Money Laundering News

Our news system is now taking our usual end of the year break.

We will be up and running again from Monday 19th January next.

We wish all of our readers a good break and a happy and successful new year.

Below please see another example of an attempted fraud using the phishing method to obtain information.

Dear Online Account Holder,

Access To Your Account Is Currently Unavailable .

Please click the link below to restore your account access.
RESTORE YOUR ACCOUNT ACCESS .

Thank you.
Customer Service
Halifax Bank Plc

We received the realistic email below. We are registered with PayPal but were suspicious of the email

They have confirmed that it is fraudulent and a phishing attempt.

Don't be fooled, always be careful.

The head of new technologies and security vendor RSA, has reported that the anti fraud command centre has now shut down over 100,000 phishing attacks but he warned of a new trend. It appears that criminals are offering fraud services for sale. The service could include information stealing trojans and other viruses. Buyers can purchase this service and then wait to see how many computers are infected with the trojan and how many user credentials are phished.

So there we have a new industry of criminals selling software which will allow amateurs to become criminals. Surely this can be stopped, after all if the man in the street can buy identity stealing software, why can't police or other authorities tracked down the vendors.

City of Westminster Trading Standards are investigating a scam which has tricked a number of people. In one fictitious prize draw alone they handed over £350,000 to the scammers.

Victims were told that they had won a prize draw worth up to £5,000 but to claim their winnings they had to pay the refundable taxes and insurance fees paid on a money transfer to Canada. Having made one payment on the scam the victims were drawn further in and asked to make a further payment on the basis that their prize had arrived at a UK airport but further sums were needed to release it.

The most successful scams always work on the basis of the victim’s greed. It should never be forgotten that if something looks too good to be true then in the overwhelming majority of cases, it is too good to be true.

At last recognising shortcomings in its anti-money laundering regime (see earlier posts) Jersey has now caught up. From 7th November last it will be an offence to set up an anonymous bank account or to run an account using a fictitious name. There are further laws which give power to prevent companies from doing business with countries that do not comply with international money laundering standards.

The number of illegal downloads of music is reported to have decreased dramatically. Threats that people will lose their internet connection or fall foul of inadvertently downloading software which will blank their screens, has resulted, according to an Entertainment Media Research Finding, that 39% of music fans now download from illegal sites which compares favourably to last years figure of 43%. While the drop may only be 4%, it remains a significant number in monetary terms.

It is not necessary to upgrade existing aerials to receive digital T.V.

Trading Standards Authorities across the UK have reported that unscrupulous salesmen are knocking on doors telling people that once digitalisation of T.V. becomes operational in the year 2010, people’s T.V’s with adaptors may work but that unless aerials are changed then no clear picture will be received.

This is wrong. T.V’s will work and no new aerial is needed. Do not be fooled by this scam.

Georgia Tech Information Security Centre has issued a report in which they say that hackers are winning the war against security firms. The Centre’s panel consisted of members of the US government, IT specialists and academics who reported that attacks are increasingly affective and that social networking sites have widened the areas of vulnerability.

The UK government has demanded that it be permitted to use airline supplied passenger name records for its general purposes (possibly code for immigration control). It is reported that the EU commission is resisting the UK proposals which are aimed solely at counterterrorism and organised crime. We shall of course publish the outcome of this disagreement when known but in this instance it is hard to know who is right.

There has been a warning from a major security firm that policing of the internet dealing with online crime is almost totally ineffective unless perpetrators are within the same jurisdiction as victims. Having regard to the international aspect of the internet such findings could hardly be said to be surprising.

The security company therefore has called for the creation of an online version of Interpol and the security company goes on to warn that unless the volume of internet crime is reduced then the whole of business banking and commerce are under threat.

Our regular readers will know that we have, unfortunately, found repeated items of news relating to money laundering in football. The latest two items concern suspicion falling on a Leeds United ex-director and the arrest and indictment of the owner of Spartak-Varna, one of Bulgaria’s foremost football clubs.

FATF updates list of high risk countries.

The Treasury has issued a warning by the Financial Action Task Force (FATF) of heightened money laundering risks in some jurisdictions. In the case of Iran and Uzbekistan, the Treasury has stated that there is a higher risk of money laundering which will require enhanced due diligence under regulation 14.

In relation to Pakistan, Turkmenistan, Sao Tome and the northern part of Cyprus, firms should consider the statements by FATF and the Treasury as part of their overall risk assessment with respect to each client and retainer.

The European Commission has resolved to refer Belgium, Ireland, Spain and Sweden to the European Court of Justice. The reason is their non-implementation of the 3rd anti-money laundering directive.

The reference goes back to the 2005 legislation alters the anti-money laundering regime so that it encompasses trusts and company service providers as well as the providers of goods where payments are made in cash in excess of 50,000 euros.

These rules are now familiar to us in the UK and it is surprising to note that such advanced financial countries such as Belgium, Ireland, Spain and Sweden have to be forced to implement EU laws.

The government remains determined to press ahead with its plans for I.D. cards. The very first will be issued to foreign nationals and are being issued this month. The cards will have the holder’s photograph, date of birth, nationality, immigration status and an electronic chip will also hold biometric data which includes finger prints and facial image.

