Briefings
MISHCON FRAUD WATCH
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01 December 2008
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Welcome to the December edition of Mishcon Fraud Watch, prepared by the Fraud & Insolvency Group at Mishcon de Reya. Its aim is to provide businesses and their advisors with a snapshot of what has been happening in the world of fraud in the last month.
We make no judgement whatsoever as to the morality, legality or appropriateness of the conduct which forms the subject matter of this bulletin. We simply aim to bring these matters to the attention of those involved in the prevention, detection and investigation of fraud.
United Kingdom
Banking and Finance
Michael Brown has been found guilty on charges relating to fraud and money laundering. Mr Brown failed to answer bail in June 2008 and was convicted in his absence.
City of London Police press release, 29 November 2008
National Fraud Strategic Authority (NFSA)
The NFSA has published a progress report on fighting mortgage fraud. The report identifies priorities for change, which include: designing out fraud risks in mortgage products, improving safeguards for lenders, increasing penalties for perpetrators and safeguarding the integrity of key professional sectors.
"Fighting Mortgage Fraud Together: A Progress Report" published by the NFSA, 28 November 2008
Serious Fraud Office (SFO)
The Scorpions, a specialist South African police unit, have raided the offices of BAE Systems near Pretoria. The raid is part of an ongoing SFO investigation into BAE Systems deals in Romania, Tanzania and the Czech Republic.
Russell Hotten
The Daily Telegraph, 28 November 2008
Three former employees of Welsh Slate, a subsidiary of Alfred McApline PLC, have been charged with fraudulent trading following an investigation by the SFO.
SFO press release, 5 November 2008
North America
Banking and Finance
The Securities and Exchange Commission has charged four individuals with engaging in a fraudulent scheme to overvalue the commodity derivatives trading portfolio at the Bank of Montreal, and thereby inflate the Bank's publicly reported financial results.
SEC press release, 18 November 2008
The Securities and Exchange Commission has filed insider-trading charges against Mark Cuban, a Dallas entrepreneur, for selling 600,000 shares in Mamma.com, a Canadian Internet search company, on the basis of non-public information concerning an impending stock offering.
SEC press release, 17 November 2008
Raoul Weil, chairman and chief executive of global wealth management at UBS, has been charged with tax evasion. UBS is subject to an ongoing investigation in connection with allegations that the Bank helped clients avoid taxes.
Michael Herman
The Times, 13 November 2008
Reports
According to a recent survey, US organisations lose an estimated 7% of annual revenue to fraud. This represents a total annual loss of approximately $994bn.
"Report to the Nation on Occupational Fraud & Abuse" published by the Association of Certified Fraud Examiners, November 2008
South America
Banking and Finance
A judge in the Netherlands Antilles island of Curacao has ruled that UK companies have the legal right to recover unpaid VAT held by the First Curacao International Bank. Bank accounts were frozen following allegations that they were being used in connection with missing trader fraud.
Michael Gillard
The Sunday Times, 30 November 2008
Mishcon de Reya
Mishcon's Fraud Watch is published by the Fraud & Insolvency Group of Mishcon de Reya Solicitors. Widely recognised as the leader in the field of fraud investigations, the Group has pioneered the use of financial fraud techniques in numerous fields, including the rapidly growing areas of theft of confidential information and counterfeiting. The Group founded and run both the Fraud Network, made up of international legal fraud specialists and the Financial Fraud Group, for risk and compliance officers.