Links in “Financial Crime”

The AML Task Force, made up of eight government agencies, has taken upon itself the task of bettering the world of AML. During the ABA Conference, Under Secretary Cohen detailed the efforts that have been taken as well as future efforts, with an emphasis on the handling of money services businesses. [11/10/14]

NCUA has released the first five videos in an eight-part series designed to help credit unions detect and deter employee dishonesty and fraud. The videos, which can be viewed on the NCUA YouTube channel, address issues such as separation of duties, handling of employee and family member accounts and the red flags that may indicate fraudulent activity. [11/4/14]

NCUA has issued prohibition orders against two former credit union employees and one institution-affiliated party. In one case a credit union accountant stole nearly $200,000 form the credit union, while in another a craftier accounting assistant embezzled over $555,000. [11/3/14]

Part I of this financial crime story tells the tale of how a cautious CEO and her IT staff uncovered a series of linked fraudulent accounts. To be continued... [10/30/14]

The CFPB has student loan servicers squarely in its sights as a result of a recent review where the agency found a host of illegal activities including servicers that divided payments among loans in order to maximize late payment fees, overstating the minimum payment due on periodic statements, failing to provide borrowers with accurate tax information and making illegal debt collection calls. [10/29/14]

Generally, paying off your debts and putting money down on a house are wise financial moves. Not so when the money you’re using to do this belongs to someone else. A former employee at $23 million Belen Railroad Employees Credit Union in Belen, NM, has pleaded guilty to withdrawing $118,000 from member accounts without their knowledge to pay off her debts and to make a downpayment on a new home purchase. [10/28/14]

Three financial institutions reported this week that fraudulent credit and debit charges that occurred as a result of the Home Depot breach were chip-enabled transactions. Experts believe that fraudsters used a technique called “replay” where regular magnetic stripe card transactions are pushed through the card network as EMV purchases. [10/28/14]

NCUA CFO Mary Ann Woodson reported at yesterday’s Board meeting that 94% of the $30.4 million in losses to the NCUSIF this year resulted from fraud at 12 credit unions. The Board also announced that there will be no share insurance premium assessed for 2014. [10/24/14]

According to NCUA Chairman Rick Metsger, within the past 12 years there has not been a single case of a board member or supervisory committee member detecting the ongoing internal fraud that led to the failure of the institution. In almost every instance, internal fraud has been detected by an examiner, auditor, or outside party. Metsger urged CU Board members to be more active and involved and provided six "red flags" to watch for. [10/16/14]

Observant employees at Erie Community Credit Union in Erie, PA, spotted what they believed to be phony auto loans paid to a shell company. Law enforcement is now crediting these employees with helping to bring down a nationwide scam that caused losses to 21 financial institutions, including Navy Federal Credit Union. [10/14/14]