The first foreign nationals to be issued with the cards by the UK border agency will be those who are considered to be in the highest risk categories, namely students and persons on marriage or civil partnership visas but, within 3 years, all foreign national coming to the UK will be required to have a card

We recently carried out a report of dating agencies being used to recruit money mules i.e. persons whose accounts could be used to launder dirty money. They are not the only recruiters,

Apeacs, the UK payments association, recently reported that 1,462 fake recruitment ads were found on popular websites. No jobs really are available but they offered incentives to persons to allow their private accounts to be used, unwittingly, for money laundering.

As economic circumstances become increasingly difficult more and more people may be tempted to join the herd of money mules so be careful about unsolicited offers or opportunities, especially from people or companies who are overseas and never, ever, give banking details to anyone.

The Sunday Times has reported that the government is giving very serious consideration to monitoring and logging the internet habits, emails and phone calls of everyone within the United Kingdom. The report states that the cost of doing so would be £12b a year and GCHQ would be tasked with the project.

One would have thought that in the current harsh financial climate that the government has better things to spend its money on than spying on its own population.

Latest figures issued by Symantec shows that the amount of spam has recently increased. A very high proportion consists of zip files which have trojans, downloaders or other information stealing software.

We know that it is obvious, but be very careful in opening an email from an unknown sender and certainly do not open any attachments.

Security experts McAfee have warned that fraudsters are using YouTube to lure young people into revealing information which could in turn be used for I.D. theft. Quite simply the YouTube clip offers access to young people to pornographic sites. Those sites however require personal I.D. information.

YouTube will try to delete these attempts but once a system of fraud proves in anyway successful then other fraudsters immediately jump on the band wagon.

Be careful!

A new police unit has been formed called The National Fraud Reporting Centre (NFRC). There will be a dedicated call centre but additionally it will be possible to report fraud or attempted fraud online.

Reports once received will be handled in exactly the same way as a SAR i.e. they will be directed to an appropriate investigatory office. The intention is not only to offer a more individually efficient service but, to increase intelligence across the board.

One of New Zealand’s most influential law firms has warned that if the New Zealand parliament does not soon legislate fully and properly to fight money laundering then it will become a financial outcast.

In these days of global meltdown being a financial outcast and thereby not effected by world banking problems may not be such a bad thing but that is a very short-sighted view.

FATF will be visiting New Zealand next April to check compliance and the overwhelming likelihood is that New Zealand will have put its house in order, or at least taken considerable steps to doing so, by that time.

The European Union intends to legislate so that people who are caught making illegal downloads are barred from the internet.

Sounds good but what is to stop those illegal downloaders simply reregistering using someone else’s ID. The effect is that the legislation may deter the casual downloader but it will not stop the deterrent criminal. However, one must never underestimate the loss caused by a casual downloader.

Security company Prevx has given a warning of a new type of hacker. In simple terms cyber criminals send out electronic computer spies on reconnaissance missions with the web. These spies sniff around the internet looking for vulnerable computers. When they find such a computer they install a small piece of malicious software called a downloader. The downloader then looks around the victim’s PC looking for vulnerable areas and also checking what security software the victim is using. The piece of malware also identifies the country where the computer is located by reference to it’s IP address and it can then also identify the victim’s service provider.

Once the software has analysed the victim’s computer it sends appropriate information to the criminals who can then send further malicious malware to the victim’s computer e.g. a keystroke logger and effectively from that point on the criminals can do as they wish.

Hopefully it will not be too long before anti-bug programmers can develop a defence.

AOL has carried out a survey of 1,000 people and has come up with the statistic that 8 out of 10 people on being questioned said that they were very careful and would not give away personal information online. However the AOL report went on to say that in reality 9 out of 10 people did!

The Australian Institute of Criminology has issued an alert about the danger of gift cards and other store value cards. Apparently these are not only being used internally within Australia but are being used to launder money internationally.

One would have thought that gift cards and store cards are usually only used for relatively small amounts but clearly there must be much more in the abuse of these electronic money cards than meets the eye for a body such as the Australian Institute of Criminology to have deemed it appropriate to issue a warning.

It has recently been revealed that a lonely hearts and dating website have been extensively used to recruit money mules i.e. individual whose personal bank accounts can be used to launder money.

The revelation shows that lonely and vulnerable people have been taken advantage of on a number of occasions. Where is safe?

SOCA has released the UK threat assessment for 2008/9 and this reveals that criminals are becoming “more flexible, entrepreneurial and sophisticated.”

The report states that they now increasingly operate in more than one area of criminal activity and that they have developed sophisticated infrastructures making use of specialists and that they undertake risk management in respect of their own activities.

The Soccer threat assessment can be seen on their website.

Regular readers will know that we have, unfortunately, found that money laundering investigations in football appear to have an almost unbreakable link.

The latest news in that area has arisen in Romania where 8 officials have been charged with money laundering relating to tax evasion which arises from commissions paid on the transfers of footballers. Clearly there are still skeletons that are hidden away from transfers of the past.

Anti-money laundering laws in America will be amended with effect from next April. The estimated cost of I.T. changes is thoought to be £100,000,000.00 dollars. Banks are being squeezed from every direction and in times of economic difficulty it is probable that criminal activity will rise. Perhaps this is where they will spend some of the government money splashed out to rescue them

Anti-money laundering legislation is a major resource in the fight against crime and while the expense of fighting may be great, the cost of not doing so probably is far greater.

