Money Laundering News

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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!

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.

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!

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.

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.

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.

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

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?

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

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.

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.

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.

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!

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.

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.

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.

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.

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.

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.

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

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

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.

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.”

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.

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

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.

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

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.

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.

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.

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!

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.

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.

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.

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.

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.

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!

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:

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.

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?

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

Have a good break.

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.

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

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.

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.

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.

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 being said, SOCA must be given time and not be treated in the same way as the ARA.

SOCA, the Series Organised Crime Agency have issued their first annual report. Unsurprisingly it is self congratulatory.

The report states that something like £3.3b out of £5b worth of dirty money, being the total annual profit from crime, is transferred out of the UK each year. The effect, apart from the effect on the rule of law and society generally, is to make crime one of the UKs biggest industries and one which has a negative effect on the balance of payments!

It’s no wonder that the Government wants to have a share. They cannot tax the proceeds of crime but the creation of confiscation procedures now taxes criminals at the hoped for rate of 100%.

The Serious Organised Crime Agency is now little over a year old. It has delivered its first report and has said that in its first year more than 1,700 arrests had been made in Britain and around the world. Further, the report suggests that SOCA had prevented at least 35 murders.

The report was particularly self-congratulatory over the seizure of 73 tonnes of cocaine thought to be worth something more than £3b and which represents something in the order of 20% of Europe’s annual supply of drugs.

WELL DONE SOCA

Yesterday the new Solicitors code of conduct came into force.

The full downloadable code can be found at www.sra.org.uk.

Reuters London has reported that the Serious Organised Crime Agency has created a list with 1,600 names. These are considered the most harmful and dangerous criminals in the country. Having identified these criminals the report, surprisingly, states that they are only concentrating on the top 10%.

Reuters also report that the Home office believes, of course they have no way of obtaining exact figures, that organised criminals launders something like £5.3m a year.

We all know that carrying a sum greater than £1,000 in cash anywhere in the U.K, including the airports, could result in the same being seized and the owner having to show that the money is clean money.

New rules from the European Parliament came into force on the 15th June. After that date anyone travelling through the U.K. from non EU countries will have to declare the cash that they bring into the U.K. if it exceeds 10,000 Euros (roughly £6,800).

“Cash” however is not simply defined as notes and coins, it includes banker’s drafts cheques and travellers cheques and anyone who does not make the declaration or who gives incorrect information could face a fine up to £5,000.

We very rarely report individual criminal cases on the basis that these are more than adequately covered by the press. However the case of Terry Adams raises an interesting point.

We all aware that the Assets Recovery Agency in the past and now SOCA, their placement, have worked very hard to remove the profits of crime from convicted persons. The case of Terry Adams shows another aspect of removal of the financial benefit from crime. Following his plea of guilty to conspiracy to launder his income from crime, not only will a confiscation order be made in due course but he is also being ordered to repay £4 .7m legal aid costs.

Credit Suisse have agreed a settlement in the Enron bankruptcy case. They are paying $65m to the liquidator.

The readiness of Credit Suite to reach a settlement out of Court may well spell good news for the liquidators and ultimately shareholders/debtors as such settlement may be a precursor to similar settlements with other much larger banks.

The UK Anti-money Laundering Regulations stem from regulations passed by the EU. Not wishing to be left out of the Act the UN has now produced its own draft law which undoubtedly will, in due course, filter through into the laws and regulations of member states.

World Money Laundering Report carries a report of the UN draft which, to say the least, is a little acerbic both in relation to the spelling and general wording. They quote for example provision 2.1.2 which apparently contains an option which states, “any payments in currency or by bearing negotiable instruments of a sum greater in the aggregate than [amount to be fixed by the state adopting the law] shall be prohibited.”

If English speaking nations have difficulty with the draft wording, one wonders what marvellous translations may ultimately appear in the legislation of non English speaking countries.

Most banks have reached a decision to fight online banking fraud by giving their customers individual authentication devices. The way these devices work are by asking customers to identify themselves by a means other than password and correct debit card. HSBC have considered this system but have stated that they will not be adopting it as their online losses were minimal.

Those losses may be minimal now but if other banks take additional precautionary measures then fraudsters will probably switch to targeting HSBC customers!

It has been reported that people have been caught up in an internet child abuse enquiry may well have become victims themselves but victims of credit card fraud.

Apparently people looking for child pornography on the internet have been ripped off by fraudsters who do not supply the pornography they apparently were offering, but used information obtained to defraud paedophiles.

Frankly, it could not happen to nicer people! But that being said a plague on all of their houses.

Many readers will be interested to learn that a number of MPs are pressing for change in the copyright laws. Currently it is illegal to download or copy music or movies that individuals have bought for their own use. The MPs are seeking a change that will allow copying to gadgets such as portable music players, so long as such copying was not for public transmission.

Readers are warned to beware of making payments for pc goods from www.instant-av.co.uk. It has been reported that people seeking to make those payments have been contacted and asked whether the person in question has a second credit card on the basis that there is an error on the first credit card details given. When a second credit card details are given that second card has been used fraudulently.

Be very careful as this type of fraud is now being carried through to other retail sites.

Our regular readers will note that sometime ago we published an item concerning electronic money used in the virtual world. News has now broken that a Federal Grand Jury in the United States has indicted two companies for operating a digital currency business used for money laundering.
The world changes.
Fraudsters become more sophisticated and the forces of law and order continually fight to keep up.

World Money Laundering Report Online think that they have spotted an interesting report in what they describe as a typical Labour Party leak. When, some weeks ago our Prime Minister announced his resignation, one of the things that he said was that there, “will be new legislation on seizing the assets of criminals and counter terrorism.

WMLRO have seized on this. Not only do they think that the legislation will be forthcoming but they interpret that to predict that Ed Balls is likely to become the new chancellor of the exchequer. We shall see if they are right.

So far as the new legislation is concerned, this is already on the cards. The Third EU Directive comes in force in December of this year and prior to that the Money Laundering Regulations 2007, a statutory instrument, will come into effect.

Regular readers will know that we do not generally report on individual case as they receive sufficient publicity in the press. However a recent cases worthy of mention just to show the scale of the loss to the public purse cause by carousel frauds.

The case in question was of the biggest ever brought by HM Revenue & Customs. It involved nearly 100 mobile phone traders resulted in two trials with six men convicted of an £85 million VAT fraud being jailed.

Confiscation proceedings will undoubtedly be commenced – see our comment on our news posting of the 4th July!

