The charges involve the use of forged documents to get credit at one of Iran’s top financial institutions to purchase assets, including major state-owned companies.

“Owners of the Aria Investment Development Company … took the first step towards gaining wealth through using incorrect connections with executive and political elements and paying bribes … Dozens of instances of bribe payments to staff and managers of banks have taken place under various titles,” state TV’s website quoted the indictment as saying.

The indictment said company managers undermined the country’s economic security through engaging in organized fraud and paying large amounts of bribes to illegally accumulate several billion dollars.

“Not only did they prevent the progress and the increase of production and national wealth, they inflicted damage to people’s trust and healthy economic activity,” state TV’s website quoted the indictment as saying.

State TV said the top defendant has been charged with being “corrupt on earth,” an Iranian legal term meaning that the defendant is an enemy of God, and which carries the death penalty.

http://www.lasvegassun.com/news/2012/feb/18/ml-iran-bank-fraud/?hpap

In 2004, Ms Subramaniam allegedly helped herself to just over $72,000 over 21 fraudulent transactions. Then, in 2009, she has allegedly paid millions for goods at her favourite stores – jewellery store Paspaley, Chanel, Hugo Boss, Bulgari, and Georgio Armani. It is claimed she directly deposited more than $7.6 million from ING into Paspaley’s account this year, another $98,452 to Chanel and more than $3.3 million into Bulgari, court documents reveal. But the total bills at those were allegedly much higher – Paspaley, for example, sold her a whopping $16 million worth of pearls. Ms Subramaniam also allegedly used her maiden name to buy seven Sydney properties on her wild spending spree – four apartments on Bondi Beach, which together cost her $9.35 million, and three in Kirribilli with a price tag totalling $4.55 million. How about that for a shopping spree?

To the police she mentioned that her sloppy manager failed to notice any of the fraudulent transactions. The now 42-year-old bought eight apartments for more than $15 million but left seven vacant and didn’t charge rent on the eighth. She spent more than $11 million on jewellery she didn’t wear or even remove from the boxes. And she lavished gifts on shop assistants, including expensive pens, clothing and a payment of $1.3 million to help one worker buy a property, according to press reports.

During the trial, more details emerged:

“Each  of them (the sales staff) received commissions for sales to her, and giving presents to  them, in my opinion, is consistent with her wanting to be accepted and  praised,” Judge Finnane said. “Her gifts of $1.3 million to one  shop assistant and something like $240,000 to another shop assistant are  consistent with her wanting to be loved and accepted.” The judge  said everything she did in stealing the money and using the proceeds  “points to someone who got gratification from being able to be thought  of as wealthy and generous”. He referred to her having frequent  sex with an ING supervisor and to her husband’s statement that he joined  in the sexual activity, which sometimes happened between them in motel  rooms or at their home. Subramaniam claimed to police that the  frequent sexual intercourse she had with the employee at work was part  of her ill treatment by staff. “She claims that part of the reason for engaging in fraud was resentment towards ING and her wanting revenge,” the judge said. The judge said while the sexual activity may have been abusive in her mind, it appeared to have been consensual. While she was not mentally ill, she had mental disorders that needed intensive counselling, he added. He set a maximum term of 15 years

All of this raised concerns about the internal controls at ING, and possibly at other banks.

http://www.riskmagazine.com.au/article/ing-30m-fraud-loss-highlights-internal-security-risks-122353.aspx

http://www.sbs.com.au/news/article/1625462/ing-accountant-jailed-for-45m-fraud

http://www.dailytelegraph.com.au/news/sydney-nsw/rajina-rita-subramaniam-gets-15-years-for-defrauding-ing/story-fn7y9brv-1226267620216

What happened with the criminal case against Holenweger ? Not enough evidence, according to the judge. A blow to prosecutors in this high profile case. Details on the Alstom case will follow as they pop up.

http://bit.ly/gigJp3

http://bit.ly/fWoHEB

http://bit.ly/dfiQqA

http://bit.ly/fn1TD3

http://financialcrimeonline.com/archives/875

http://bit.ly/dfiQqA

From the information that surfaced, ‘ Eaglewood’  probably started in 2007 when undercover detectives were following two convicted drug dealers to an unknown individual, who was later identified as Eyad Iktilat. After being arrested, one of them was found to have been carrying over 1,36 million euros in a bag.

