Criminal, Money-Laundering and Financial Fraud

By pjain      Published Jan. 25, 2021, 6:35 p.m. in blog Invest   

Criminal, Terrorism, Money-Laundering and Financial Fraud Key Factors and Trends

Financial Elites "Heroes" see Making Money by Manipulating Finances and "Ripping off Clients' Faces"

Fraud and Government

Fraudsters often target the government in fraudulent claims - as an under-enforced and a "heist" on the public purse, undermining faith and trust.

In the UK, fraud against the public sector, including benefit, tax credit and student loan fraud, is estimated to cost £31-48bn a year, the upper figure larger than the UK's annual defence budget.

Private sector takes the biggest financial losses

One UK estimate from 2017 put the cost of fraud to businesses at £140bn.

Criminal Financial Fraud Prevalence across the Globe

Financial Fraud in USA

Financial Fraud in UK

UK credit card, identity and cyber-fraud is at an epidemic all time high levels and surprisingly the most prevalent crime, costing up to £190bn a year. The Crime Survey for England and Wales found 3.7 million reported incidents in 2019-20 of members of the public being targeted by credit card, identity and cyber-fraud.

In the UK, fraud against the public sector, including benefit, tax credit and student loan fraud, is estimated to cost £31-48bn a year, the upper figure larger than the UK's annual defence budget. One UK estimate from 2017 put the cost of fraud to businesses at £140bn.

UK Enforcement lacking

Fraud should be seen as a national security issue and intelligence agencies should play a greater role says think tank the Royal United Services Institute (RUSI). Policing should be better resourced, working more closely with the private sector, it adds.

In the UK fraud "everyone's problem but no-one's priority". But despite the growing scale of the problem, there is no national strategy for tackling the issue, while the police response is underfunded and lacking focus.

Anti-Scam calls bulk of "use of cell phones" - Too easy to Spoof!

Carriers Not Taking Easy Measures

Digitization of everyday life makes easier access

Fraud accelerated by Covid-19 as WFH universal

Covid has only increased the risks, with organised crime groups showing increased sophistication in their tactics.

"The UK has become a target destination for global fraudsters," the RUSI argues.

But the extent to which international criminals focus on the UK is hard to gauge, because intelligence agencies have not traditionally focused on the issue.

One senior fraud professional interviewed by the researchers said that despite 30 years of investigating fraud, they still had no idea what proportion of the threat emanated from overseas.

Classifying fraud as a national security issue would help ensure the right level of resourcing and prioritisation, the authors argue.

They also recommend more focused intelligence direction from the National Security Council, including greater tasking for GCHQ as well as the National Crime Agency to understand the issue.

They call for better information-sharing and use of data analytics, as well as more money and attention from police forces to address what they call a "responsibility vacuum".

Criminal Financial Fraud Perpetrators across the Globe

Mideast Financial Centers - esp Dubai/UAE

Iran - fights back against sanctions and US-Israel attacks

North Korea

Israel - Industrial Espionage, Massive Cybersecurity Capabilities implies World-leading Hacking Ability

Nigeria

China

Russia

East European

Terrorism Links to Financial Fraud

Society Disruption and Psychological Damage as bad as 9/11

"Fraud has the potential to disrupt society in multiple ways, by psychologically impacting individuals, undermining the viability of businesses, putting pressure on public services, fueling organised crime and funding terrorism," they add.

Fraud used to Finance Terrorism

Terrorist groups and lone actors turn to fraud in order to finance their activities,

In one [UK] case, eight supporters of the Islamic State group were convicted of defrauding UK pensioners out of more than £1m, which was alleged to be used in part to fund travel from the UK to Syria. The men carried out a type of courier fraud in which they pretended to be police officers, telling victims that their bank accounts had been compromised and needed to be transferred. -- BBC.com

--- Money-Laundering Regulations, Key Factors, Technology

US-centric Swift system straddles all USD transfers, EU,JP,Most of Global Banking System

NLP, MInd Control behind fraud

Arrogance

Greed - Rubbing Hands anticipating unearned gains

  • My ship has come in!

I am so smart vs Illiterate Nigerian

MOMO - Herd Instinct - Celebrity focus

FOMO is VERY common

Confirmation Bias

Ironically the fish who eat the worm will often rather continue their initial wrong decisions CONFIRMATION BIAS, rather than have second thoughts.

Don't Pitch the Bitch

Separate Target from the Herd - don't let them talk to others!

No written evidence

Create a sense of Urgency

Common Financial Scams and Fraud

Posing as Police or Tax Authority - Comply and Treat of "Legitimate" authorities

In the UK, a 75-year-old woman was tricked into handing over £60,000 to a "courier" pretending to be a police detective who persuaded the woman from Preston to send him money and gold by claiming it was needed as part of an ongoing investigation.

--- Avoid Banking Channels

Couriers to Pickup physical cash and Gold/Jewellery

To avoid dealing with proper banks and eliminate traceability there had been a series of courier frauds in UK often scamming vulnerable elderly people targeted for money over the phone first. Victims are usually phoned by someone claiming to be from Police "fraud teams" who tells them they have been the victim of fraud with a story such as their bank card has been used by someone else. While 60-95% probably hang up, all they need is a few percent of gullible (often greedy) victims. Ironically the fish who eat the worm will often rather continue their initial wrong decisions CONFIRMATION BIAS, rather than have second thoughts.


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