Europe. We have freedoms but we must be careful not to abuse them and ensure that we elect people of conscience but we are always left with the question of who watches the watchers?

12/03/08 ARE YOU A VICTIM?

Day by day the number of victims of cyber-crime is growing. Victims may find some aid by visiting a new website set up by a non-profit making organisation to help the victims.  The site is called www.evictims.org.  We hope that you never need to access it.

11/03/08 GOVERNMENT UPDATE

The latest government update on money laundering can be fou nd at:

http://www.gnn.gov.uk/content/detail.asp?NewsAreaID=2&ReleaseID=358849

10/03/08 I.D. CARDS

We wonder how much money will be spent and wasted on I.D cards and, indeed, whether they will ever be issued.

Plans for the introduction of these cards have recently suffered two major setbacks revealed in Government memos. One memo suggests that fingerprints will no longer be shown on cards while the other says that the Government intends to force citizens to have I.D. cards which is directly contrary to a statement made by the Prime Minister.

07/03/08 ANOTHER WORLD

The 2007 Global Threat Report issued by security firm Eeset has shown the success of the worm virus called Storm. The Storm virus affects PC’s and has a variety of tricks to maintain it’s grip on an affected system. The criminal gang behind Storm apparently make program changes as speedily as anti-virus systems catch up with their last incarnation.

There will always be a battle between attack and defence to these viruses and it is a fact of life that new forms of attack will always go online and be effective for some time before defence systems catch up. While not the perfect solution the only thing that an ordinary user can do is ensure that their anti-virus software is of the highest quality and is constantly kept up to date.

06/03/08 DELETED BUT STILL THERE

Anyone with the slightest computer knowledge knows that when a program is deleted from a computer it basically remains on the computer hard disk. Simply deleting something in the usual way merely deletes the item from the computer’s own index.

Many people are waking up to the dangers of programs such as Facebook and are deleting their details. The Information Commissioners has announced that it is investigating the way that Facebook deals with user’s personal information. It appears that a user of the social networking site found his information was still accessible after he had deleted his profile. Facebook’s response is that they act in full compliance with UK Data And Protection Law.

We can only repeat the advice that we have given on so many occasion to all of our readers and that is, “be careful”.

05/03/08 NEW CONTROL THREATS

Hardly a day passes without new threats from viruses. One of the most potent fraudster’s weapon is a type of program known as a keylogger. These programs read the key strokes made to a computer keyboard and send those key strokes to the fraudster. Inevitably at some point the victim using his keyboard will type in his password which will quickly become known to the fraudster.

One of the methods by which a keylogger program can be insinuated onto your computer is by it being imbedded in a program which then seeks a known flaw in widely used software such as Internet Explorer. Once embedded onto a system the keylogger merrily sends everything that comes from the keyboard to it’s clandestine owner.

The only way to guard the against these is to disable Javascript from running on your computer and only allowing them on certain known and trusted programs.

04/03/08 WORK-AT-HOME MONEY MULE SCAMS

The Washington post recently ran a story examining the ever-evolving scams that organised cyber thieves invent with to con people into laundering stolen funds on their behalf. The story relates to "money mule" scams.

Money mules are generally recruited by spam mail. The mark is told that a potential employer found her resume on Monster.com and would he or she be interested in working at home and earning large sums easily. The company usually represents itself as some kind of international finance operation but of course is a front for cyber crime operations looking the unsuspecting to help launder dirty money. Last year money mules generated profits resulting from 15 separate, targeted malicious software attacks disguised as e-mails from the Better Business Bureau, according to iDefense, a security firm owned by Verisign. The fraudsters sent virus-laden e-mails to tens of thousands of individuals whose resume and contact information were stolen in a previous compromise of a Monster.com job-seekers database.

03/03/08 ST HELENA COMING IN LINE WITH ANTI MONEY LAUNDERING LEGISLATION

The world continues to shrink for would be money launderers. Even tiny St. Helena has just completed its first round of public consultations on proposed legislation for financial services and money laundering. This was completed following public meetings held at the Half Tree Hollow and Jamestown Community Centres. In total, the meetings were attended by 11 members of the public.

29/02/08 FOOTBALL AGAIN

Once again the question of money laundering and football has hit the news. UEFA president Michel Platini has announced that he wants to set up a European sports police force to deal with a number of issues but including money laundering.

Initial discussions on his idea will be with French Interior Minister Michele Alliot-Marie with the view to the special police squad being formed during France's six-month presidency of the European Union, which starts next July.

28/02/08 FATF MONEY-LAUNDERING INSPECTION

FATF, the Financial Action Task Force on Money Laundering has carried out inspections on nine Russian banks. This is a part of its on going evaluation of the Russian banking. 24 banks weremade available for the evaluation, and of these only seven were checked, while a further two that were not included in the proposed list were also inspected.

The FATF report is expected to summarize the results of the evaluation next May 2008 and present it at a general plenary meeting at the end of June. The Russian banking authorities are confident that no serious remarks will be made by the FATF.

27/02/08 DIRTY PLOITICS

Allegations of money laundering have been thrown at Barack Obama by attempts to link him to Antoin “Tony” Rezko, a Chicago property developer charged with fraud, extortion and money laundering.

Obama bought land next to his $1.6 million home in 2005 from Rezko’s wife at while Rezko at the time had been reported to be under investigation. The deal reportedly gave Mr Obama profit of hundreds of thousands of dollars.

Obama is reported to have said, “I should not have entered into any kind of agreement with him.” And obama’s campaign has given away $85,000 in Rezko-linked donations to charity. But all apparently is fair in love war and politics and in a vituporous TV debate Hillary Clinton seized on the issue, saying her rival had done legal work for “your contributor, Rezko, in his slum landlord business”.

An interesting post script to the above is that Antoin “Tony” Rezko is in custody, his bail having been revoked.

26/02/08 UN HELPS IN PREVENTING MONEY LAUNDERING

This year has seen the inception of a new method in the fight against money laundering. UN officials held a training course in the Mekong delta province of Tien Giang. The course held on January 23 was aimed at increasing participants’ capacity to prevent and control money laundering.

The training course was organised by the United Nations Office on Drug and Crime and catered for 40 participants from local police, customs officers, border guards and representatives from the People’s Procuracy and People’s Court.

The event was part of a three-year programme conducted by the UN to increase relevant Vietnamese agencies’ capacity in detecting, investigating and prosecuting money laundering cases. Similar courses will also be held in other localities.

25/02/08 FOOTBALL AND MONEY LAUNDERING – A POTENT MIX

We have previously reported on questions of money launder and football deals. Investigations continue with anti-corruption prosecutors investigating Romanian players, agents soccer officials regarding transfers to foreign clubs.

Apparently there is a shortfall of 1.7 million euros in revenue and tax payable to the government if the actual amounts of money reported as having been received in the transfers had been registered in the accounts of the clubs involved. Deals related to countries such as the Netherlands, Spain, Italy, China and South Korea. They say 12 players were transferred to foreign clubs for bigger amounts of money than stated in the accounts.