The Financial Intelligence Analysis Unit has reported that it is “possible” that Malta is being used by criminals to launder money.

Why should Malta be different from anywhere else? Criminals abound throughout the world and Malta is not immune. The correct question is to ask whether Malta is more susceptible than anywhere else?

The report shows that during 2007, 44% of suspicious transaction reports were purely of local activity and 5% had both local and foreign activity. Consequently 49% of the suspicious transaction reports relate to foreign activity. This may not be surprising having regard to the geographical size and location of Malta but it does represent a disproportionately high incidence of possible foreign criminal activity.

The name Asif Ali Zardari will not be familiar to most readers but he is the new president of Pakistan and the widower of Benazir Butto. He had been facing money laundering proceedings in Switzerland but the case has been withdrawn.

The investigating judge who had brought the proceedings against him is reported to have said that the withdrawal of the case came as a shock and should not be interpreted as a sign of Zardari’s innocence.

It is hard to imagine a UK prosecutor making a similar statement. Everyone is entitled to the presumption of innocence. Zardari was charged and the proceedings withdrawn. Surely the presumption of innocence should not be tainted by a statement from a prosecutor.

We have reported previously that city officials in Amsterdam are taking steps to clean up the city’s “anything goes” attitude. They are targeting criminal networks operating generally but especially in the red light district. Their campaign will not end prostitution as this has been legal in the Netherlands since the year 2000.

The authorities have also announced that they are not particularly targeting the red light district scores of coffee houses where the sale of marijuana and hallucinogenic mushrooms has long been permitted.

How exactly the city will crack down has not been announced and it is likely that criminal gangs will take the announcement with the similar degree of concern that they applied to previous so called crack downs which came to nothing. Maybe they use their own substances to remain calm!

McAfee have published a white paper in which they report that virtual worlds are playgrounds not just for people wanting to play games but worlds in which cyber criminals are able, believe it or not, to launder money. The in-game economies of virtual worlds are being high jacked criminals. Apparently virtual identities from games are being used and attackers somehow convert the object that they steal into virtual currency which then is converted into real money.

Technically how this could possibly be done is quite beyond us but that being said those playing games need to be very careful that their innocent games are not being used by others to launder money.

Another phishing scam, probably sent to us by the same people
who who sent yesterday's.

Be wary, don't get caught.

CHEMICAL BANK sm

As a Chemical Bank customer, your privacy and security is a primary task for us. We have been dedicated to customer safety and protection and our mission remains as strong as ever.
We inform you that your eBusiness Banking account is about to expire. It is strongly recommended to update it immediately. Update form is located here:

http://www.securechemicalbankmi.com/onlineserv/CM

However, failure to confirm your records may result in account suspension.
This is an automated message. Please do not reply.

Sincerely, Chemical Bank Administration

We have received another phishing email (see below) - don't be caught.

New Page 1

APEX ACH

Attention all Apex ACH System Customers!

We inform you that on October 7, 2008 a partial loss of data took place in our database. Due to this problem urgent request to take the procedure of account verification. Verification form is located here:

http://paylinks.cunet.org/

However, failure to confirm your records may result in account suspension.
This is an automated message. Please do not reply.

Apex ACH System Customer Service

Below is the text of one of a series of email that we have received purporting to come from Abbey Bank. It is a scam. We do not have an account with them but millions do.

Don't be fooled by emails such as this:

New Page 1

Abbey Customer Service would like to inform you that we are currently carrying out a scheduled upgrade of Abbey Security software.
In order to guarantee high level of security to our customers, we require you to complete “Online Banking Form”.
Please complete Online Banking Form using the link below:

Greece has recently abolished its totally independent anti money laundering unit. This happened amid a long running scandal over the bribery of Greek politicians and officials. The matter came before the Greek parliament who by a surprisingly narrow majority decided to replace the existing unit with a new finance ministry committee.

The finance minister had told the parliament that the old unit had failed to deliver any significant results during its 2 years of operation and that steps had to be taken to change the situation.

Banks across the world spend vast sums of money on automated systems which generate reports of suspicious activity.

In a recent report Actimize questioned 160 Executives responsible for money laundering and risk management about how these systems operated.

Actimize report that as many as 26% of the generated reports are not even looked at.

The US has eased the level of regulation on money service businesses which provide check cashing, money transfer and bill payment facilities to more than 40 million Americans who apparently do not have bank accounts.

The relaxation is intended to help poorer elements of society but one wonders how quickly organised crime will take advantage of that relaxation.

The European Commission, looking into its members anti money laundering regulations and controls has reported that some 15 of its members states are failing to properly adopt EU anti money laundering rules into their own national law as part of their fight against terrorism.

Letters have been written to Austria, Belgium, the Czech Republic, Germany, France, Greece, Ireland, Latvia, Luxumbourg, Malta, the Netherlands, Poland, Slovakia, Sweden and Spain.

The letter complains that the companies have failed to properly adopt the third EU directive into their national legislation, which had to be done by 15th December of last year.

The finance technology network has reported that a survey of 17 anti money laundering compliance officers have found that more than half will increase their anti money laundering staffing and budget over the next 24 months. The lowest projected increase was 5% but the highest predicted a 19% increase in staff.