As our last news posting indicates the amount of malware and spyware affecting the market grows day by day. Not only are legitimate companies fighting hard to combat these pernicious systems but fraudsters, ever open to the main chance, are now setting up bogus firms selling software which is purportedly anti spyware and anti malware. Of course it isn’t.

Purchasers of fraudulent anti-spy and malware of course complain only to find that the bogus company either is not available or if someone is available then they simply answer that the purchasers problem is of a newer spyware programme than their system catches.

As in everything be careful and ensure that you purchase your anti malware and anti spyware from reputable companies.

PC Tools, the security software seller has reported that its malware research centre has seen a significant increase in malware attacks. Malware has evolved to evade security software and can remain dormant on a computer for months before attacking private PCs and revealing much personal information.

The report states that malware attacks rake in as much money for criminals as drug dealing.

Richard Thomas, the Information Commissioner has warned in a report that "we are in danger of sleep walking into a surveillance society."

We are all becoming increasingly accustomed to the fact that we are watched almost from the minute we leave our homes in the morning to the time that we return at night. We can be traced through use of mobile phones, our spending habits are recorded though our credit card expenditure and our credit rating is available to practically anyone.

The Information Commissioner is right to express fears.

Real property, land and buildings, have always been targeted by money launderers as both havens for their ill-gotten gains and also as tools to use in the money laundering process. U K prices have risen so quickly over the last few years that money launderers who have used property as the vehicle for their laundering operations have made an additional capital gain on their assets.

The phenomenon of using real property for money laundering is not merely confined to the United Kingdom. Despite the mortgage collapse in the United States figures released recently show that there are literately hundreds of outstanding cases of mortgage fraud. Spain is just another example where a string of money laundering cases involving property have burst into the headline as the market for holiday homes boom.

The Law Society campaign on the difficulties caused by the proposed money laundering regulations 2007 has successfully resulted in a Government re-think.

http://www.lawsociety.org.uk/newsandevents/news/majorcampaigns/view=newsarticle.law?CAMPAIGNSID=217590

We recently received the e-mail below. On its face it appears reasonable and normal.

Is is a phishing attempt to obtain information from us. The problem for the fraudsters is that to us it is an obvious phishing attempt as we do not have an account with with Chase. But millions do and thousands are caught by scams such as these. Don't you get caught - be careful

We have all suffered an inundation of spam e-mails hawking the sale of all different types of pharmaceuticals, especially, Viagra.

Computer Active magazine has carried a very alarming report. It states that unscrupulous traders are hi-jacking legitimate websites in order to trick innocent customers into buying pharmaceuticals online. Apparently a spam campaign directs users to pages on legitimate websites on which particular pages re-direct visitors to fake online stores. They warn that the danger of this was highlighted by Canadian authorities following the death of a 57 year old woman who had purchased pills from an online source. The pills in question contained toxins such as uranium, aluminium and arsenic.

The old children’s rhyme “liar liar” which indicate that a liar will be spotted and revealed is coming to Job Centres across the country. Tests of Voice Risk Analysis, lie detector software have proved very successful in Harrow, North London.

The results of lie detector tests cannot be used as reliable evidence in a prosecution but act as warnings to Social Security staff that individuals may not be telling the truth and put them on notice therefore to deepen their enquiries.

The EU has issued a further Directive concerning Data Protection.

Under the Directive companies will have to inform their customers of any security breach relating to customers personal data such as name, address and credit card number. The range of directives is wide enough to cover the activities of hackers on the one side to the simple theft of a personal computer on the other.

Currently under UK law companies do not have to tell customers about data loss or theft leaving those customers exposed. In future when the Directive comes into force customers will be warned and it will be up to those customers to decide whether they wish to take any steps to protect themselves.

The term money laundering was coined in pre prohibition area America. The numbers racket was an illegal lottery played by poor people gambling nickels and dimes. The gangster operators of the lottery needed to find a legitimate excuse to walk cartloads of coins into their banks so they bought laundrettes and so had a legitimate excuse for having large volumes of coins. Hence the name, ‘money laundering.’

Recently ECHO online reported that Essex Police had raided 31 nail bars in their county. Apparently the takings of the nail bars were being bolstered by filtering the proceeds of crime and laundered through their business.

Will money laundering be re-named money nailing?

The UK will shortly hold the presidency of the Financial Action Task Force (FATF) for 12 months and James Sassoon has been appointed as president.

The FATF was established by the G7 nations in 1989 and sets the global standard for combating money laundering and terrorism.

The UK has probably the most stringent anti money laundering laws and regulations of not only the G7 countries but most of the world and one wonders whether Mr Sassoon will be pressing other nations to come up to our rigorous standards and if so whether there will be a worldwide strengthening.

The man in the street when asked about counterfeiters thinks immediately of counterfeit money. However the amount of counterfeit money in circulation is tiny when compared to the number of counterfeit goods, especially fashion items and copies of films and music.

On 6th April 2007 local Trading Standard Officers were given new weapons to fight counterfeiting. The Copyright Designs and Patterns Act makes infringement of copyright the responsibility of Trading Standard Officers and gives them the power to make test purchases and to enter premises to inspect and seize goods and documents. The government thinks that the problem is so serious that not only have they given Trading Standard Officers the additional power but they have backed it with a grant of £5,000,000.00 to Trading Standard Authorities around the country. One of course must question whether £5,000,000.00 will go very far.

Some six years ago a man was convicted for V.A.T. offences and a year later a Confiscation Order for £30,000.00 was made against him. The defendant claimed that his assets were less than £5,000.00 as he had lost the proceeds of his V.A.T. fraud through gambling.

Subsequent enquiries revealed that there were other assets which pre existed the Confiscation Order to the value of £160,000.00 but as the Order was under the Criminal Justice Act there was no opportunity to re-visit the Order.

Not to be outdone the police have arrested the man for perjury!

The reverse charge accounting system applied to mobile phones and computer chips from the 1st June is only one of the measures that has been taken to combat Missing Trader Fraud.

In the last year or so H M Revenue & Customs have concentrated efforts upon Confiscation Orders on those convicted of the V.A.T. fraud. It is now reported that the level of the trading associated with the attempted fraud has fallen significantly in recent months as a result of the efforts of H M Revenue & Customs and it is hoped that the new reverse charge measures will assist further.

The effects of Missing Trader Fraud must not be under estimated. This inter community (traders in the EC) fraud has costs governments hundreds of millions of pounds.

Our regular readers will know that we have, over years, reported on the massive losses to the Revenue resulting from Missing Trader Frauds. Quite simply a trader imports high value goods free of V.A.T. from Europe, sells at a price inclusive of V.A.T. and then disappears. Losses have been calculated to be in the hundreds of millions of pounds.