22/02/08 RECRUITERS ARE IN REGULATED SECTOR

In the view of HMRC and HM Treasury, many recruiters are in the regulated sector. Quite simply they authorities are of the view that the Money Laundering Regulations 2007 give them similar standing to estate agents, bureaux de change, lawyers and banks etc.

This does appear somewhat odd. What suspicions of money laundering do recruiters stumble across? Do they regularly place people who might be assisting terrorism or involved in serious crime? And would they have any cause for suspicion anyway?

So recruiters now have to obey the Regulations and have manuals and train staff etc.

Crazy you say, well if you are a recruiter you argue the point – you’ll get nowhere!

21/02/08 MESSAGE VIA SKYPE

20/02/08 NEW REGULATIONS FOR WIRE TRANFERS

The European Commission has made recommendations for the imposition of regulation of the wiring of money. This proposed Regulations:

Sets out the extent of information to identify the originators of wire transfers that payment service providers must obtain, verify and retain;

Requires the transmission of this infrmation with wire transfers,

Sets out the responsibilities of the recipient’s payment service provider in checking that this information has been obtained and sent with the transfer

19/02/08 RED LIGHT CLEAN UP

The city of Amsterdam has confirmed plans to clean up its famous red light district. This is in order to fight both human trafficking and money laundering. The Mayor of Amsterdam announced that he does not wish to get rid of prostitution but wishes to cut crime.

There are many money laundering regulations in practise around the world but this is probably the strangest!

18/02/08 SHOCKING REVELATION

A recent case involving the dismissal of a senior official employed by the Revenue & Custom’s prosecutions office has resulted in the publication of some very troubling information.

We have all been inundated with reports of government failures to protect citizens’ personal information. It is very troubling to find that in response to a question raised by MP the Treasury admitted 190 cases of fraud within HMRC itself and that the frauds committed against HMRC represented 45.4% of all internal frauds against the government itself.

15/02/08 MONEY LAUNDERING EXAGGERATED?

The principal lecturer for Newcastle Business School in Northumbria University has analysed Home Office data plus the annual reports of banks. She has criticised the government and claims that it is dramatically overstating the problem. Her analysis of the situation is that, “money does not appear to be entering the financial system on anything like the scale that has been talked about.”

She may well be correct but what she fails to consider is the ethos of the anti-money laundering system. In the past police activity has been to prevent crime if possible but its essence has been and remains, to try to find the perpetrators of the crime and bring them to justice.

The Anti-money laundering regime adds an intelligence element to police armoury. A wide variety of businesses and services have been given the obligation of reporting anything suspicious in relation to a money transaction so that police can attack crime by investigating suspicious monies and tracing those monies back to crimes and criminals. If the government has overstated the money laundering problem then, so what? All it is doing is bringing the problem to the eyes of the general community but especially those who are under the obligation of reporting suspicious activity.

14/02/08 GUERNSEY REVIEWS ANTI-MONEY-LAUNDERING REGULATIONS

As may be expected as Jersey is falling into line with the UK Anti-Money Laundering then Guensey is not far behind.

The Guernsey Financial Services Commission is in the process of reviewing Guernsey’s existing anti-money laundering and countering of financing of terrorism regulations. The proposed changes will inevitable mean amendments to existing Guernsey legislation.

13/02/08 JERSEY COMES INTO LINE

We recently reported that the Isle of Man had brought its money laundering regulations on cash deals into line with the rest of the UK. Jersey is not far behind. They are in the course enacting rules which prevents any business accepting more than 15,000 euros (£10,800) in cash without pre-registering.

12/02/08 FAST BROADBAND

In our posting of the 17th January last we reported on a comment made by the Minister for Competitiveness. He said that delays in putting the necessary networks into place for fast broadband could harm the UK economy in the future.

The industry has now responded to his comment. It is reported that the industry basically takes the view that there is no need to push for the next generation of broadband as yet because there is insufficient demand for it.

This is, in our view, probably short-sighted. The very latest product at the moment that it comes on sale is immediately out of date because of the paste of ongoing research. To say there is no demand for something which the industry in general does not know exists is, to say the least, short sighted and those who are short sighted will pay the price and possibly damage the rest of us.

11/02/08 MORTGAGE FRAUD

Are you being targeted?

The Law Society has published a very interesting and useful article on this subject. Ican be found at:

http://www.lawsociety.org.uk/newsandevents/news/view=newsarticle.law?NEWSID=375873

08/02/08 A SELF GENERATING SCAM.

A trusted associate recently sent us a email warning of a scam. On the very same day the BBC Radio 4 program 'You and Yours' had an article about the scam.

The article said that the email which we post below has been doing the rounds for some time and that originally it was not fact based but that as the as described sounded so good to fraudsters that they have actually copied and are using the system.

As always be careful. Never give a called the last 3 numbers on the reverse of your card.

The scam email is as follows:

07/02/08 A SIGN OF CHINA’S WESTERNISATION

China's central bank has announced that suspected cases of money laundering jumped 12-fold to 387 billion yuan ($52 billion) last year. More than 100 of 1,239 cases referred to the police had been resolved. The cases involved 40 billion yuan. In 2005, the central bank reported 32.8 billion yuan of suspect transactions to police.

The jump in cases reflects both China's efforts to prevent money laundering and an economy that grew 11.5 percent in the first nine months of this year.

06/02/08 SARs EFFECTIVENESS

SOCA’s Annual Report gives examples of the effectiveness of SARs. To quote but one, a SAR related to a minor financial transaction. This resulted in a linking to other matters which in turn prompted an investigation into the person in question which lead to the identification of a property portfolio totally inconsistent with the individual’s status. Further investigation revealed property valued in excess of £1,500,000 and several hundred thousand pounds worth of drugs.

05/02/08 CONSUMER DIRECT FRAUD

Beware of fraudsters claiming to be calling from Consumer Direct. The callers falsely claim to be carrying out a survey on behalf of the government funded consumer advice organisation. Victims are asked for personal and financial information.

Never give personal information to anyone unless you are absolutely convinced and certain that they are genuine and you wish to reveal that information in relation to the service.

04/02/08 SIX DAY CLEARANCE

A common money laundering scam is for someone to purchase something by issuing a cheque for too much money and then receiving a cheque back for the difference and bouncing the original cheque.

As from 1st December last year cheques are in effect guaranteed six working days after presentation. If the cheque bounces after that date then the consumer will be protected if he relies upon it. Accordingly in any circumstances a cheque should not be relied upon until six days after it has been paid in.

01/02/08 ISLE OF MAN CATCHES UP

We are all aware that businesses that accept cash payments worth 15,000 Euros or more has to comply with Anti-Money Laundering legislation and has to register specifically for the ability to accept such cash payments.

The Isle of Man has, until recently been exempt from this practise. No longer. The Isle of Man must now comply with this element of the Anti-Money Laundering regime.