Iktilat appeared to be a big fish, with plenty of luxury cars and real estate. Royal Oak Taxis, a rundown, fortified garage and cafe was run by Israeli-born Iktilat.  He was also a director of the nearby Euro Foreign Exchange, through which up to £1m a day in drug money would be laundered.

Iktilat, of Euston, north London, denied counts of money laundering, conspiracy to supply cocaine and cannabis, and possession of cocaine, but was convicted after a five-month trial. Initially jailed for 21 years, his sentence was increased to 30 on appeal. “He did not believe he was doing anything wrong. He believed he was acting as a bank,” said an officer. In two years, an estimated £100m passed through the ramshackle breeze-block taxi building. It was then taken to the bureau de change. There, manager Jean-Claude Frigieri, 56, of West Molesey, Surrey, bought up to €450,000 at a time, sometimes several times a day, from a bank note wholesaler called Interchange, which had no idea about his criminal dealings. He was convicted of money laundering and jailed for 10 years.

The money laundering consisted of buying 500 euro notes at Euro Foreign Exchange with drug money; the first stage in concealing the dirty origin of the money. And a perfect way to reduce the weight and volume of the drug money. Did you hear that Colombian cartels prefer 500 euro notes as payment for supplying cocaine rather than $100 notes?

The Guardian reports that Iraqi refugee Maythem al-Ansari was the main banker. When police swooped on his £3m west London home they had to use a digger and angle grinders to smash through a fortified security wall. He arrived in Britain in 1999 as Mithum Mohammed, later changing his name to al-Ansari, a famous banking name in Saudi Arabia. He worked as a bus driver but swiftly built up a multi-million-pound property empire. By 2004 he was investing in restaurants and vineyards and specializing in properties in Park Lane and Mayfair. The 42-year-old used business links to lend an air of legitimacy, and could exchange large amounts without attracting suspicion, making him the perfect cover for someone to change large amounts of cash into euros.

For a 5% ‘ introduction fee’ criminals could use the money laundering services of the taxi company, being the exchange to 500 euro notes. Details on the use of the notes were not made public, but you can assume they were used to pay for the cocaine on one hand, and used to invest in real estate and other goods for the criminals themselves on the other. Only a couple of criminals actually build up a ‘ legitimate’  business with dirty money. Most of them just try to find ‘clever’ ways to enjoy their lifestyles without being caught in the web…

Among the sentenced was a London ‘hero’ fire fighter, commended for his role in the bombing response, who was going down in the aftermath of the London bombings. He was on sick leave suffering from ‘ stress’ .  Owning two audis and leading a ‘ champagne lifestyle’ , some people had some doubts about the ‘ stress’ . He was however arrested while putting 100 kilogram of cocaine in smaller bags. The drugs had been picked up from a beach in the a coastal town the previous night, having been smuggled from continental Europe on a rigid-hulled inflatable speedboat. Try to talk you out of that one; that must be stressy.

http://www.bbc.co.uk/news/uk-12120309

http://www.bbc.co.uk/news/uk-11930487

http://www.guardian.co.uk/world/2011/jan/05/police-smash-london-drug-gangster-syndicate

http://www.policeprofessional.com/news.aspx?id=11787

According to the court document, Hertz and co-conspirators engaged in a bid-rigging conspiracy from at least as early as October 2001 until at least November 2006.   As a part of the bid-rigging conspiracy, Hertz and co-conspirators designated in advance which co-conspirator provider, either his employer or another financial institution, would be the winning bidder for certain investment agreements or other municipal finance contracts.   Hertz and co-conspirators also agreed to submit intentionally losing bids for investment agreements or other municipal finance contracts that were steered to other financial institutions, giving the false appearance that these deals had been bid competitively in accordance with relevant U.S. Treasury regulations, or the requirements of the municipality.