The initial steps to make it harder for criminals to get away with this V.A.T. fraud will come into force on the 1st June next. The V.A.T. accounting system will be reversed. The VAT on mobile phones and computer chips (most commonly used for these frauds) will have to be paid in advance by importers.

Requiring payment in advance is a clear solution to the problem but so far this is limited only to mobile phones and computer chips and there are other high value goods that are imported which are just as easily carried in bulk to which, no doubt, fraudsters will turn.

The government has set up two experimental teams to target loan sharks. The two terms are in Birmingham and Glasgow and early reports are that they have saved the sharks’ victims more than £3,000,000.00 and are reported to have identified over 200 illegal lenders.

The success of the scheme is likely to result in further teams being appointed across the country.

The Law Society has issued new money laundering guidance for company and commercial solicitors. The guidance can be found on the Law Society website. It clarifies an aspect of legal professional privilege arising out of Bowman v Fels, and will be of interest to all MLROs.

The Law Society is planning a complete revision of its money laundering guidance at the end of the summer, to incorporate the 2007 regulations but our practice talk on the subect on audio CD is currently available.

The Law Society has published the second edition of Solicitors and Money Laundering.

Their website states, "This fully revised and updated new edition of the best-selling guide to money laundering compliance takes into account important recent developments in legislation and case law."

More details can be found on the Law Society Website by following this link - http://www.emailhosts.com/ct/ctcount.php?key=006435330076973900010319

The Law Society has reported that Conveyance Link have conducted a survey of 400 firms. The firms were asked to guess which items used for identification of clients were forgeries. The results are depressing but certainly should not be unexpected. Apparently 71% of the firms were unable to correctly guess which items were forgeries.

Lawyers spend many years learning law and procedure. We are not expected to be experts at recognising forgeries. All that we can do is take reasonable measures but it should be remembered that those measures are on an objective rather than a subjective test.

M-PESA, we take odds on the fact that you have never heard of it. If you haven’t then you will hear of it or one of its sisters very soon.

M-PESA is a free account that is offered by Safaricom Kenya who are leading mobile phone service operators. Its operators consider it to be a technological break through. M-PESA offers subscribers the ability to send large volumes of money in an instant transaction via the mobile phone. The service which is being rolled out to most major towns in Kenya costs as little as one dollar to send or receive money.

The system clearly has enormous benefits and those benefits are unlikely to be overlooked by money launderers!

SOCA has given a warning to the British Beer & Pub Association that pubs are being targeted by criminals for money laundering. In the simplest of terms criminals have recognised that pubs are businesses with a very high cash turnover. The apparent criminal intention is to inflate the earnings of pub businesses by filtering dirty money into the business returns.

Inflated profit of pubs will, of course, then be subject to taxation but the criminals regard the costs of taxation as a costs of safely cleaning their money. Who, after all, would query a declaration of a large profit in order to pay tax thereon.

Sir Stephen Lander the chairman of the Serious and Organised Crime Agency (SOCA) in an interview with the FT has said that the number of suspicious transactions reports for the financial sector has increased to 213,000 reports last year from 195,000 in the previous year.

While Sir Stephen may be happy with the overall reporting it is a fact of life that the Agency cannot properly investigate so many reports. This problem has been recognised by the EU in its third Directive. The new regulations which will come into force in December of this year are intended to create a sea change in the type of reporting so that persons working in the regulated sector will no longer, for their own protection, report their slightest suspicion. The intention is that they will adopt a risk based approach and thereby limit the number of reports so that a smaller number but higher quality of reports will reach SOCA.

We are far from certain that the number of reports, especially from cautious lawyers, will fall. Defensive reporting for self protection clearly will continue.

Our regular readers will of course know that the ARA has been disbanded and its powers passed to other authorities before, in our view, it had been given a proper chance to reveal its value. Customs & Excise have gone the same way subsumed into the new H M Revenue & Customs service.

It is ironic that the disappearance of the independent Customs Service Drug Enforcement powers have now been taken over by SOCA at a time when its drug seizures and clear up rate is at an all time high.

Unfortunately one is forced to wonder whether the increase in seizures and clear up rate is due to an increase in efficiency or whether it is merely proportionate to an overall increase in drug trading.

World Money Laundering Report Online has carried a story concerning gang warfare in London’s China Town.

While newspapers have been full of stories of rampaging gangs of teenagers and murders committed by them with knives, World Money Laundering Report have reported that there is a change in the landscape of crime in London heralded by the arrival of a Chinese gang know as Snakeheads. This gang apparently is seeking to take over territory which has for sometime been the province of established Chinese Triads. The cold blooded shooting of a man in a bar in China Town possibly heralds the first shot in major gangland war and a considerable escalation in armament.

The Police and other Law enforcement agencies have published what has been jokingly been described as a money launderers manual. It consists of a number of case studies which are based on the facts of various investigations. The case studies highlights some of the methods used by criminals and areas of crime in which they operate.

See http://www.lawsociety.org.uk/newsandevents/news/view=newsarticle.law?NEWSID=328617

Those thinking that they can use the case studies as a manual for money laundering should never forget that the case studies as based on successful prosecutions.

A recent survey of 2,441 adults reveals ththat the majority did not feel that it was their responsibility to deal with their own online protection.

No wonder E fraud is constantly on the increase.

The Symantec report that we mentioned in our last news posting states that nearly half of the worlds spam e-mail comes from the United States. It said that e-mail continues to grow because spammers are using what is called imaged based spam i.e. sending words as images rather than as text so as to avoid detection.

Anti spam devices proliferate but are always one step behind the spammers.

Users of Skype need to be very careful about a new Trojan. It is a variant of the warezov/stration virus.

Skype users may receive a message from an existing contact giving them the address of a website that is recommended. The website contains an invitation to download and install a file and it is this file that is the problem. The virus makes contact with the original hacker and tells the hacker that the computer is infected. The Trojan then uses the skype users contact list to forward similar message to everyone on that contact list. We leave to your imagination what the hacker will do once he knows that a computer is infected with his virus.

Symantec Internet Security have issued a warning of a change in hackers modus operandi.

In the past they would use their skills either for their own amusement or for malicious intent and they would sell their expertise. A new trend has arisen. Hackers are now forming gangs and assisting each other in producing ever more virulant, intrusive and aggressive malware.

The Royal Academy of Engineering has issued report on privacy and surveillance. The report details an increasingly frightening position of how technologies could be abused in the future.

While the report says that advances have a potential to do a great deal of good they also carry the risk of doing damage if they are introduced without proper care and fore thought. It quotes as an example that proposed bi-metric data such as fingerprints and ID cards could be used to trigger bombs in specific vicinities.

