Links in “Financial Crime”
- Fake Credit Union Operator Pleads Guilty to Fraud
Timothy Coughlin of Indianapolis has pleaded guilty in federal court to establishing fake credit unions that caused investors millions of dollars in fraud losses. In a wide-ranging scheme Coughlin set up two fake credit unions through which he accepted over $12 million in deposits from over 5,000 investors and depositors from June, 2007 to December, 2009. [6/26/14]
- Wire Transfer Fraud: Flying Under the Radar (at a Mere $1 Billion Per Year)
It doesn't get the publicity of the higher-profile cybersecurity breaches of retailers, but wire transfer fraud costs approach $1 billion per year with a simple ploy: bad guy gains access to a bank account, wires as much money as possible to another bank account, and tries to withdraw the stolen money before anyone notices. [6/25/14]
- DOJ to Banks: Enable Scam Artists and We’ll Come After You
U.S. Attorney General Eric Holder cites as an example a North Carolina bank that facilitated a third-party payment processor to process transactions reported as fraudulent in exchange for $850,000 in fees. The settlement included a $1 million fine and $200,000 to a consumer fraud fund. [6/24/14]
- Study: Cyber-fraud Resulting in Customer Attrition
Cybercrimes are taking their toll, with consumers losing confidence in financial institutions. 29% of U.S. consumers use their replacement cards less as a result of a fraud or breach. [5/23/14]
- BankSouth’s Win: A Study in the Importance of Reasonable Security Procedures
An employee of a business customer of BankSouth apparently fell for a phishing scheme, which allowed the bad guys to learn the user name and password of the employee. The business declined to use bank-offered "dual controls," which would require two separate employees to complete the transfer action, for the sake of convenience. When the business lost $588,000 in a cyberheist, it sued the bank and not only lost, but the court has said the bank can now pursue its legal fees against the customer. [6/23/14]
- Indictment: $76 Million Delinquent Bank Debt Scheme
A Florida man has been charged with bribing a U.S. Bank official with $1 million and running a $76 million fraud scheme involving the purchase and sale of delinquent debt portfolios from banks. [6/13/14]
- CFPB Kicks Kickbacks to the Curb
The CFPB ordered a New Jersey company to pay $30,000 for paying illegal kickbacks for referrals. Stonebridge, the company charged with violating RESPA, has allegedly paid more than 20 independent salespeople commission for bringing additional business to the company. The CFPB commented that efforts will continue to be made to protect consumers and to enforce RESPA's provisions will continue. [6/13/14]
- Felony Road: From Fraud to Faked Suicide
Former Georgia community banker pleads guilty to fraud for his role in the June 2012 failure of a bank, where he was accused of embezzling more than $21 million. He left a suicide note saying he planned to jump off a high-speed ferry, and when his body could not be found, he was declared dead. He was later arrested after a traffic stop in Georgia. [6/6/14]
- Debt-Relief Company Takes Access to Customers’ Bank Accounts
FTC charges California-based DebtPro 123 with deceiving customers. Company promised to settle debts and repair credit, but got direct access to debit their bank accounts and charged customers up to $10K, leaving them in even worse shape than when they started. [6/4]
- Bank Robbery: Not a Thinking Man’s Game
Bank robber in the Chicago area flashes knife, walks out with $87K, but not until after also filling out an account application using a state ID card and providing his social security number. [6/4]