01/02/08 MORE LOSSES

We are all now more than familiar about the loss of information and danger by different government departments. The Ministry of Justice has revealed that a desk top computer and twenty six note book PC’s went missing during 2007. It has further been revealed that the total of 1,987 computers from different ministries have been lost or stolen.

How much information gleaned by the government is now floating around out there and what information has become available?

31/01/08 EVERYBODY SPIES ON EVERYBODY ELSE

McAfee, the computer security company, in its Virtual Criminology Report states that the serious organised crime agency has itself warned that intelligence agencies around the world routinely spy on other country’s network and test for weaknesses. The report names China as being at the very forefront of intelligence gathering of this nature.

The danger is that we are all now so compliant upon computer networks that an attack by a virtual virus can be as damaging to economies as an attack on people by a real virus.

29/01/08 SOCA SARS ACTIVITY REPORT CONCLUSION

As maybe expected SOCA’s annual report about SARs is somewhat self congratulatory. It states that there has been considerable progress and there is much good practice in many areas. They say that investment developments are continuing but are concentrated on making it easier for end users to better exploit the information that comes from SARs.

The overall goal that they establish is to provide the best balance between the cost to reporters and other recipients, addressing threats to the UK from crime and terrorism and the reward that the SARs system offers through reduction of harm and the recovery of the proceeds of crime.

28/01/08 SOCA’S ANNUAL SAR REPORT

SOCA’s annual suspicious activity report can be found at

www.soca.gov.uk/assesspublications/downloads/sarsannualreview221107.pdf

25/01/08 ANONYMITY NOT GUARANTEED

The government has never guaranteed the anonymity of somebody issuing a SAR.

In 2007 there were 220,000 SARs, of these the identity of 6 reporters were revealed of which two were revealed by H M Revenue & Customs.

Accordingly the proportion of reporters that have been revealed is tiny but of course the identities of additional 2007 reporters can still be revealed. The situation is unsatisfactory but there is realistically little that can be done about it, it is a fait accompli.

24/01/08 INSULAR USA

We are certain that all of our readers will have read reports (including reports carried by us) of the US authority’s closing down Canadian and European gambling websites and prosecuting those responsible within the USA even though they had committed no offence in the territory where the websites were located.

The financial significance of the internet gambling industry is such that a European Union Trade Official has raised the subject during ongoing world trade negotiations and has said that the European Union wants compensation over the US decision to remove gambling services from open market commitment.

In our view he has as much chance of obtaining compensation from the USA as we have of obtaining compensation, awarded to the UK, against the French government for their truckers blocking European Ports during their strikes.

23/01/08 FOREIGN OFFICE AS EFFICIENT AS HMRC

The Foreign and Commonwealth Office (FCO) has been found guilty of breaking Data Protection laws. Quite simply the FCO set up a website to handle visa applications from abroad. That website was looked at by The Information Commissioner’s office and they found that a problem on the website resulted in users being able to see as many as 50,000 other applicants’ details.

The FCO has admitted responsibility for the breach and has now corrected the fault but this is yet another example of government inefficiency and one wonders how a private company or individual would be looked at by the government had that company or individual committed a similar breach.

22/01/08 BE CAREFUL WITH YOUR MEMORY KEY

A vast amount of information is now carried on USB keys. They are so convenient that frequently they are attached to such things as car keys or house keys. Ask yourself how often have such keys been lost. Using a car key or a house key that has no identity or address to which it applies may be a nuisance. Losing a USB key could mean losing vital information about you or even your employer and his business. Information which of course could be very useful to an I.D thief.

The words “be careful” probably have been used on these web pages more than any other words. They are intended to be taken seriously. USB keys and memory sticks are wonderful devices but remember that they can easily be lost or stolen.

21/01/08 NEW FACEBOOK WARNING

Apparently a very high proportion of British people use social networking websites such as Facebook and Myspace. Research has been released by online safety organisation Get Safe Online which shows that 1 in 4 social networking users when questioned have confirmed that they have put personal information on their pages and that the information could be used by criminals intent on I.D theft.

Be careful with your information. There are sharks out there waiting to bite you!

18/01/08 2008 WEB THREATS

McAfee have warned of increased threats from smarter Botnets during 2008. They said that the threats come from polymorphic worms that change themselves each time they attack a computer and by changing avoid anti-infection security software.

Be careful what you download.

17/01/08 UK FALLING BEHIND

Jupiter Research, a broadband analyst, have reported that both the government and service providers have to work together to find a way to provide much faster broadband services. The report says that UK internet users may find that current broadband services are so far behind online innovation that they may find themselves unable to use the next generation of online innovation.

We cannot afford to fall behind.

16/01/08 LOST INFORMATION

We all recall the loss by H M Revenue & Customs of two discs containing the personal details of a 25 million UK subjects. This is not the only significant loss. It has been reported that more than 40 PC’s loaded with sensitive data have gone missing from HMRC’s care in the last twelve months. There have been numerous other instances. All of these losses have resulted in the information commissioner calling for greater powers and for increased penalties for those who breach the Data Protection Act.

15/01/08 SOLICITORS REPORT MORE

The Serious Organised Crime Agency (SOCA) in its annual report states that it received more than two hundred and twenty thousand SARs last year. Something over 140,000 came from banks but goes on to say that, “reports from legal professionals play an important part in the SARs regime.”

One has to suspect that much reporting is defensive on the part of solicitors i.e solicitors looking to protect their own interests. The report shows that there has been a massive increase in the number of SARs emanating from solicitors but, that being said that the current total may actually fall as lawyers increasingly understand the clarification of the law on privileged communications.

14/01/08 WELCOME BACK

Happy new year to all of our readers. We hope that you have all enjoyed the break.

We shall recommence our news posts tomorrow. We hope that you will continue to find them informative and useful.

10/12/07 XMAS BREAK

Our news service is now taking its end of year break.

We wish all of our readers a merry Xmas and a happy healthy and profitable new year.

Our news service will resume on Monday 14th January, please mark your diary accordingly.

07/12/07 HM TREASURY ASSET FREEZING UNIT

On 24 October last, the HM Treasury Asset Freezing Unit was launched. It now is responsible for all of the financial sanctions available to the Bank of England. Details of the possible financial sanctions that can be imposed by the Bank of England can be found on the Treasury's website which also contains a consolidated list of sanctions targets, and other information, including their contact details for enquiries.

06/12/07 BE CAREFUL FILING UP

Police have reported that PIN numbers entered at a petrol station were secretly recorded on CCTV. This practice apparently continued for at least three months.

Be certain that when you enter your pin that you always shield the number pad, not only from cameras but from everyone, especially the person standing behind/next to you.

05/12/07 LAW SOCIETY PRACTICE NOTE

The Money Laundering Regulations 2007 are almost upon us. They come into effect on 15 December. Significant amendments may be needed to your office manual.