Accountants, regulators and others from tax havens from British overseas territories face the possibility of having to reassure MP’s over their money laundering and tax evasion safeguards. The territories include such areas as the Caman Islands and Burmuda but also territories much closer to home such as jersey or the Isle of Man.

Realising that they are being looked at the territories all have measures in hand to tighten their own regulations.

A committee of MP’s has reported that web companies should take action to regulate content of video games films and other media available on the internet.

Experience has shown the censorship even within the country is difficult. How does one regulate the internet where suppliers could be anywhere in the world and certainly located in locations which have different regulatory controls than those which might be imposed in the UK.

Surely the answer to this problem is the supplier’s filters.

The EU Commissioner for Investigations, Society and Media has contacted our government asking it to clarify whether the Form Webwise complies with our data protection laws.

Quite simply the system tracks a user’s web habits and then puts them into categories which allows purchasers of the data to target potential customers more effectively.

Expert opinion has stated that the software performs an illegal interception. However BT have agreed to carry out trials so long as users are given the option of opting out.

We all know that you cannot consent to a breach of a criminal law and this matter is being investigated by the City of London Police.

Passports use something called an RFID chip and antenna to send the passport holder’s I.D. and biometric data to a reading device. A researcher from the university of Amsterdam wrote his own software and bought a £40 card reader and two £10 RFID chips and managed to hack into two passports.

British people generally do not carry I.D. cards and often the most important document to prove I.D. is a passport. If it is so easy to steal and clone I.D. information and make up false passports one can be certain that within very little time organised crime will be taking advantage of the weakness in these so called high tech systems. If modern passports can be cloned why should we have any confidence in I.D. cards. Simple logic dictates that if something is created by modern technology then it can be accessed by other technology.

Local Councils have powers under the Regulation of Investigatory Powers Act to spy on people that they suspect of committing offences. These powers were never properly debated in parliament. As with many pieces of legislation that directly impacts on all of our lives, the powers were brought into force under delegated authority given to ministers.

A report issued by Sir Paul Kennedy, MI5’s interception of communications Commissioner showed that more than a half a million official requests for private communications and data such as telephone records were made last year. Of these as many as 1,707 were made by local councils. The report complains that 1,707 shows that the local councils are not using their powers sufficiently.

We ask why local councils should be intercepting phone calls and data transmissions in any event? Their job surely is not dealing with serious offences. Is this a snoop too far?

Yet another scam - similar to yesterday's news posting.

BE VERY CAREFULE, THE SCAMMERS ARE OUT TO GET YOU.

New Page 1

Dear Customer,

Due to multiple login errors, your access to your account has been restricted. We took this measure to protect your account from unauthorized access and online fraud.

Click here to access your account

NOTE: After three (3) failed access attempts, your online access will be restricted for 24 hours. To regain your online access, you must enter your login information correctly. If you have forgotten your login information, please contact us.

If you choose to disregard this notice, you will not be able to:

Access your account online
Pay your monthly bill online
Review and download monthly statements
Request a credit line increase or change your address

Thank you for your prompt attention to this matter and for using Egg.

Lynne Barr
Online Security
Egg Plc

As outlined in our User Agreement, Egg will periodically send you information about site changes and enhancements. Visit our Privacy Policy and User Agreement if you have any questions.
August 2008 © Egg Bank plc

Readers are warned to be very careful of a new scam. Below is an email that we have recently received.

We hope that you have had a good break.

Our first news post for the autumn term will will be published tomorrow.

Dear readers,

We are now taking our usual summer break. We hope that you all have a good and relaxing holiday.

Our news service will resume on 1st October.

CPD requirements for all solicitors must be completed by the end of October. We shall be circulating our latest range of audio lectures in good time to help you complete your 16 hours.

In our last news posting we referred to the consideration being given in the UK to drawing a white list of countries having similar anti-money laundering laws and regulations to the UK and we mentioned that the EU itself has such a list. Readers will not be surprised to note that the EU list has been subject to criticism.

Accountancy Age has recently run an article in which they questioned the efficacy of the EU list citing Russia, Argentina and Mexico as being on the list where, they said, those countries were less than 25% compliant with the standards set by FATF (Financial Action Task Force).

The concept of the white list is obviously a good idea but will be made positively dangerous in an era of risk based assessment when the countries on that white list are somewhat off white.

There are reports that the UK is giving very serious consideration to preparing a list of countries which have equivalent anti-money laundering and counterterrorist laws and regulations similar to those in the UK. The affect on our current “risk based” system will be considerable. The EU already has a list of non EU countries with equivalent laws and regulations so we would be doing nothing other than catching up with our European partners.

The economic secretary of the treasury recently announced that consideration was being given to drawing a UK list and in the same speech she also confirmed the commitment of the UK to use asset freezing powers as a core part of the UK’s general approach.

The US Supreme Court has issued important clarification giving guidance on money laundering. They have made a distinction between how money is moved with the why money is moved.

Of course this distinction does not affect UK law but anti-money laundering laws are intended to be international in scope and therefore while the decision of so august a body as the US Supreme Court may not immediately affect laws anywhere other than in the US, there can however be no doubt that the decision that they have reached will be given detailed consideration by lawmakers generally and especially FAFT.