Amsterdam’s notorious red light district has operated legally for years. Everyone knows of marijuana cafes and of legal brothels with ladies advertising their wares by sitting in shop windows.

The number of shop windows advertising this legal trade however have declined significantly over the last few months as a result of money laundering legislation. To combat the decline recently Amsterdam has staged an open day which was notable for elderly matrons inspecting the suspected haunts of their husbands.

In previous news post we have explained the pump and dump phenomena. Quite simply hundreds of thousands of e-mails are sent out pumping a share, frequently the share price rises and those behind the pumping quickly cash in leaving the unfortunate but naïve share purchasers with a loss.

The USA’s securities and exchange commission has taken action to try to stop this process. Unfortunately the action is in respect of only 35 named shares and even if delayed, something is better than nothing. In the UK nothing has been done. Shares in the 35 companies against whom action is being taken have had trade in their shares suspended but this doesn’t help those who have lost.

The government has followed its normal practice of a consultation process prior to making regulations. The 3rd EU Money Laundering Directive has to be in force by December of this year, to enable it to comply with the third European money laundering directive. The problem is that the draft regulations as proposed, following consultation, require that client due diligence is carried out not only on a client but also on what might be called ‘the real beneficial owner’ and that can be extremely difficult when dealing with a trust.

The Law Society and several major city firms have issued a warning that private equity funds could be driven out of the UK if the draft regulations are adopted.

A government spokesman recently when interviewed on Radio 4’s a.m. programme noted with pride how the recommendations and objections of lawyers had been disregarded in many recent legal reforms.

As lawyers we consider that the spokesman should hang his head in shame rather than be proud of ignoring lawyers usually pragmatic and sensible approach and protection of public freedoms.

It has recently become public knowledge that the police will not investigate an internet fraud where the amount of loss is less than £1,000.

We can well understand that police resources are such that they have to prioritise and in doing so would prioritise larger rather than smaller frauds. However, making public the fact that they do not investigate frauds of less value than £1,000 is an open invitation to fraudsters to limit individual frauds and thereby achieve virtual immunity.

Surely a better practice would be to investigate and prosecute some small frauds and ensure that prosecutions achieve publicity. This at lease would act as a deterrent to some fraudsters.

http://www.lawsociety.org.uk/newsandevents/news/view=newsarticle.law?NEWSID=327160

The FBI has reported that statistically men aged 30 to 45 are the most gullible when it comes to falling for internet frauds. They report that Nigerian scams net vast profits from idiots!

From 1 January to 31 December, 2006, there were 207,492 complaints which included many different types of fraud including auction fraud, non-delivery, and credit/debit card fraud. The total US dollar loss was USD198.44 million averaging USD724 per complaint.

Although disbanded the ARA seems to be continuing with its efforts. On the 7th March alone it announced that it had obtained two property Freezing Orders, the first was for £74,985 over money alleged to be the proceeds of a robbery and the second for £25,890 in respect of alleged money laundering activities.

We commented in an earlier posting to this website that in our view the ARA had not been given sufficient time for the full effect of its efforts to become clear. Let us hope that the new Treasury controlled department will be given appropriate time for its effectiveness to be seen.

SOCA has issued a threat assessment for 2007. It identifies the following as the major areas of risk:

1. Cash transactions are still a common means of dealing with the proceeds of crime as there is no audit trail.
2. Money transmission agents and alternative remittance systems are seen as easier methods for transferring funds around the UK and overseas.
3. Investment in private and commercial property, often not in the criminal's name, as well as some investment in shares, trusts and pensions, is seen as a way to integrate the proceeds of crime into the legitimate financial market.
4. Businesses and companies with a high cash turnover are often used to conceal criminal proceeds.

At a recent meeting with the President of the Law Society, a delegation from a number of major city firms raised the following concerns of the proposed changes to anti money laundering regulations:

The requirement to conduct identification checks on existing clients.
The difficulties for firms in establishing whether their client is a PEP.
Requirements to identify beneficial owners affect collective investment schemes like private equity trusts, potentially driving investors out of the UK to markets where such reporting obligations don't exist.

Our news site is taking an Easter break.

Please rejoin us on Monday, 16th April.

Have a good break

In our computer age many firms use more than one means of communication. One of the systems that we use is Skype. We received the following message purporting to come from Skype.

ATTENTION ! Security Center has detected spyware on your computer !

Affected Software:

Microsoft Windows NT Workstation

Microsoft Windows NT Server 4.0

Microsoft Windows 2000

Microsoft Windows XP

Microsoft Windows Win98

Microsoft Windows Server 2003

Your system IS affected, purchase repair utility from the address below !

Failure to do so may result in severe computer malfunction !

We are told that this e-mail did not emanate from Skype and is a scam to get you to buy their software. We will not repeat the sales address they show.

Next July Britain will take over the presidency of the Financial Action Task Force (FATF). The measures that were reported on yesterday are merely part of new efforts being put into anti money laundering although one must wonder why regulation is being heaped upon regulation even before the consultancy exercise that we reported a few weeks ago concerning the third EU directive has been completed.

A new strategy has been agreed between the Treasury and the Home Office but one is forced to wonder whether the continued bombardment of regulation is just another facet of government constantly announcing different schemes and policies involving every one in more and more red tape.

Let us all hope that the new measure not only work but, unlike the now defunct ARA are given sufficient time to work.

It is of course now well known that the ARA (Asset Recovery Agency) has been disbanded. It appears to have been replaced by a new “Asset Freezing” unit which is to be run by the Treasury. The aim is to target criminal’s and terrorist’s accounts and is part of measures aimed at seizing the assets of money launderers.

Additionally as part of the same revised anti money laundering system there is to be a licensed system for money services businesses such as money transfer services, and a requirement placed upon law enforcement agencies to use information held at Companies House.

One wonders why they need such a requirement as surely they would have been using that information previously!

The makers of illegal copies of films, music and games are the subject of new legislation. Not only will the criminal proceeds of their activities be targeted by anti money laundering legislation and confiscation orders but, as from the 6th April next new powers under the Copyright, Designs and Pattents Act will come into force.

The authorities charged with operating the procedures will receive £5million of new funding. Trading Standards officers will have a new and hopefully well funded weapon at their disposal.

A boiler room scam is one where tens of thousands of emails are sent ramping a particular share. The shares are normally worthless and sold on unauthorised exchanges at inflated prices or alternatively are of relatively small companies where quite a small volume of purchases will make the price rise. The scammers closely monitor the price and sell at inflated prices into the demand that they have created. The sale forces a price drop and the victims lose.