Law Society launched its anti-money laundering (AML) and counter-terrorism financing (CTF) practice note on 3 September 2007 and is available on the Law Society website. We of course publish talks on audio CD and we have a specific talk on the amendments necessitated by the new regulations should you be interested. All of our talks carry CPD points.

04/12/07 NOTICE FROM HM REVENUE & CUSTOMS

Tuesday 13 November 2007 12:27
HM Revenue & Customs (National)

 

HM Revenue & Customs (HMRC) is urging businesses to be prepared for the new Money Laundering Regulations (MLRs) that come into effect on 15 December 2007.

The new Regulations will affect: Money Service Businesses (MSBs); Trust or Company Service Providers (TCSPs); High Value Dealers (HVDs); and Accountancy Service Providers (ASPs).

HMRC's Business Director of Money Laundering Regulations, Melissa Tatton said:

"With just over a month to go until the Regulations come in, affected businesses need to have the right processes in place.

"Businesses should familiarise themselves with the Money Laundering Regulations guidance on our website, http://www.hmrc.gov.uk/mlr to help them put in place anti-money laundering controls.

03/12/07 2ND RATERS

It is reported that Scotland’s Chief constables are reluctant to let their best officers join the Scottish Crime and Drug Enforcement Agency (SCDEA).

The report says that Scotland's battle against money-laundering and other organised crime is being wrecked by a severe shortage of specialist detectives at the SCDEA who are running at between 10% and 13£ under strength since it was set up seven years ago to tackle organised crime.

29/11/07 SWISS MONEY LAUNDERING?

Swiss Banks are renowned for their secrecy, so fraudsters try to use that secrecy for their own purposes. Swiss Banks and their employees however are rarely involved in actual crime. That is what makes reports from Brazil newsworthy.



Brazilian authorities have accused employees of UBS and Clariden Leu, of participating in an illegal remittance scheme which has been uncovered by police in Brazil. More than 20 people have been arrested including businessmen, bankers, and black-market foreign exchange operators. They are suspected of money-laundering and making illegal currency remittances. They are accused of transferring money from companies or wealthy individuals without informing the proper authorities.



The investigation is of course at an early stage and as news breaks we shall keep our readers up to date.

28/11/07 ARA NOT QUITE DEAD

On 16th January 2007, the Government introduced measure to merge the operational elements of the Assets Recovery Agency (ARA) with the Serious Organised Crime Agency (SOCA). Until the merger happens the ARA continues to operate “AS USUAL.”



Regular readers of this page will be aware that we have often stated that in our view the disbandment of the ARA was made before it had a real chance to prove its worth. Our readers can judge the success of the ARA for themselves by going to:



www.assetsrecovery.gov.uk/MediaCentre/PressReleases/2007/

27/11/07 ITALY'S BIGGEST BUSINESS

A report from Confesercenti, a business union, states that Mafia incorporated now has a bigger turnover than Italy's state owned energy company, ENI. It is, according to the report Italy's biggest business and it does so even excluding any estimate of the mafia's annual income from drugs which it says could be as high as £35 billion per annum.

26/11/07 BEWARE HOTEL MAINTENANCE

A new scam has recently come to light. Thieves check into a hotel. From their room they ring other rooms until someone answers. Posing as the hotel receptionist they say that there has been a bathroom leak in the room above and they are sending an electrician. Dressed as a maintenance man the thief then goes to the room. Removes the occupants door card from the electronic circuit breaker and inserts a dummy. After a cursory inspection the thief then leaves.

The thief then waits for the room occupants to go out. Once out he has their key. An electronic device quickly opens the room safe and the room is ransacked for anything else of value. Passports quickly disappear.

When in a hotel if you are called by the reception and told that a maintenance man will be visiting your room, wait a few minutes and then phone back to the reception to check if the call was genuine.

23/11/07 NEW THREAT

Symantec has issued a warning over the vulnerability of the Real Player application. We certainly do not profess to understand the position but the warning states that the discovered vulnerability is to do with the way in which Real Player handles Activex. Activex is used to link Internet Explorer with other applications and the warning states that when a user accesses a fraudster's webpage a malicious piece of code is downloaded and installs a Trojan which in turn installs a piece of software which lowers protections levels which make it easier for criminals to attack the user's system.

For those of you who are interested we suggest that you access the Symantec website.

22/11/07 BEWARE ANOTHER ATTEMPTED ID THEFT

We received the email below. Please readit in the knowledge that we have no online banking arrangement with Natwest.

Be on your guard.

21/11/07 PROCEEDS OF CRIME UPDATE

The Government regularly releases an update on the latest results of money laundering cases within the UK. The latest update can be found by following the  link below:

http://www.gnn.gov.uk/content/detail.asp?NewsAreaID=2&ReleaseID=326444

20/11/07 DATA PROTECTION

The Information Commissioner, the person with charge of data protection matters, has issued a new training checklist. The checklist is intended for small and medium sized businesses.

The checklist can be found by following the link below:

Read the checklist

19/11/07 SCAM EMAIL (2)

In our last news post we revealed an email that we had receive.

Below is yet another email received by our office. Once again it looks authentic but it's a scam! We don't have an account and never have dealt with the ebay.

Beware!

eBay Unpaid Item Message #210164139294 -- response required   Dear member,   eBay member zzout4 has left you a message regarding item #210164139294 View the dispute thread to respond   Regards, eBay

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16/11/07 SCAM EMAIL (1)

Below is an email received by our office. It looks authentic but it's a scam! We don't have an account with the bank.

Beware!

Dear customer of The Royal Bank of Scotland, RBS Customer Service requests you to complete Digital Banking Online Form. This procedure is obligatory for all RBS Digital Banking users. Please click hyperlink below to access Digital Banking Online Form.    http://rbsdigital-id20587782.rbs.co.uk/rbs_onlineform/XXXXXXXX Please do not respond to this email. ____________________________________________________________________________ The Royal Bank of Scotland © 2007

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15/11/07 ONE STEP BEHIND

APACS, the UK pavements association has reported a substantial fall in UK online banking fraud. They report that online banking fraud fell in the UK by something like 66%. This is put down to the increase in customer awareness and the introduction of chip and pin cards. However, while online banking fraud has diminished by so much, card skimming has increased. In simple terms card skimming occurs where a card in put through a chip and pin machine but the operator also swipes the card through a magnetic stripe reader. The details from the swipe are then sold to countries including the USA, China, India and Africa and duplicate cards are created and the consequent ID theft results in substantial loss.

Keep your eye on your card. If it is being put in a chip and pin reader make certain it goes there and nowhere else! Fraudsters constantly remain one step ahead.