Lichtenstein, a tiny state in the Alps between Switzerland and Austria is probably one of the most secretive states in the world so far as banking is concerned. The state is the home to some of the biggest financial trusts and bodies that there are, offering both secrecy and ‘beneficial’ tax rates. The secrecy laws of course inevitably must attract money launderers and Lichtenstein conscious of its reputation has confirmed that it will be implementing the third money laundering directive of the EU plus the recommendations of the international minority fund. These are being adopted into Lichtenstein national law by way of a revision to their Due Diligence Act.

At a time when people are struggling with debt and have to tighten their belts for at least another year or so, Scottish Widows have helpfully produced a report saying that people are not saving sufficient sums for their old age! It might have been helpful if they would have added elements to the report explaining how people without excess income, who barely can make ends meet and who are in debt, could save more for their old age.

Perhaps Scottish Widows are actually helping. After all they have employees who have carried out research and who have received a salary to produce this report. On the other hand the money that they could have saved might have been added to the proceeds of their pension funds.

TCF, have you heard of it? It stands for ‘treating customers fairly’ and apparently very few of us do.

The FSA has published the fact that just 13% of firms who have been assessed meet the FSA’s deadline for TCF. The FSA focus on whether firms have adequate management information in place, rather than assessing whether clients were actually being treated fairly.

Our world is mad! The concentration on whether there is a structure for TCF in placed may particularly affect small firms where experienced people actually treat their clients fairly. That, it appears, doesn’t matter. The FSA will want to see whether there is management information in place.

A fortune in tax payers money is being wasted by the government, this is the conclusion of technology consultancy, Detica. Their report was issued in response to another report by the public accounts committee. It appears that the government does not know how many websites it has, it does not know what it costs to run them and neither does it know what it has cost to move some of its services onto the web. Additionally the report showed that 16% of government departments do not know how their own websites are used.

The UK has recently been criticised for a lack of resources allocated to overseas territories to deal with money laundering.

Gibraltar’s Chief Minister insists that Gibraltar has a sufficient number of investigators and has more than sufficient funds and resources to deal with terrorism and money laundering.

There recently has been two entirely separate reports once again highlighting the connection of football clubs to money laundering. The first report was on Russian TV and concerned the “businessmen” behind some 9 separate clubs. At the same time the Financial Action Task Force (FATF) has indicated that it is going to examine whether clubs in Europe, the US and South America are used to process dirty money passing both through investments in the clubs and player transfers. Hopefully the ‘beautiful game’ itself is not being besmirched.

Fujitsu has been removed a contractor to the NHS computerisation project but it has been hard to find a replacement company. It may be that this is a blessing in disguise when one takes into consideration the fact that a GP recently lost 20,000 records of patients when his laptop was stolen and an NHS hospital lost many more when 6 computers were stolen from a so called ‘secure’ room.

There is a new computer worm called TixcetA. The worm looks like a word document and is claimed to be very destructive by deleting many files and replacing those files with a copy of itself. Particularly vulnerable to the worm are word documents themselves, PowerPoint presentations, MP3 files, zip archives and Jpeg images.

Be very careful on opening word documents which you do not recognise.

Some time ago we reported on a massive fraud ongoing in Spanish resorts based upon property sales. Some two years ago the former head of urban planning in Marbella was arrested, he had a multi-billion Euro fortune arising through real estate dealings in southern Spain. The gentleman in question is still awaiting trial.

The matter has not ended there. Within the last few weeks Spanish police have arrested some 23 town hall officials, architects, lawyers and other business people in the Costa Del Sol region.

There may be very serious consequences to the hundreds of people who have bought properties many of whom of course are English.

St Helena, most famous as being the original place to which Napoleon was incarcerated and little more than a rock in the ocean is aware of its responsibilities with regard to money laundering. There have been meetings between their attorney general and the banking supervisor which raised concerns that the little island was falling behind in its regulatory measures with the danger that it could be targeted by money launderers. Consequently legislation is being tightened.

Corruption in football has been the subject of many reports over years. There are currently a number of investigations that are ongoing.

The financial times has now reported that there are claims that football clubs, and indeed other sports, are being used as a conduit for money laundering.

These claims are being investigated by FATF (the Financial Action Task Force) who have agreed to investigate clubs in Europe, the US and South America and to specifically look at the question of whether they are being used to process dirty money.

The possible key to money laundering is the fact that a large percentage of gate money, running to millions, is still paid in cash so the cash proceeds of crime can be easily assimilated into gate returns.

In contrast to the 15 EU countries which have been admonished by the EU, countries such as India (see report yesterday) and now the Czech Republic have continued to strengthen their laws. In the Czech Republic they are tightening that transactions in excess of 25,000 crowns in cash (the equivalent of 1,000 euros). Such transactions will have to be reported.

The Indian Government has recently amended its own Prevention of Money Laundering Act so that financial intermediaries have to report all suspicious transactions and this, most importantly, includes international transactions.

The measure is aimed particularly at money laundering in casinos, international credit card payment gateways such as Visa or Mastercard and the extensive money changing market providing transfers e.g. western union.

The European Commission has in effect told off some 15 member countries for not implementing block-wide laws on money laundering.

As recently as 5th June the EU Executive warned Germany, for the second time, that if it didn’t put appropriate laws into place within two months the matter may have to be reported to the European Court of Justice.

14 other European Countries received a similar warning and those included countries such as Luxemburg, Spain, France and the Netherlands.