The FSA is well aware of the scam and has obtained interim injunctions against companies in England and Gibraltar and against an individual because it believes that they have been party to boiler room activities in the UK.

Lets hope that the FSA’s action will have some effect but possibly the best self-protection is a good spam blocker plus the delete button on your computer!

Our readers will know that over the last two or three years we have published a number of articles on Carousel Fraud i.e. a fraud carried out taking advantage of payment of VAT exemptions across European frontiers.

Certain measures have been undertaken so far to try to limit the fraud but these have been limited and at a recent meeting of European law enforcement and tax authorities they issued a pledge for greater cooperation and they apparently agreed practical ways to jointly fight this system of fraud that costs VAT authorities not tens of millions but hundreds of millions of pounds.

Agreements were reached that member states would exchange information better and faster, develop a common approach to civil interventions under EU VAT law and Europol is to develop a fraud threat assessment to support prioritisation and targeting of criminal interventions.

An impact assessment on the second money laundering directive has been published. Its main conclusions are that overall it is difficult to assess the effectiveness of the implementation because of the slow implementation of the directive across the EU!

It reports that future efforts should concentrate upon improving the quality of national legislation, increasing outreach and awareness efforts and exploring whether there are additional tools that can be used to assist compliance.

It is hoped that the implementation of the third directive, which it considers permits a greater flexibility, should assist members to adjust their obligations to target the real risks imposed by money laundering within their jurisdiction.

Readers will recall that we, over two weeks published our views of the effect of the third European Directive but each reader must draw his own conclusion as to whether the implementation of the third Directive will in reality assist in the full implementation of the intentions of the second Directive.

In this matter the Court of Appeal was asked to consider a possible inconsistency in the law.

The man in question was charged with a substantive offence and acquitted although he was convicted of a money laundering offence relating to the money from that substantive offence.

The Court of Appeal held that the suggested inconsistency between the two verdicts at the two separate trials was not of itself reason to hold the appellants conviction unsafe.

Those wishing to learn more about the case may see the law report at [2006] EWCA Crim3122

An authoritative report says that the virtual financial world has become very popular and by means which we frankly cannot understand, using games such as “second life” and “Entropia universe” these virtual world games can and do contain all sorts of businesses and the virtual world money (called PEDs) used in the games can be converted into real money and back again using an online payment system. The report says that one American businessman paid $100,000 for virtual space in Entropia which he planned to convert into a nightclub.

The report warns governments over possible money laundering through the media but we have to admit that all of this is beyond us!

Readers should be aware that the above Act came into force on 15th January last. It extends the law so that its provisions include fraud by failing to disclose information and the possession of articles for use in frauds. ‘Article’ consists of “any programme or data held in electronic form.”

It is not for this news site to publish the new Act but readers should be aware that such an act has come into force.

The Swiss authorities have opened a public debate on various money laundering measures. The Swiss authorities are under pressure from its banking sector over the implementation of the FATF (Financial Action Task Force) 40 regulations. In particular they are querying the extension of regulations to include fine art dealers, jewellers and other vendors of expensive goods where hefty cash payments are common. Additionally they are debating the question over asking persons carrying more than approximately £10,000 in cash across Swiss boarders where that money came from.

The Swiss are debating the implementation of measures that have been implemented in England for a long time. Large cash transactions can only be undertaken in England by persons who have specifically registered to accept them and so far as carrying cash is concerned, it is not merely a question of £10,000 at a border, the level is £1000 within the UK and more than that if more than £1000 is carried in cash in the streets in the UK it can be seized and its origins demanded.

We are certain that every one of our readers will know that the ARA has been dissolved.

A report by an MP published last year may have contributed to its downfall. The reports show that the Assets Recovery Agency only recovered £8m since it was launched in 2003 but cost more than £60m to set up.

In our view the report was totally unfair and the Assets Recovery Agency was not given a proper opportunity to show its worth. Anyone involved in litigation will know that a two year period from inception, in a timescale of heavily fought litigation, is far too short a period over which to judge results. It would have been fairer to say that over the same period £100million of assets had been frozen.

Given sufficient time we believe that the ARA would have shown its true value and if a mistake was made then the mistake was that the model it was based upon had not properly anticipated delays in litigation and the fact that cases won or lost would be subject to appeal and that those against recovery orders were sought would fight tooth and nail. The cost of litigation could be born from frozen assets so what did the potential loser have to lose by fighting!

One hears, all too often, of muggers forcing their victims to cash points and making their victims withdraw cash.

There recently has been a host of emails telling prospective victims that if they insert their pin numbers backwards then the cash machine automatically sends an alarm to the police.

Don’t be fooled. It’s not true.

No alarm is sent and the muggers may simply get a little more vicious thinking that their victim is trying to fool them. We do not see the point of spammers sending out this false information. It is malicious, it does not help anyone, and potentially makes a serious situation worse!

Microsoft’s new vista operating system has reportedly been the subject of a new spam campaign. Emails are being received, across the world, offering the new operating system at a saving of $319 (roughly £162).

This is a simple con, you pay your money and get NOTHING. Don’t be simple enough to be caught by it.

The Red Light District of Amsterdam is famous for young ‘ladies’ advertising their services by sitting in shop windows. In a crack down on money laundering and organised crime, the Amsterdam City Council has refused to renew licences for 33 such establishments.

Who knew that money laundering legislation would have so wide an effect?

Dear Readers

We hope that we have not bored you by harping on about the new regulations over the last two weeks. Obviously there is considerable concern but it is anticipated that over the next few weeks the position will clarify.

Many of you use our CD lectures and web based staff training system to keep up to date with developments in the law. We hope that by early next month we shall have completed our re-writes of both our lectures and web training system now used by approximately 10% of law firms in the UK.

Keep watching this site for updates.

Many thanks,

Michael Kaye

The anti-money laundering section of the Law Society web site caries the following:

"It is unacceptable for the government to pass the responsibility of interpreting the incomprehensible language of this directive to solicitors, who face possible imprisonment if they get it wrong."

If implemented, the government's draft money laundering regulations could impose significant extra costs on solicitors for compliance, reduce the competitiveness of UK firms due to gold-plating of the EU directive, and put even conscientious solicitors at risk of conviction and imprisonment.

The relevant section can be found at New Page 1

In total contrast to the attitude of the ICAEW to the proposed new money laundering regulations, the Law Society has stated that key points of the government’s draft regulations are “so unclear that it will be impossible for practitioners to implement them in practice.”