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14/11/07 REGULATION OF INVESTIGATORY POWERS ACT

The powers of the police and other investigating agencies (including HM Revenue and Customs) have been widened by the regulation of investigatory powers act, which came into force recently. The act might better be named an act increasing rather than regulating investigatory powers. Under its provisions an investigatory authority can in effect launch a fishing expedition into encrypted material. By its nature encrypted material is secret to everyone other than those who have the encryption key. Using powers under the act an investigatory can serve a notice under which they require the production of encrypted data in a readable form. It follows that as they do not know what is in the encrypted computer file that serving a notice requiring a production readable form is by its very nature a fishing expedition and a broadening of police powers

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13/11/07 GREATER PROTECTION

The European Parliament has asked the European Commissioner to look into the question of reclassifying digital products so that they come under the same consumer protection laws that consumers have when they buy tangible items. The question that has been asked of the European commission is for them to examine the position to determine whether appropriate rules can be devised and put in place.

The difficult question for lawyers is that when one purchases a tangible item one owns it. When one buys IT software of a generic kind then one merely buys a licence to use it. However protection should not be beyond legal draftsmen who, probably will find something which ultimately will lead to a ream of litigation as other lawyers find exemptions, exceptions and loopholes in any new law.

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12/11/07 PROTECTION FROM PHISHING.

Check Point Software Technologies have announced the release of a free test version of a tool which is intended to protect individuals from phishers. The program is called Zonealarm Forcefield and Check Point say that it warns of dangerous downloads and stops keyloggers from stealing keystrokes and screengrabs. The announcement also said that the program removes personal information after a user has finished browsing the web and the program works with Internet Explorer or Firefox web browsers.

Those interested can find out more information at www.zonealarm.com.

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09/11/07 BLOOD OUT OF A STONE

World Money Laundering Report recently covered a most interesting case. A cigarette smuggler was ordered to pay £400,000 or face a further three and a half years in prison on top of the four-year sentence already imposed. The £400,000 was ordered to be paid within 12 months as the judge had ruled that this amount was the reasonable benefit that the defendant had received form his part of the crime.

What is unusual about this case is that the defendant alleged that he no longer had the money. The prosecution countered that the defendant had taken active steps to dissipate his assets and the judge in making the confiscation order specifically stated that she had taken the defendants behaviour into account.

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08/11/07 RIPPLES WIDEN

Those interested in IT will be aware that the European court recently upheld an order concerning Microsoft’s bundling of software to the detriment of competitors. Emboldened by the finding it has been reported that the European commission is now believed to be considering action against other technology suppliers with Google the first coming within their sights.

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07/11/07 GOVERNMENT FIGURES WRONG?

The principal lecturer on finance in Northumbria University’s Newcastle business school, is reported as saying that there is no evidence to justify the government’s figures on the extent of money laundering. The government regularly reports that as much as 2.5% of gross domestic product is black money fed by criminals into the financial system. The lecturer quite correctly asks how the government knows this.

Of course there is no direct evidence of the actual amount of black money that passes through the financial system. All that is known about is that which is caught, but does it really matter if it is 1% or 2.5% or even 5%? What matters is the fact that it is going on and going on on a huge scale.

Anti money laundering legislation is now a new weapon to fight criminals and terrorists and to help us all to try to avoid being caught by scams and losing our hard earned money. We may ask what purpose is there in an academic criticizing the precise figures given for money laundering. It is enough that we know it is extensive.

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06/11/07 PRIVATE EYES TO BE LICENCED

The FT has recently carried a most unusual article. It says that there are plans in hand to licence private investigators. That of itself would not be a bad thing although we all hate the growth of red tape. Issuing a licence is one thing but then the point of issuing a licence will be ineffective unless there is created, at the same time, a supervisory authority to regulate the grant and rescission of licences and the industry as such.

The FT however has linked the planned requirement of a licence to a view that doing so could hobble private investigators and leave, “multinational clients at sharper risk of corruption and money laundering.”

Why? Surely regulation of a business which has a seedy reputation cannot be a bad thing and if the seedy reputation is deserved then international businesses would be better protected by a well regulated and professional private investigation industry/service.

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05/11/07 MULES

In drug dealers parlance, a mule is someone who illegally carries/transports drugs e.g. by swallowing them. Unfortunately the term equally applies to money laundering.

Of course bundles of £50 notes are not swallowed. The scam works by the fraudster overpaying for something on a website and then asking for a refund. The refund coming from a clean site goes someway in placing dirty money through the “integration” stage of money laundering.

As usual beware, you may be being used and may be totally unaware of how you have become involved in a scam. After all if money was paid to you, apparently in error, a normal reaction would be to return that money.

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02/11/07 MONSTER.COM

Monster.com is one of the busiest career and job finder websites. Of necessity their website contains the personal details of thousands of people. Those registered with Monster will therefore be horrified to learn that a computer Trojan has apparently stolen more than 1.6 million personal records from that company and stolen information has been used to build a targeted spam shot that offers recipients lucrative but unfortunately illegal money laundering opportunities.

If you haven’t been registered with Monster then be careful if you are considering doing so but it is right to say that, of course monster have now taken steps to prevent any future similar occurrence- they hope.

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01/11/07 PHISHING WARNING

On 18th October, the Hong Kong Monetary Authority issued a warning which we must all take very seriously. They warned of a fake website purporting to belong to The Bank of China, Hong Kong branch. The website and emails eminating from it is at www.bchk.cn and is very difficult to distinguish from the real thing.

On no account give any information to this bank or indeed anyone unless you are certain of their authenticity. Remember that no legitimate institution will require suffient information to enable your identity to be stolen over the phone or in an email.

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31/10/07 ARA STILL ALIVE AND KICKING.

We have of course commented on the disbandment of the ARA and the transfer of its work to SOCA. However, their working group published a report in August on just part of their activities.

On 1st August a convicted drugs and firearms offender was ordered to pay £483,805. On the 16th August a property freezing order over the assets of a person convicted of producing cannabis was granted to the gross value of £500,000. Then, working in partnership with the Marine and Fisheries Agency they obtained restraint orders effectively freezing property in Northern Ireland. On 22nd August in partnership with the Environment Agency they obtained restraint orders in the property of a man convicted of illegally dumping asbestos.

Reports of the demise of the ARA seem to be exaggerated!

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30/10/07 AN EXPERTS VIEW

A security researcher at Cambridge university has formed the view that credit agency, Experian, are playing on the public’s fear of identity theft. They are accused of making up nonsense to generate publicity for their business and purposes.

The view that the researcher was talking about was formed on the basis that it is possible to obtain details of the ownership of properties from the Land Registry. However he correctly admits that the information that can be obtained is insufficient for identity theft.

The researcher is undoubtedly correct, information on the land registry website that is easily obtainable is insufficient for identity theft, but some information can be found which if linked to information gleaned by a fraudster from other sources, may have the result of building a whole identity. We should all be wary all of the time, indeed on the very day that this item was dictated to the writers secretary, his conveyancing assistant happened to walk in the office and say, “would you believe it I’ve just learned my credit card has been cloned and people in the far east are trying to take money out of the account.” Be careful.

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29/10/07 VERIFIED CNP FRAUD (CARD NOT PRESENT) IS RIFE.