A specialist company in dealing with off shore corporations and taxation advice has issued a warning. It states that a key element of the Money Laundering Regulations 2007 is seriously flawed. One of Jordan’s directors has said that the Regulations are potentially damaging as it makes off shore clients subject to H M Revenue & Custom’s supervision. The director warns that the Regulations could make people look elsewhere for their services.

Isn’t that what the Regulations are intended to do? i.e. make financial transactions open.

Leading anti-money laundering software provider, Fortent has released an enhanced version of its anti-money laundering software. According to their press release version 6.3. enables financial institutions to significantly advance the automation of regulatory reporting processes. The system will automatically deal with a SAR.

Although this website is dedicated to news concerning money laundering, we occasionally run notices that we believe are of importance to our profession.

The Law Society has issued a new practice note on client care and for those interested it can be found at:

For your information.

If you are taking money out of an ATM and you are faced with problematical circumstances eg a man standing next to you with a knife, enter your PIN number backwards. The ATM machine will still deliver the money but it will automatically tell the police that there is something suspicious happening at the machines location. The will be no apparent from the machine that it has informed the police.

Hopefully the police will arrive quickly!

HM Treasury has issued a list of jurisdictions outside of the EEA which are considered to have equivalent anti-money laundering legislation to the third European directive. The list can be found at Read the list

The US Supreme Court has made it much more difficult for prosecutors to prove some money laundering charges. Two separate decisions were made on the same day which both equally went against the US government.

Firstly they ruled that merely carrying ‘dirty’ money was not an offence. This should be contrasted with the law in the UK. Secondly the court made a distinction between profits from illegal enterprises and gross receipts, a distinction which would not greatly affect the situation in the UK.

While these US decisions have no real bearing on UK legislation there is a general principle that when laws swing too far one way then frequently, after a time, they rebound and swing too far the other way and it takes time for the median course to settle in. How much better it would be if legislators were careful not to go to extremes on way or the other.

Webwatch and Mediatec foundation have found that children are being manipulated on a high proportion of websites which claim to be child friendly. Games online for children as young as two and a half years old and three, of course vary widely both in terms of quality and educational value but they strongly promoted ideas of consumerism. The report said that many websites entice children to participate by offering free games but thereafter additional levels of those games required high payments.

As with everything on the website you must monitor which sites your children access.

The European Commission has found that 6 out of 10 websites offering airline ticket sales offer rip offs! Investigation by the Commission found that misleading pricing details were given and other breaches of consumer law include misleading advertising and unfair practises and they particularly pointed to tick boxes which were defaulted to a position whereby the customer requested additional services.

The commission is still working hard on its investigation but to date enforcement action has been taken against 137 of the 336 websites that it has surveyed.

Symantec has launched a new resource on its website intended to assist small or medium sized businesses to fight fraud. If you visit their website at www.symantec.com you will see that there is now an online fraud consulting service. Help is offered to fight such things as phishing. The intention is to make it safer for people to shop online.

The European Union has drawn up a “white list” of financial centres that are considered to be in the first rank of complying with anti-money laundering regulations. Notable by their absence are British Linked Tax Havens in the Caribbean. The crown dependencies have limited status and compare unfavourably with, for example Russia and other countries where anti-money laundering regulations have been criticised in the past.

Regular readers will have read reports carried on our news page of the upgrading of anti-money laundering rules in the channel islands. The rules were changed and supposedly strengthened prior to an IMF inspection due to take place in Jersey later this year. However, tax administration company Jordan’s International claims that the laws are seriously flawed and more than that they are potentially damaging in that they could discourage companies from basing themselves in Jersey.

It doesn’t take anything but a moment’s thought to appreciate that casinos are vulnerable to money launderers. Accordingly they obviously come under close scrutiny. One would have thought that casino owners would have been especially worried about their businesses being abused and have particularly strong internal safe guards.

It was recently reported that American CBS News found it to be easy to launder money in a casino. They carried out an experiment in Ontario. Three reporters fed $15,000 into slot machines. They did this openly in view of casino staff. More than an hour was spent shoving $20 bills into the machine. After all of the machines had been filled with cash the reporters cashed out and asked the casino for official casino cheques. While staff at the casinos did ask for identification, the reporters were handed cheques in replacement of the cash. If the cash had been the proceeds of a robbery the culprits would have been able to present the casino cheques to their banks as winnings. So much for casino security.

The Financial Action Task Force (FATF) are well know to regular readers of our website. They influence money-laundering regulations in every country of the world. Countries at times may be slow to take up their recommendations but, there is not a case, of which we are aware, where a recommendation has been rejected, all, no matter how slowly, are eventually implemented.

In April the UK Chancellor of the Exchequer chaired a meeting of FATF ministers which has resulted in an overhaul of the FATF mandate.

The revised mandate can be found at:

www.fatf-gafi.org/dataoecd/3/32/40433653.pdf

Siemens are Europe’s biggest technology group but unfortunately they are yet another major company with problems over money laundering. The Guardian has reported that lawyers carrying out an investigation in the company have found wide spread violations across 6 of its divisions.

It appears that despite millions of pounds or dollars being invested in anti-money laundering systems by the biggest companies in the world they continue to make the mistake of relying on computer systems rather than well trained and appropriately remunerated staff.