The above warning was contained in a letter written by the Law Society to the Treasury and it called for an early meeting between the Law Society and Treasury officials.

Two particular areas of concern were highlighted by the Law Society, the first concerns the beneficial ownership of trusts and the second is the failure of the proposed regulations to accept article 15 of the third European directive which would allow UK firms to rely on identity checks carried out by a third party in member stakes.

There can be no doubt that over the next few weeks and months the controversy over the implementation of the third European directive will grow.

It is often said that lawyers and accountants speak entirely different languages and are often totally unable to understand each other. Tomorrow we shall report on the reaction of the Law Society to the regulations but today we mention the attitude of the ICAEW (The Institute of Chartered Accountants in England and Wales). They have welcomed what they consider to be the release of the new regulations on a timely basis which allows a round of consultation before the new regulations are due to come in force. A representative is quoted as saying: -

“we are pleased to see the clarification of professional bodies who are supervisory authorities under the regulations will be able to regulate their member firms (in respect of AML activities) for all their activities coming within the scope of the regulations.

The ICAEW appears to have looked at the regulations from their own point of view. Contrast the position of the Law Society which we shall report on tomorrow.

Over the last few days we have listed in general form only, a number of the proposals for the new regulations upon which the government is consulting and which need to be in place pursuant to the third European directive, by December of this year. Each of the examples that we have given show increased checks or stricter tests while the economic secretary, Ed Balls appears to wish to pass these off as something which will lower the administrative burden.

Perhaps an announcement that the regulations will reduce regulatory burdens in low-risk areas for example by firms being able to make fewer checks in “low-risk situations” such as in employer led pension funds and child trust fund administration, will reduce the burden overall. Who knows, overall the burden may be decreased as Mr. Balls says.

The key to recent changes has been to turn the steps that are taken in anti-money laundering situations from a strict and regimented system to a risk based system. It would follow therefore that those working in low-risk areas would not find the existing regulations to be overly burdensome while, those working in high-risk areas equally should not find the tasks that they would have to undertake to be overly burdensome as, for their own protection, they would already have to put in place measures to ensure that they were not dealing with ‘dirty money.’

One is forced to ask whether measures such as those proposed are necessary and, most importantly, whether, as is the instance concerning casinos, whether the regime to be imposed in the UK should be stricter than accepted international standards.

The proposals for new regulations include what is said to be a strengthened and risk based regime in casinos in line with, but stricter than, international standards.

One is forced to ask why the tests should be stricter than international standard.

The regulations include proposals for extra checks on customers that firms identify as posing a high risk of money laundering.

We can only ask what these extra tests can be and why thy are needed. Surely it goes without saying that a company in the regulated sector when dealing with a high risk individual or company, of necessity, will of its own volition make extra tests and take extra precautions. Why is legislation necessary?

The new regulations include strict tests designed to ensure that people running money service businesses and those who help set up trusts in companies are fit and proper.

Once again we do not see how this will lower the burden and one is forced to wonder why the tests that are applicable currently are not sufficient.

The proposal put forward for the new regulations include:-

“Extended supervision so that all businesses in the regulated sector comply with money laundering requirements, including estate agents, trust and company service providers and unsecured lenders”

The key to this proposal is to consider what will be the extended supervision. We do not see how extended supervision can be said, following the treasury secretary’s quote, that our businesses will face fewer burdens than previously.

On the 22nd January last treasury minister Ed Balls published draft money laundering regulations to bring the UK system in line with the third European directive. Over the next few days we shall highlight a number of the proposals which were published as part of a consultation process and which, many of you will have noted, are causing something of a furore within the regulated sector and especially on the part of lawyers.

When publishing the proposed new regulations Mr Balls said: - “These regulations will strengthen further the UK’s defences against money laundering and terrorist finance. By taking tough and targeted new measures where the risks are greatest we will crack down further on illegal activity and help force criminals and would be terrorists out of the shadows. At the same time our regulations will ensure that businesses and consumers in those risk situations face fewer burdens than previously”.

Over the next two weeks we will highlight some of the proposals and it will be a matter for you to consider whether you agree that the proposals will place ‘fewer burdens than previously' upon you and your business.

A report issued by the City of London has found confusing European money laundering rules across Europe which are producing "bizarre" results. Those reporting are concerned that the vaguely worded second money-laundering directive has produced a "black hole" that could allow some suspicious transactions to pass unchecked.

If this is not bad enough please wait and see the series that we will be starting next week on the third money-laundering directive.

Some European authorities are being overwhelmed by the volume of reports of perfectly legitimate transactions. Michael Snyder, the City's policy chief, is reported to have said that the European rules were not up to the job of preventing real money laundering from serious crimes and he illustrated the consequences of badly drafted directives. He said:

"The EU needs to tackle money laundering in an effective and uniform manner. Yet this report shows how compliance with the second money- laundering directive varies widely not only between member states but also across business sectors within member states."

Some weeks ago Lord Stevens delivered the findings of his eight-month bungs investigation and League managers may feel they can finally breathe easy as the findings state that the phase of the inquiry involving them was at an end.

But all may not be so clear as a former police detective give a clue that the enquiry had not fully absolved them. While he stated that he was unable to reveal the identity of the authorities who would now be handed evidence of the remaining suspect deals, is reported as having said that he was sure that people were are aware of the dangers involved in tipping off.

To those knowledgeable about money laundering offences he was ‘tipping off.’

Real Money Transaction or Real-Money Trading (RMT)- is the basis of the online gaming world, and by virtue of its importance has become a target for authors of Trojan spyware.

Players on line use RMT for online games and trade currencies, items, accessories, and other in-game paraphernalia for real money.

It has been reported that the value of one unit of the currency of a country in the online game Everquest is worth more than one Japanese Yen. In 2005, gameusd.com, a game currency price research site, placed the value of one World of Warcraft gold unit at US$0.60. These trades being legal cross internation boundaries and there is strong suspicion that they are being used as a conduit for ‘dirty’ money.’

The FSA has developed a self assessment tool – we can realistically do not better than to quote directly from their website:

To help small financial adviser firms adopt appropriate practices to mitigate money laundering and terrorist financing risks we have developed a set of questions about management responsibilities, reports, a risk-based approach, training, suspicious activities and identifying customers. The anti-money laundering self assessment tool is not a checklist and is neither exhaustive nor prescriptive. It is designed to prompt smaller firms on some of the areas on which they should focus to be satisfied that they are addressing their legal and regulatory obligations to combat financial crime.

The tool can be found at:

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Regulators in Gibraltar are concerned about the activities of a company named ‘Gibraltar Insurance Company.’