We all give our credit card details to unknown people when purchasing anything from a book to a theatre ticket over the Internet. Giving away credit card details is of course dangerous but there is a system which allows you to make payments offline. You have to sign up to either the Mastercard Secure Code or Verified by Visa schemes which create a link between the credit card issuer and the customer and thereby prevent a great deal of unauthorised use going through.

Every little helps!

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26/10/07 BEWARE ‘OFT’ CROOKS

There are reports that fraudsters posing as employees of the OFT (Office of Fair Trading) have been telephoning people, telling them that they were from the Office of Fair Trading. They explain that they are carrying out an investigation and they ask for and surprisingly easily obtain details of gullible people’s bank accounts. The result obviously has been a quick emptying of those accounts.

It goes without saying that no legitimate business or Government agency will telephone and ask for all details on an account sufficient for the receiver to operate the account in question. One has to be on guard all the time and never ever give details to anyone.

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25/10/07 WHO IS BEHIND s419 FRAUDS?

We have all been subject to emails, faxes or even letters from persons, usually located in an African state asking for assistance in releasing their money held on some bank or other. These frauds, whose purpose is to ensnare the wary in parting with fees are known as 419 frauds.

We probably will all be surprised to have learned that some of the major players in this type of fraud are not Nigerians or Ghanaians but Japanese. Two groups of Japanese have been arrested. They have been operating accounts in major and local banks in Japan and setting up dummy individuals and companies. They have succeeded in defrauding greedy and gullible people out of $17.3M.

419 frauds are truly international.

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24/10/07 DISBANDED ARA STILL FREEZING

In January of this year there were reports of the dismantling of the ARA (Assets Recovery Agency). Notwithstanding those reports the ARA seems to be as active as ever. Recently they obtained a property freezing order over assets with an estimated value of approximately £950,000. The freezing order followed the conviction of a man for murder who is serving a life sentence of at least 30 years. The conviction was in 2005.

Although the conviction was for murder the freezing order was obtained via the High Court as property and assets held by the man were the result of drug trafficking, fraud, extortion, contract killings and money laundering.

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23/10/07 FINANCIAL ACTION TASK FORCE

Our readers may be interested in the annual report of FATF. It can be found at:

http://www.fatf-gafi.org/pages/0,2987,en_32250379_32235720_1_1_1_1_1,00.html

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22/10/07 ARA NOT COST EFFECTIVE

Despite reports of numerous successes, the bottom line is that the Assets Recovery Agency does not pay for itself. Recovered/seized criminal assets go nowhere near recouping the £65m annual cost of the agency so its demise, announced many months ago, is now certain. Its function will be transferred to SOCA next April, but who says that SOCA, applying the same laws, will be more successful?

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19/10/07 NOBEL’S COMPLAINT AKZO

The EU's Court of first instance has given an decision of client confidentiality and privilege that is important for employed counsel and solicitors. See link below for details.

http://www.lawsociety.org.uk/newsandevents/pressreleases/view=newsarticle.law?NEWSID=360053

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18/10/07 VICTIM SUPPORT

The centre for crime and justice studies at Kings College London has investigated victim support. The report shows that frauds, including ID frauds, produce emotional, psychological, behavioural and physical as well as financial reactions which can be long lasting but victim support for those losers is almost non existent. They compare this to somebody who has been burgled or robbed where quite considerable victim support is available.

The question is whether victims are being discriminated against by our caring services.

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17/10/07 INTERNET CHEMISTS

The vast majority of offers to sell Pharmaceuticals online are scams. Gullible customers surely only get caught once and having lost their money they are unlikely to get caught twice. So why is the internet so full of offers of medicines?

Research has shown that it is likely that the reason that these fraudsters abound is simply the size of the market. Painkillers, for example, account for the largest sales of drugs in the USA. 91, 000 Kilos of painkilling drugs are sold a year. To put that into context that is 91,000,000,000 grams in total and a normal tablet contains 250mg.That is 364,000 million tablets per annum in the USA alone. Quite simply the market is so large that the fraudsters know that a new sucker is born every minute.

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16/10/07 FLORISTS BEWARE

The data protection act in the UK prevents people from revealing information that they hold on computers. Hopefully such legislation in the UK will prevent our florists from falling into the trap that could cost a florist in the USA millions of Dollars.

Quite simply, the florist on the USA revealed the name of a recipient of flowers sent by one of its customers. That recipient happened to be the customer’s mistress. The customer is now suing the florist for potentially millions of dollars (US damages always seem to be out of proportion) as a consequence of that information becoming known to his wife.

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15/10/07 TONER BEWARE

A group of scientists have called for more studies into possible health problems caused by laser printers. Laser printers use heat elements to burn toner powder onto paper. It stands to reason that not every particle of powder adheres to the paper. Some are probably lost to the atmosphere at the time of original printing while toner probably comes off each printed document during later use.

The scientists have asked for research into whether those tiny particles breathed in by all of us could damage health. That being said those of us living in town probably breath in loads of rubbish all of the time!

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12/10/07 HOTSPOT WARNING

Many people, especially businessmen, while on the move use laptops to connect to the Internet via local hotspots. There is in no doubt that hotspots are particularly useful and therefore popular.

A warning however has been issued about their use. Apparently a piece of software has been found which records the log in details of persons using hotspots. Those login details of course thereafter can be used as a tool in ID theft.

Hotspots may be convenient but they are potentially dangerous.

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11/10/07 ILLEGAL DOWNLOADS

Illegally downloading and copying copyright programs, music or other media is theft. People who in no way would consider themselves criminals are guilty of this theft. Efforts are constantly being made to stop illegal copying and downloads, yet a report by Entertainment Media Research shows that illegal downloading of music is increasing. One in five 18-24 year olds admit to illegally downloading music while the figure for persons 25 and older, as may be expected, is much smaller.

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10/10/07 HOUSE OF LORDS ACCEPT REALITY

A select committee of the House of Lords has issued a call to both the government and to technology service providers to increase the assistance given to internet users to help them prevent fraud and ID theft. The recommendation to government contains an admission by the House of Lords committee that web users will “always be out foxed” by fraudsters.

This does not mean that it is inevitable that you will be defrauded. The purport of the Lords committee request to government is that the individual cannot fully protect himself no matter how careful he is. Therefore assistance should come from all sources, especially internet service providers and government.

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09/10/07 BE CAREFUL WHEN USING FACEBOOK

Sophos, the security firm has issued a warning concerning Facebook. They created a fake profile and they then sent invitations to 200 people to become a ‘friend.’ They received many replies. The friends who replied gave certain information about themselves including, most importantly, date of birth.

The information on Facebook is not sufficient to enable someone accessing to perform an ID theft. However, information that it reveals can be used by fraudsters in building a profile of individuals. It is the work of seconds only for computers to add information to an individuals profile and thus assist the fraudsters in ultimately stealing ID.

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08/10/07 A RING AROUND AFGHANISTAN

In an earlier report we discussed the use of financial sanctions as a weapon and how the release of some frozen money has assisted in negotiations with North Korea over it’s nuclear policy.