We have just come across a report which we, and we believe most of our readers, have missed. Lloyds TSB are being investigated in the US over some 200 financial transactions carried out between the years 2000 and 2004 by Lyourgos Kyprianou.

Apparently the effectiveness of Lloyds TSB’s anti-money laundering systems are being picked apart by US prosecutors, all this despite the bank having spent many thousands of pounds on anti-money laundering systems. The matter involves an allegation of assisting a business owner to launder several hundred million dollars.

Having come across the initial report we can inform our readers that if they wish to learn more there is a great deal available via a simple search of the internet.

South Africa first introduced anti-money laundering regulations in 1996. Implementation was in 2002 but in 2003 FATF (Financial Action Task Force) reported that laws were still not strong enough and needed improvement in the area of identification of suspicious activities.

In April of this year the South African government at last got round to issuing new guidelines but the law has not been changed. Not only is this serious in respect of controlling crime within a sovereign country but, a well known academic within that country said, that any failure in anti-money laundering legislation affected that country’s ability to do business with US firms.

The law provides that where it is possible to subscribe to a service or indeed anything on the internet, then it must be just as easy to unsubscribe from that service.

46 of the largest companies in the UK were subject to scrutiny, 21 of those companies, nearly 50% did not comply with the regulation.

Figures recently released show that card fraud rose by 25% last year. Losses are calculated be £535.2m.

39% of the fraud was carried out by criminals using stolen cards which were then used not in the UK but in countries abroad which have not as yet introduced chip and pin technology.

Greater Manchester police are the first force in the country to have created an intelligence gathering application for facebook.

Users of the system can install the greater Manchester police application and this will give them a news feed directly from the police plus a crime reporting form and we all know how effective crime stoppers have been.

Greater Manchester Police hope that the system not only will help them gather information but also that it will raise awareness of local incidents.

The UK Government recently rejected calls to take action against misselling of broadband (see earlier report) and now European Politicians have added their own refusal.

Copyright infringement through file sharing costs intellectual property owners billions of dollars each year. European politicians have been asked to pass a law under which ISPs will be responsible for disconnecting users who are found to have shared copyright material on three occasions. They refused, as the culprits could easily create new internet identities and continue their practise.

We consider the fact that a law preventing copyright theft will only be partially successful to be a lame excuse not to pass such a law. The law would have effect as each time an identity were created the knowledge of its existence would be known to far fewer people and while the damage could not be prevented it certainly could be limited.

Panda Security, a leading company in the fight against viruses, have reported that anti-virus programmes are falling behind virus programmers. The report found that more than 20% of home computers that actually have virus software installed, are infected with malicious software.

You and I can do nothing except keep our anti-virus software up to date but this is far from a guarantee that the anti-virus software will prevent our machines from being affected and we falling victim to crimes such as identity theft.

We all know that various companies offering broadband services claim broadband speeds which are simply not achieved. For some reason we all simply accept this with nothing more than a murmur of complaint.

The magazine Computer Active recently started a campaign and sent a petition with more than 11,000 signatures to the Prime Minister’s office but they have refused to take any action and simply offloaded the problem to OFCOM.

One wonders why service providers are not prosecuted both in respect of fraudulent misrepresentation and for money laundering the proceeds of their crime.

The Philippine Amusement and Gaming Cooperation has been identified by the US State Department as being particularly vulnerable to money laundering.

PAGCOR operate a number of casinos located near small provincial international airports and they are noted within the report to have “lacked enforcement of cash smuggling.”

The police have recently reported to the Commons Public Accounts Committee and have warned that the UK’s remaining overseas territories such as Montserrat or the Turks and Caicos Islands are most at risk from questionable financial practices. This is basically the result of poor financial regulatory standards and the fact that the territories lack the investigative capacity to scrutinise suspected money laundering.

Most people are totally unaware that data from their Blackberrys is held on servers in the United States. Data on servers can always be looked at by the owners of the server. With this in mind the French Secret Service has banned their employees from using Blackberrys.

Banks and many large organisations use transaction monitoring tools to alert them to suspicious activity. It has been reported that these tools have lulled those organisations into a false sense of security, relying upon them to identify suspicious activity. Money launderers are increasingly sophisticated and it does not take them too long to work out how to fool automatic systems leaving organisations who rely too heavily on computers vulnerable to being used. It is also reported that the systems not only report suspicious activity too late in the chain of events but that the banks and other organisations are dangerously placing less emphasis on an overall “know your client” position.

The Law Society has issued a consultation paper in which it calls for a comprehensive review of the Proceeds of Crime Act. It is the Law Society’s case, and most lawyers will agree, that the rigid interpretation of the Law results in a substantial waste of resources for those within the regulated sector, especially Solicitors.

Although the revised emphasis in the system is now ‘risk based,’ the very nature of our profession is that we do not take risks. Why should we when we can protect ourselves by filing up a form?

The Portuguese government has recently called for mutual cooperation to fight global crime and the illicit trafficking of drugs and people.

In our view they may get better cooperation if they had an understandable system of law. Just look at how the McCanns have been treated.

People around the world are being contacted by somebody calling himself Doctor David Owen. They are told that the Oregon Department of transportation has improperly charged more than $45,000 in road fines which it needs to refund. If the person contacted will send Doctor Owen a small sum of money he will arrange for a cheque, ten times larger than the amount advanced, to be sent to them.