The website operated by Transpacific Insurance Corporation claims to be “a leading e commerce facility selling online shipping, maritime, transport and logistical insurance to and from any where in the world.”

The Gibraltar regulators have stated that Transpacific Insurance Corporation is not authorised to carry on insurance business in Gibraltar. They note that they are unable to confirm whether the company is authorised in any other country and they urge the public to exercise appropriate caution.

WHAT IS MONEY LAUNDERING This may seem an obvious question but there are numerous definitions which differ considerably, for example the difference between the interpretation of Interpol and the EEC.

See http://blogcritics.org/archives/2006/12/09/145401.php a website which is intended for office staff who might find the explanation to be helpful.

The Cabinet Office has issued a report entitled “Regulatory Justice for: Making Sanctions Effective.” The report found that criminal prosecutions alone did not give regulators the means to deal with a high number of cases in a proportionate and risk based way. It also found that prosecutions may well be a disproportionate response for regulatory non-compliance and as a result that penalties imposed have failed to act as a sufficient deterrent.

Having found elements of the way in which the current system is not working properly it goes on to make recommendations which include piloting schemes that give a greater degree of flexibility and administrative monetary sanctions.

The Serious Organised Crime and Police Act 2005 created new mechanisms which can be used in anti money laundering investigations by the police.

The Law Society website report that SOCA (The Serious Organised Crime Agency) has recently obtained the first ever Financial Reporting Order against an individual. The Order was granted under Section 76 of the Act.

The fraudster is now under a Reporting Order. He is required to file sworn periodic reports with SOCA in which he sets out all of his financial affairs and business dealings. The report has to be substantiated by corroborating evidence and each breach will result in an increase of up to 51 weeks in the fraudsters sentence.

Yesterday we reported on how home PCs are being hi-jacked to send out spam. Recently the Times Newspaper carried a report that a British internet company was being used by one of the world’s most prolific spammers. They reported that the volume of unsolicited e-mail messages had increased by 300% during July to October last year. The Times report also picked up on the hi-jacking of home PCs and reported that spamming gangs have taken control of up to 1 in 12 home PCs. The answer. Switch your computer off when you are not using it!

We all suffer from spam. Even the best spam blockers do not prevent every spam e-mail from reaching us, annoying us and wasting our time.

One is forced to wonder why it is so hard to trace the computers of origin of the spam and to block them. It had been thought that the reason for this was that millions of e-mails can be sent in a very short time from a single computer and the spammers simply move around. That may be part of the answer but it has been found that many people simply leave their computers on all of the time. Spammers access those computers and use them to forward their unwanted mail. You may not realise it but your home computer may be the source of thousands of e-mails sent down your broadband link possibly while you are asleep.

All fraudsters are criminals and phishers are criminals of the lowest kind in effect picking the pocket of every one that they can from the wealthiest to the most in need. However a recent phishing method has come to light which must lower them even deeper in the eyes of right thinking people than the depths to which they have plunged so far. Phishers have created a website purporting to help under privileged and ill children. It seeks donations. It gathers money thereby and obtains credit card details. It goes without saying that the under privileged children receive nothing, all goes into the pocket of the phishers.

These phishers cause a double degree of damage and injury. Not only are they thieves but they will make charitable people even more careful about making charitable gifts in the future. Let us hope that they are caught soon.

Reports indicate that more than seven million British adults have fallen victim to credit card fraud. Indeed the overwhelming likelihood is that if you have not been a subject of a credit card fraud then you certainly will know somebody who has. Research has shown that the UK is the credit card fraud capital of Europe and that the risk of being the subject of a fraud for a UK citizen is double the risk of any other European country.

The problem is that even the most vigilant of us can be tricked by such devices as hidden cameras in cash card machines. We must be vigilant the whole time but that vigilance unfortunately does not guarantee safety.

The Proceeds of Crime Act has been heavily criticised because of its lack of a di minimus rule. Within the UK any amount of dirty money, no matter how small, falls within the primary money laundering offences. The law in the UK is more stringent than that recommended in the EU which only regard, for money laundering purposes, money that becomes dirty as result of an offence which is punishable with more than 12 months imprisonment.

The UK Proceeds of Crime Act has not been amended despite pressure for the introduction of a di minimus rule. However the police when asked confirmed that they are not interested in minor offences simply because they lack the resources to investigate. The best advice however continues that you must be vigilant in all circumstances as the law is unchanged.

A number of amendments were introduced by the Serious Organised Crime Police Act 2005.

The primary money laundering offences are in sections 327, 328 and 329 of POCA. The first amendment is that an offence under those sections will not be committed if a person can prove that the conduct which makes the money ‘dirty’ was not conduct which would have been illegal in the country of origin. Accordingly under the old law the legitimate income of a bullfighter in Spain would have been considered dirty money within the UK as bullfighting is illegal in the UK. Since the amendment, notwithstanding the fact that bullfighting remains illegal in the UK, as the money was earned legitimately in a foreign country then if brought into the UK that money will not be regarded as dirty money for the purposes of the primary money laundering offences.

It is well known that there are so many CCTV cameras in the UK that it is possible to track us almost from the moment that we leave our house in the morning until we return at night. If that is considered bad enough a report by the Information Commissioner entitled “A Surveillance Society” has stated that the British public could be fitted with computerised ID tags within ten years. These tags effectively could show where we are every minute of the day every day of the year.

Tagging prisoners will no longer be necessary we will all be similarly tagged! Will we be joining dogs who have their passport chip inserted under their skin?

It appears that no matter how much publicity is given to the activities of phishers, they continue to catch the unwary. It has been reported that online banking fraud rose by more than 55% last year. This means that online banking losses rose from £14.5m in the first six months of 2005 to £22.5m in the same period of last year.

We are certain that all of our readers will be pleased to know that new laws have been incorporated into the Uk’s Computer Misuse Act 1990. There is now a new offence which has been named “Denial of Service” (DoS). A virus attacking the UK now renders the guilty party liable to a term of imprisonment of up to 10 years. There are other charges with equally very tough penalties for what are termed, “unauthorised act with intent to impair operation of a computer.”

The problem facing everyone is that it is all very well for the UK to toughen its measures against computer attack but, the global nature of the internet must be recognised and similar measures must be enforced around the world to make these laws truly effective.

The Information Commissioner Richard Thomas has recently warned that a huge undercover market exist for illegally obtained data concerning finances of UK individuals. He gave the warning following the conviction of a couple who were making a £140,000 a year selling private financial information which they obtained under false pretences. It appears that in that case bogus telephone calls were made to organisations and as a result information was obtained which was then sold. This type of scam is known as blagging, an off line version of phishing. The Information Commissioner has warned that the practise for selling information gleaned in this way is huge.