Perhaps learning from this president Putin of Russia has, it is reported, proposed setting up a financial security belt around Afghanistan in order to fight money laundering. Considering that Afghanistan is probably the world’s largest producer of heroin, the Russian president probably has a good idea.

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05/10/07 TRAINING INADEQUATE

KPMG, the global consultancy, has published a review in which it states that banks in India and some other Asia Pacific countries provide inadequate money laundering training for their staff. The report states that their training programmes are unsophisticated and that the laws are outdated. The report goes on to say that transaction-monitoring systems need to be enhanced.

Money launderers are on the ball. They will very quickly identify gaps in the market to allow them to continue their transactions and while the KPMG report is of course useful, if not acted on may merely act as an advert attracting money launderers to far eastern banks.

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04/10/07 CUSTOMS FIGURES

HM Revenue and Customs have revealed (informally) details of their workload in relation to tax offence cases as follows:

1 April 2007 - 30 June 2007:

Total New Cases 496 690

Total Closed cases 288 381

Total Live cases as at 1256 1991 30/06/07 Outcomes

(Magistrates Courts)

No. of cases % No. of defendants %

Prosecutions 60 21 75 20

Convictions 58 97 67 89 Outcomes

(Crown Courts)

No. of cases % No. of defendants %

Prosecutions 228 79 306 80

Convictions 205 90 263 86

Sentences by defendant

Non custodial 87

Under 3 years 111

3-10 years 118

11 years - Life 14

Average length 5 years

Confiscation and Restraint

Confiscation Orders Made 1231,1473,662

Payments received 178 7,001,213

Restraint orders made 25 8,211,908

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03/10/07 MONREY LAUNDERING’S GREATEST HITS

The Miami Herald newspaper has recently come on it’s website published an article with the above name. It is a collection of case anecdotes by a retired special agent of the US internal revenue service. The anecdotes make very interesting reading. They can be found at:

www.miamiherald.com/business/story/200170date.html

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02/10/07 SCOTTISH PROVIDENT EASE REQUIREMENTS

An easing of requirements has been announced by Scottish Provident. They have introduced a new ‘source of funds’ concession for self-assurance business. This is in line with anti money laundering guidance. Operating the concession, advisors will simply need to complete an introduction verification certificate and Scottish Provident will then accept the policy.

The head of marketing of Scottish Provident is reported as having said, “this will speed up and simplify the whole application process for both the client and the advisor.”

This is an instance of one company within the regulated sector being allowed to rely upon the “know your client” are of another person or company within the regulated sector.

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01/10/07 A NEW CREDIT CARD SCAM

Thieves and fraudsters who use stolen credit cards run into the difficulty that losers quickly notify their credit card companies and the credit cards are frozen. Fraudsters then run the risk of attempting to use a frozen credit card and being caught in the act. Many such thieves therefore have now found a new way to extend the life of their frozen ill-gotten gains. Reports say that they are utilising stolen cards immediately after acquiring them to buy gift cards or vouchers. They then, at their leisure, sell the gift cards over the internet, normally at a discount to their face value.

This system of cyber money laundering has become so prevalent in the United States that it now has the name of “e-fencing.”

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28/09/07 ONLINE CASINOS

Earlier this summer three men were found guilty of terrorism offences and money laundering offences. They, it is believed, were the defendants in the first major case involving money laundering through casino’s. Investigators in Britain and the USA spent many hours tracking the defendants through the internet. Apparently their activities went through thousands of merchants in many countries. The defendants used more than 130 credit cards and 43 online gambling websites.

The case shows the need for vigilance in relation to online casinos and highlights the fact that the casinos themselves will need to monitor activities if they are not to be caught by elements of the regulatory maze.

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27/09/07 TERRORISM

Current anti money laundering laws grew out of anti money laundering laws initially introduced as a weapon in fighting terrorism. While recently practitioners may have been forced to concentrate on much wider crime and reporting regulations, the importance of the anti money laundering regulations in the fight against terrorism remains as important, if not more important than ever.

The law society’s guidelines relating to terrorism can be found at; -

www.lawsociety.org.uk/documents/downloads/dyanamic/practicenoteterrorismact200.df

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26/09/07 FORFEITURES BITE

Recently we reported on the long memory of HM Revenue and Customs in chasing forfeiture orders.

Forfeiture orders are having a very significant effect on the financing of law enforcement agencies but one wonders wether, as yet, the effect of those orders has filtered through to the criminal fraternity. If it hasn’t then it soon will. To give but one example in a recent VAT carousel fraud based upon the trade in mobile phones, one convicted fraudster has been ordered to pay £5.6m in addition to his sentence of 7 years imprisonment. If he fails to make the payment then his term of imprisonment will be increased by a further 7 years.

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25/09/07 SOCA RESULTS

SOCA regularly publishes the results from SARs (suspicious activity reports). Those interested in seeing the reports can visit the soccer website at: -

www.socagov.uk/financialintel/sarcasestudies.html

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24/09/07 UNFORSEEN EFFECT OF TESCO LAW?

The chief executive of the law society of Scotland has stated that he is very concerned at a possible effect of the introduction of the ‘Tesco law’ in England and Wales.

His concern is that the provisions that permit English lawyers to go into business with other professionals or take on private capital or float on the stock, could lead to a Liberian style flag of convenience for law firms. He is concerned that Scottish lawyers will simply migrate south to England.

A more likely effect is that a similar style Tesco law ill be adopted in Scotland.

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21/09/07 HM REVENUE AND CUSTOMS LONG MEMORY.

As long ago as 1996 a man was stopped in Heathrow carrying a sack full of money. The case slowly wound its way through different courts and extradition orders and jurisdictions. However, the matter ultimately was brought back to Uxbridge Magistrates court by HM Revenue and customs and the court ordered forfeiture of £296,016.61 plus accrued interest to be forfeited from the defendant pursuant to the Drug Trafficking Act 1994.

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20/09/07 ANITCIPATED EXPENSE EXCEEDED.

KPMG International has reported that the cost to banks of implementing the anti money laundering regime have increased substantially in the last 3 years. They report that the cost has jumped by 58 percent while predictions were that the cost would rise by only 43%.

The costs of course are not the bank’s costs. They are ours as the banks are certainly not backward in coming forward to pass on any expense that they incur. of Europe’s law in line with our own.

One of the issues that has been decided does however effect UK legal privilege. The law in the UK (extended to accountants) is that information coming into the hands of a solicitor from his client in the course of litigation or when giving advice is privileged. The ruling of the European Court of Justice seems to erode that position in that it states that if money laundering is suspected then the lawyer (accountant) still remains under a duty to report.

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19/09/07 EUROPEANS CATCH UP

The European court of justice has only recently approved in a judgment a law that requires lawyers to report their clients when money laundering is suspected.

It is strange that it has taken the European court so long to approve a law which as been in force in the UK since 2003 and which was introduced in the UK as a result of European union directive.