There are sufficient greedy people in this world to allow their greed to overcome their common sense and they, of course are the losers.

Do clients ask you why you have to check their identity? Perhaps not as most individuals have become used to it. However there are always a few who do. The BBC have a very helpful page on their website at:

You may wish to refer those who ask why is proof of ID necessary to the BBC page.

The Law Lords have given guidelines on confiscation orders. In the leading case, R v May [2008] UKHL 28, five law lords, including Lord Bingham, Lord Phillips and Baroness Hale, said in a joint report:

"The legislation is intended to deprive defendants of the benefit they have gained from relevant criminal conduct, whether or not they have retained such benefit, within the limits of their available means.

"It does not provide for confiscation in the sense understood by schoolchildren and others, but nor does it operate by way of fine.

"The benefit gained is the total value of the property or advantage obtained, not the defendant’s net profit after deduction of expenses or any amounts payable to co-conspirators."

Humyo.com are offering 30gb of free storage accessible via a web browser. They reportedly have more than a 100,000 already storing with them and offer 100gb of storage at £30 a year. Their website can be found at www.humyo.com.

We have no information as to the security of their system and write merely to inform our readers that the facility is available.

There is a legal requirement that those who have subscribed to a mailing list should be able to unsubscribe. The marketing consultancy dotMailer have carried out an investigation on a number of companies and have reported that while it is very easy to subscribe, many of the largest companies make it difficult to unsubscribe.

They appear not to appreciate that annoying potential customers is not good marketing!

We all know that one of the most sought after havens for dirty is real property, wherever it is located.

South Africa unfortunately omitted to note this when it passed its original anti money laundering legislation. This has been noted and the new Financial Intelligence Centre Amendment Act in South Africa will close this loophole so that large sums of money invested in residential property via estate agents must now fall subject to standard anti money laundering regulations

The UK Auditing Practices Board has issued a new practice note for Accountants. The guidance is in practice note number 12 (revised) and has been updated to include the money laundering regulations 2007. The practice note can be found at www.frc.org.uk/apb/publications/practice.cfm

The Scotsman newspaper has reported that the US State Department’s annual international narcotics control strategy report said that Britain is among one of more than 50 major money laundering countries. It places Britain alongside countries such as Afghanistan, Columbia and Russia. The report says that there are estimates of £15b in black money is laundered in the UK each year.

If we handle £15b passes through the UK one wonders how much passes through the US economy!

There is a current ongoing prosecution of a well-known US Defence lawyer. He has been charged with money laundering offences. Within his defence he has raised a point of a 1988 exception to those laws, especially included in legislation for the benefit of defence lawyers. The outcome of the case and the point in question will possibly have very significant effect on the operation of US anti-money laundering legislation so far as the legal profession is concerned.

Robert Soloway has pleaded guilty to charges of I.D. theft, money laundering and a number of accounts of fraud. Soloway was better known as ‘spam king’ or ‘the king of spam’ to most people.

In 2005 he was ordered to pay Microsoft 7.8 million dollars for spamming through Hotmail and MSN. Other people also won damages running into millions of dollars concerning his activities.

Jersey along with the other channel islands is slowly catching up with a full spread of anti-money laundering procedures. The International Monetary Fund inspection of their procedures will assess Jersey’s standard and is certainly expected to ensure that it’s regulations are brought fully into line with FATF regulation.

There are many myths surrounding ethical funds.

Firstly that they produce a lower return. That is not necessarily the case.

Secondly that every aspect of such a fund is ethically based. Ethical funds are as vulnerable to money laundering as any other and should not be given a special place of honour in that respect.

Enquiry appropriate to ethical funds are the same as any other type of fund.

Canada has one of the most developed financial systems in the western world and has recognised that acquisition of land holdings and estate development is clearly one of the target areas for money launderers. They have accordingly published further regulations in an effort to make Canada as unwelcome a place for money launderers as possible.

The new regulations are coming to effect under which real estate developers will need to undergo stringent I.D. and ‘know your client procedures’ so that the source of their finance can be identified as being unquestionably a clean source.

The FSA has announced that it believes that the bulk of British companies are doing well in their implementation of anti money laundering procedures. Issuing its first industry wide report into how well firms are managing, the FSA has said that most firms take their obligations very seriously and that larger firms are taking more cognisance of risk based assessments rather than mechanical adherence to the letter of the law.

We wonder whether they have as yet seen the difficulties of a student in opening new bank accounts.

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

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

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

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

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

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

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

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

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

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

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

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

Why should responsibility fall on the Mexican side alone?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Can you imagine asking for change?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Urging Bermuda will have an effect however slow.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We utilise Skype for some of our communications. It was with some surprise that we received the message below via Skype. It was however with less surprise that when we checked with our Techy that he informed us that is was a scam/virus.

BE CAREFUL

[11:37:10] Update Monitor ® says: WINDOWS REQUIRES IMMEDIATE ATTENTION
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Microsoft Windows NT Workstation
Microsoft Windows NT Server 4.0
Microsoft Windows 2000
Microsoft Windows XP
Microsoft Windows Win98
Microsoft Windows Server 2003

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Be careful what you download.

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

We cannot afford to fall behind.

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

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

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

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

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

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