According to the court documents, Hertz also participated in a fraud conspiracy with a broker located in Minnesota from as early as 1998 until at least November 2006.   As part of this conspiracy, the broker gave Hertz information about the prices, price levels or conditions in competitors’ bids, a practice known as a “last look,” which is explicitly prohibited by U.S. Treasury regulations.   On some occasions, the broker signaled Hertz to change his bids to specific numbers so that his employer could make more money.   Hertz and co-conspirators also submitted intentionally losing bids to the broker for certain investment agreements to make it appear that his employer had competed for those agreement or contracts, when in fact, it had not.   As a result of the bid manipulation, Hertz’s employer won investment agreements and other municipal finance contracts at artificially determined price levels, which deprived municipal issuers of money and property.

We have seen quite a lot of bid rigging and price fixing (“gentlemen’s”) agreements in construction and infrastructure projects, cargo shipping and manufacturing.

In the Netherlands, the antitrust authority (NMa) is looking into possible price rigging in the mortgage market. Profit margins on Dutch mortgages are unusually high in Europe, according to a report by the Netherlands Competition Authority (NMa). The mortgage market is in the hands of a few big banks (sounds familiar?). Since July 2009, the interest rate margin, which is the difference between a bank’s borrowing costs and lending rate to consumers, has risen between 30 to 100 basis points, NMa said. “Since mid-2009 the margin in the Netherlands for mortgages with a fixed interest rate period between five to 10 years has been on a high level, both historically as well as compared with Belgium, Germany and France”. The Dutch banking association NVB said it was confident about the outcome of the NMa’s investigation, which will be completed in the spring of next year. NMa invited banks and other parties to react to the findings.

We will bring you updates and new interesting news as it comes along..

http://www.justice.gov/atr/cases/f264700/264760.htm

http://blogs.forbes.com/billsinger/2010/12/01/hertz-bid-rigging-plea/

http://www.justice.gov/opa/pr/2010/November/10-at-1366.html

http://www.rnw.nl/africa/bulletin/profits-dutch-mortgages-%E2%80%9Csuspiciously%E2%80%9D-high

http://www.reuters.com/article/idUKLDE6A012620101101

This week the Miami Herald reported that Wachovia is being sued for $68 million by investors in a Ponzi scheme run by Theodule. He banked with Wells Fargo (now part of Wachovia). The lawyer of the victims claims that the bank did not take any precautions when it onboarded the client. The fraudster switched from Wamu to Wachovia. At that time, according to the lawyer, a simple phone call to Wamu would have revealed that the transactions on the account did not make any business sense. In its client due diligence, the bank did not found out that Theodule wasn’t registered as a broker with the Financial Industry Regulatory Authority and wasn’t licensed in any way at all, said lawyer Perlman, who was appointed by the court to manage Theodule’s companies and try to collect funds to repay victims.

Within a month of Theodule opening several accounts at Wachovia, 36 investment clubs opened accounts at Wachovia, too, Perlman said, injecting some $2.2 million into those accounts. “How much came in just from those investment accounts — that should have set off every bell and whistle,” he said. Transactions between those accounts and Theodule’s should have been another red flag for Wachovia, he said. “The transactions show no investing at all. The money just circulates around,” Perlman said. In addition, Theodule took out large cash withdrawals, spending the money on jewelry and travel, he said. Wachovia even made special arrangements for one of Theodule’s employees to collect bags of cash through a bank drive-through, Perlman said. All together, Theodule withdrew more than $1 million in cash and more than $700,000 for personal expenses, the suit says.