Directors of companies are warned to keep an eye on documents filed at Companies Registry in respect of their own companies.

Companies Registry accepts returns on printed sheets. A report entitled “keeping the record straight” published by software company Digita has revealed that the acceptance by Companies Registry of paper returns is in fact a loophole enabling fraudsters to steal IDs. Quite simply fraudsters will target a company. A company search of that company will reveal director shareholders etc. It is then quite simple for them to file a printed paper return showing another individual (one of the gang) as an additional director. The company that such a return has been filed and would not know that the fraudster is holding himself out as a director of the company. The fraudster will be able to rely upon any company search carried out enabling the enabling him to obtain goods on credit or even to dispose of company assets.

The Metropolitan Police estimate for the single filing fraud could cost as much as £1b.

Yesterday we reported on the ‘success’ of Nigerian style internet scams. There are many variations and one that we recently came across offered recipients of the e-mail a part time job. The e-mail purportedly emanated from a textile company with offices both in Africa and the UK and selling their products to customers all over the world but explaining that one of their difficulties is that many of their customers wish to pay by way of cashiers cheque or money orders. They offered 10% to people willing to accept those cashiers cheques or money orders into their own account and pass on 90% to their company.

Of course this is an ill disguised money laundering scheme.

Chatham House a reputable research body reports that, “criminal activities carried out by small minority of Nigerians, relative to the size of the country and the number of nationals resident in Britain or visiting it …… are a large and pressing problem” in the UK.

The Nigerian Style “fee frauds” are based around various scenarios all of which centre upon a large sum of money blocked in a foreign account and asking the recipient of the e-mail scam to assist in the release of those monies for a fee. Of course there are no monies and the ‘mark’ is drawn further and further in, made more and more enthusiastic and then is asked to contribute ever increasing amounts of money to expenses.

We are amazed that after this type of scam having gone on for so long and received so much publicity that the fraudsters still find it worth their while to send out thousands upon thousands of e-mail as they still appear to catch the unwary.

It has been reported that online banking frauds have risen by 150% based on the number of bogus bank websites which are used by criminals to obtain personal ID information.

Additionally cash machine fraud has risen by 37% in the UK alone and those frauds amount just under £40m per annum. Apparently the most common way in which a persons ID is stolen is by a miniature camera spying on people keying in pin numbers.

The one piece of good news in the recent report is that probably because of the introduction of new systems, overall credit and debit card frauds have fallen. In the first six months of last year they were down by five per cent, nevertheless over £200m was lost.

FATF, the Financial Action Task Force have been considering terrorist financing and asking questions such as, where did the terrorists get their money from and how can government best work together to stop them?

They have come to the conclusion that international co-operation is absolutely vital and to that end FATF has increased its own co-operation with the UN, the IMF, the World Bank and the G20 Finance Ministers and Central Bank Governors.

FATF has stated that it believes that solutions can be found but only by adopting effective counter measures such as freezing assets and information sharing but that it has to be universal.

A couple of months ago the Council of the European Union passed a Regulation which sets the rules on information about a payer of money which must accompany transfers of funds. The European Union acted in its normal expeditious way, implementing in November 2006 a recommendation of FATF made in 2001! The intention is the prevention investigation and detection of money laundering and terrorist financing.

While the new regulation was passed by a majority of delegates it was noticeable that the German and French delegations abstained.

The regulation became applicable on 1 January 2007.

A new report by the Financial Action Task Force (FATF) has indicated that cyber criminals are looking to launder money or to finance further crimes via the internet and to do so they have a whole host of new tools at their disposal. FATF have warned that greater skill must be applied by governments around the world in combating internet fraud and money laundering.

The study by FATF took something like a year to complete and highlights the risks of criminal exploitation of what it describes as “new payment methods.”

New payment methods are have been named as ‘e-purses’ eg cards that store funds via memory chips and internet payment services that operate outside traditional banks or credit card companies. The biggest of this type of company is PayPal used extensively by eBay, and Neteller which is a company based on the Isle of Man. PayPal are reported as having processed $9.1 billion in transactions in one quarter alone and Neteller processed $7.3 billion during 2005.

The Law society has warned that new money laundering regulations could put solicitors at risk of inadvertently committing criminal offences. The reason they state is that the regulations are, in their opinion 'impossible to interpret in practice.'

Additionally they argue that the regulations will increase the cost in cases dealing with trusts and that solicitors could only avoid criminal liability by making extensive enquiries at clients' expense.

The representations made by the Law Society together with an appendix showing examples of the type of case that could cause difficulties can be found at:

E-gold a competitor of PayPal has grown tired of being branded as a major funds transfer channel for dirty money and have been carrying out extensive investigation into customer transaction logs to identify people who misuse its system.

Recently they have blocked something in the region of 2,000 accounts and has turned over account and transaction histories to US Federal law enforcement agencies.

It is good to see that another country is enforcing reporting obligations in the way that they are enforced, or at least intended to be enforced here.

Yesterday we published a warning concerning eBay. We have received another email from purporting to be from eBay. Quite clearly they are getting more and more sophisticated. You will see that they state"

"Your registered name is included to show this message originated from eBay."

If I had not been so sure that I do not have a registered name with eBay I could easily have responded. It will also be noticed that nothing is shown in the text that purports to be my registered name - be careful!

Their email was as follows:

Your registered name is included to show this message originated from eBay. Learn more.

Question about Item -- Respond Now

eBay sent this message on behalf of an eBay member via My Messages. Responses sent using email will go to the eBay member directly and will include your email address. Click the Respond Now button below to send your response via My Messages (your email address will not be included).

Question from pinkglasslvr

Item: 7345204141

This message was sent by pinkglasslvr.

pinkglasslvr is the higher bidder.

Hello
I`m very interested.Please contact me.

Respond to this question in My Messages.


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We do not have an eBay account so there can be no doubt that our receiving this e-mail is an attempt to obtain information from us.

Happy new year to all of our readers.

Our normal reporting service wil recommence tomorrow and we hope that you appreciate the effort that we put into finding pieces of information that may help keep you up to date with developments in the counter money laundering world.

THE NEW YEAR STARTS WITH THE STUNNING NEWS THAT HAVING NOT REALLY BEEN GIVEN SUFFICIENT TIME TO BE EFFECTIVE (BECAUSE OF DELAYS IN CIVIL PROCEDURE) THE GOVERNMENT HAS ANNOUNCED THAT IT IS SCRAPPING THE ARA (ASSETS RECOVERY AGENCY).