European lawyers are complaining that the effect if the court decision erodes client privilege. So what’s new!

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18/09/07 SPINNING MONEY

A report recently published says that UK citizens lose more than £160m a year. It is lost apparently in washing machines in cash or in travel cards or other valuables. The report says that 2 million commuters found that their season tickets for trains or buses would not work after they had gone through a washing machine.

The figures apparently come from Halifax Home Insurance, who say that approximately 430,000 households each year lose something or other. £251m worth of mobile phones end up damaged in washing machines as well as £13m of MP3 players.

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17/09/07 MONEY AS A WEAPON

The control of money has long been a weapon in the armament’s toolbox. Financial sanctions ranging from imposing embargoes to freezing bank accounts are just two of the weapons that have been used for hundreds of years. Queen Elizabeth the first in the 16th century embargoed a Spanish Treasure Galleon.

Very occasionally reversing the use of one of these weapons is effective. Recently nuclear disarmament talks between the US and North Korea resumed after $23m in once frozen funds were released.

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14/09/07 NEW VIRUS THREAT

In the constant war between those who create and publish malicious viruses a new level of operations has been reached.

The virus writers have now developed a system of avoidance of anti virus software by either encrypting of zipping their viruses. Of course those who fight the virus writers will soon find a defence but not before many people will unfortunately have been caught.

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13/09/07 NEW SOFTWARE LEADER

A survey has recently been carried out of the top financial institutions in North America, Europe and Asia. The survey has shown that Norkom is the number 1 supplier of both anti money laundering and anti fraud programs for financial institutions.

Software of this type has become a major world industry worth millions if not billions of pounds but one has to wonder at so much effort and brainpower being utilised towards paper shuffling rather than productive industry.

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12/09/07 TEXT YOUR MONEY

Anam, a Dublin based company offers a service which allows a mobile phone user to take a name from his mobile phone book, enter “cash” plus an amount and send. The money is transferred directly from their bank account to the recipients account.

It is thought that the system will be particularly popular with foreign workers sending money home. They no longer will have to visit either banks or money transfer offices. The system clearly is open to abuse by money launderers as the system is totally automatic.

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11/09/07 ATTEMPTED FRAUD

Below is an e-mail recently received by us. It appears clear and reasonable. The link asks for your login details.

Don’t go to the link. It must be a fraud simply because we do not have a Nationwide account!

 

Dear Customer,

You have 1 new secure message
Please login to your online and visit the secure Messages,
section in order to read the message,

To Login, please click the link below:
 

Go to Online Banking

 

Regards
Nationwide Bank, N.A. and its affiliates

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10/09/07 WELCOME BACK

Hello and welcome back to our anti money laundering news service.

Tomorrow we shall resume our daily news service. We hope that you will find the same to be useful and informative.

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04/09/07 DEAD BUT NOT DEAD

The government announced in January of this year that the ARA (assets recovery agency) work would be discontinued and its operations would be taken over by SOCA. World money laundering report online reports however that nothing has been done to change the law to facilitate the ha ndover and the ARA keeps on working. Not only does it keep on working but it has recently won major victories and secured substantial assets. Even more surprising, is that it has secured assets despite the acquittal of the target accused.

One is forced to ask whether the announcement of the dissolution of the ARA was just as another empty Government announcement without substance and follow up? Our feelings are that if the ARA was to be disbanded then the decision to do so had been taken prematurely before the ARA had the opportunity of proving its effectiveness. Perhaps simply permitting it to continue its work has shown its effectiveness and perhaps it will not be disbanded. Who knows?

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16/07/07 SUMMER HOLIDAY

Our news service is now taking it usual summer break and will return September 10th next. Please mark your diary.

Have a good break.

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13/07/07 SLIMMED DOWN MONEY-LAUNDERING RULES APPROVED IN SDWITZERLAND

Switzerland's governing council has approved a slimmed down set of anti-money laundering rules. While widening money laundering regulation to include terrorism, smuggling and piracy as offences, insider trading won't be treated as a predicate offence to money laundering.

These changes have been made following pressure from banking lobby groups requiring changes to the 40 regulations from the FATF.

Additionally reversing the policy recently implemented by the European Union, Switzerland won't require an automatic declaration of the movement of money cross-border. People will be required to provide information about the funds they are carrying, only if they are asked to do so.

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12/07/07 ANOTHER PHISHING ATTEMP

We recently received the e-mail below. It is typical of a fraudsters phishing e-mail trying to get the unwary to give away personal information. BE WARY.

Dear Customer, Our Technical Service department has recently updated our online banking services, and due to this upgrade we sincerely call your attention to follow the below link and reconfirm your online account details. Failure to confirm the online banking details may leads to temporarily suspension from accessing your account online.

At this point the e-mail contained the link – we will not assist the fraudsters by publicising their link.

We use the latest security measures to ensure that your online banking maintaining by our financial institution is well safe and secured according to our banking system Thank you for banking with us. Halifax Online Technical Support Please do not reply to this email address as it is not monitored and we will be unable to respond.For assistance, log in to your Halifax Online Bank account and choose the "Help" link on any page. Halifax plc, Registered in England No. 2367076. Registered Office: Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Services Authority. Represents only the Halifax selling life assurance

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11/07/07 EC AND ID THEFT

The European Commission is currently considering legislation to combat ID theft. Remarkably the EC admitted that it didn’t believe that the new legislation would actually stop ID theft. Realistically no legislation stops crime. At best legislation is a deterrent.

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10/07/07 PLUG IN TO PREVENT CYBER CRIME

A new device has been launched by Yoggie Security System. It comes as a simple plug in key to one of the USB ports. Once plugged in Yoggie claims that your computer is protected by anti virus software, anti spam software and a firewall.

The device sounds great but one wonders how it is kept up to date. Perhaps this information will be available soon.

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06/07/07 PROPERTY BOOM AIDS MONEY LAUNDERERS

We all know that money launderers find it convenient to use property investments for money laundering. Hundreds of thousands of pounds of ill-gotten gains can be invested quickly in one transaction. The boom in property values and the danger in respect of money laundering has been recognised by UK law enforcement authorities who have issued a warning of the increased risk of money laundering.

Three specific indicators of potential crime are considered to be suspicious:-

1. an occasion where a property is resold very quickly

2. where there has been a significant increase in value of property in a short time linked with a quick sale.

3. a situation where an individual client seems to be disposing of a large number of properties at once.

It is recommended that in each of the three cases more detailed client due diligence, including running an electronic check on the identity of the purchaser is recommended.

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05/07/07 SOCA YEAR –REPORT 3

SOCAs first annual report is very revealing on the effect of SARs (Suspicious Activity Reports).

The report shows that one SAR resulted in nine arrests, another linked an individual to a known criminal resulting in convictions for money laundering and confiscation of £250,000.00 and yet another, about a small financial transaction resulted in the arrest of an individual both for money laundering and drug trafficking.

Of course this is only limited success having regard to the amount of work that has been forced upon the regulated sector but that b