“Why would a bank allow an investment advisor to take it out in cash? Anybody sitting there would instantaneously say `This is suspicious. We need answers. Not only answers, but documentation. This could be money laundering’,” Perlman said. “Whatever it is, it’s not a business that’s consistent with any business I’m familiar with, or the business he purported to be.”

In the Madoff case, victims follow the same route and sued HSBC, UBS, Santander and RBS for billions to recoup their losses. According to their lawyers, HSBC helped funnel more than 8.9 billion US dollars to Madoff through a dozen so-called feeder funds based in Europe, the Caribbean and Central America and ignored warnings from its own accountants that his phenomenal investment record was suspect. In the case of UBS, investors (now?) claim that the name of UBS in the prospectus made them decide to invest with Madoff:

“Without UBS’s serving as promoter, custodian and administrator, “Madoff’s fraud would have been diminished in both scope and duration”

JP Morgan won a similar suit.According to the US District judge:

“While it might have been possible for defendants to determine that Madoff was committing fraud from the ‘red flags’ that plaintiff points out, plaintiff alleges no facts to demonstrate that defendants actually did make such a discovery..”

In their legal battles, victims also zoom in on accountants (PWC Canada) and regulators (SEC). The main question in all these suits is: what can you reasonably expect from accountants, banks and regulators? That question has already been answered by the victims: we want our money back, no matter what and we don’t really care who writes the check. Plenty of business for now..

http://www.miamiherald.com/2010/12/30/1993428/bank-accused-of-overlooking-fraud.html

http://www.breakingnews.ie/business/madoff-victims-sue-bank-484511.html

http://www.ft.com/cms/s/0/6d4e8386-ec73-11dd-a534-0000779fd2ac.html#axzz19lXpjkZK

http://www.cbc.ca/money/story/2010/11/24/madoff-ubs-lawsuit.html

http://www.newsdaily.com/stories/tre6ba1ce-us-madoff-abnamro/

http://financialcrimeonline.com/archives/644

http://www.businessweek.com/news/2010-07-15/jpmorgan-wins-dismissal-of-madoff-victim-s-lawsuit.html

http://www.krone.at/Nachrichten/Banker_zweigte_in_Eisenstadt_mehr_als_8_Millionen_Euro_ab-2_Jahre_unbemerkt-Story-238189

http://kurier.at/nachrichten/burgenland/2059748.php

Other transactions that probably are under investigation involve the oil business. Some of the money that was transferred to Switzerland is believed to have come from illegal commissions and other fraudulent means between 2000 and 2005, when he presided over the KazTransOil state company, according to Bruno de Preux, the Geneva lawyer who is representing a group of Kazakh citizens “opposed to state corruption”.

Some months ago, the Kazakh financial police investigated him on corruption allegations to no avail. In June 2010, embezzlement accusations against Kulibayev were ruled groundless by an Almaty court.

http://bit.ly/h7BXyC

http://bit.ly/hcVW4q

http://bit.ly/i53kPb

http://www.bbc.co.uk/news/world-latin-america-11193687

BadB is charged with helping to create and use illicit on-line forums to make fast and easy transactions to sell stolen credit card information to those seeking the information to finance fraudulent transactions.  According to the indictment, he used the online name “BadB” to advertise and sell stolen credit care information via such online forums.  Under the scheme, potential purchasers would create accounts on a website run by BadB. The site was designed to facilitate the exchange of money for stolen credit card information. Secret Service agents infiltrated the network by posing as buyers and purchasing the stolen credit card information.   “The network created by the founders of CarderPlanet, including Vladislav Horohorin, remains one of the most sophisticated organizations of online financial criminals in the world,” said US Secret Service Assistant Director for Investigations Michael Merritt.

Wired posted one of BadB’s cartoons that outlines his services; check it out. Guess who’s smiling now?

http://www.wired.com/threatlevel/2010/08/badb/

http://www.pcworld.idg.com.au/article/356695/russian_charged_selling_credit_card_numbers_online/

http://financialcrimeonline.com/archives/692

http://financialcrimeonline.com/archives/902