Card counters ace fraudsters, consumers are investigating fraud more quickly

Forensic Accountants frequently analyse credit card data as part of a fraud investigation

Forensic Accountants frequently analyse credit card data as part of a fraud investigation

For years scammers have been swiping ever-increasing fortunes from unsuspecting consumers.

But technology finally appears to be catching up with the fraudsters that prey on Australians with debit and credit cards.

Industry figures indicate the amount Australians are losing to card fraud has slipped this year as measures to fight overseas online swindles take effect.

According to the Australian Payments Clearing Association, fraud accounted for 15.6c in every $1000 of spending last financial year.

This was down from 16.3c for the 2011 calendar year.

While the number of fraud transactions increased slightly to 1.2 million in the year to June – up from 1.15 million in the year to last December – the total value of the transactions fell.

Fraudulent transactions totalled $284.5 million in the year to June, down from $301.6 million in the period to last December.

Fraud investigation rates peaked in the six months to last December after a spike in overseas fraudsters targeting Australian card data.

Counter-measures have been in place for more than six months and we can see this coming through in this financial year data” association chief Chris Hamilton said. “We have actually seen a decline in card fraud in the first half of 2012.

The figures showed cheque fraud rates continue to fall and now account for less than 1c in every $1000 paid by cheque.

Fraud on proprietary debit cards – where a PIN is required at a till – was flat at 4.9c in every $1000 worth of payments. Fraud on scheme credit, debit and charge-cards – where a signature is permitted or the card is used remotely – fell from 96c to 87.7c.

Australian Bankers Association chief executive Steven Munchenberg welcomed the trend, saying consumers were increasingly aware of the risks and banks were now quicker to respond to suspicious transactions.

(Source: Jane Harper, Herald Sun, 12 December 2012) 

Further Information – Forensic Accountant

Forensic Accountants frequently analyse credit card data as part of fraud investigations

If you would like further information about using our forensic accounting services for a financial investigation or other expert witness matter, then please contact us on (02) 8019 7262 for an obligation free discussion.

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Marketing employee charged over $300,000 fraud

A Sydney man allegedly used his employer’s credit card to splurge $127,000 on holidays, electronic goods and other personal items.

The 25-year-old, from Darlinghurst, is also alleged to have siphoned more than $189,000 from the CBD-based marketing firm that he worked for, into his own account.

Police arrested the employee yesterday afternoon following a month-long investigation.

He was charged with fraud offences and is due to appear at Sydney’s Central Local Court today.

Detectives were tipped off about the offences, said to have occurred between April 2011 and March 2012, when the marketing firm noticed irregularities in its accounts.

Source: AAP, SMH 05/04/2012

About Rushmore Forensic

Andrew Firth is a director of Rushmore Group. He has conducted numerous investigations and other forensic accounting engagements in Australia, Singapore, the UK, Thailand, Hong Kong, Vanuatu, and the USA.

He is a former investigator with the Serious Fraud Office in the UK and specialises in complex financial investigations and providing other forensic accounting services.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions. To arrange an appointment with Andrew please call (02) 9954 6200.

 

Top former art dealer faces 87 charges after fraud probe

One of Australia’s former leading art dealers, Ronald Coles, faces up to 10 years in jail after being charged today with 87 offences relating to an alleged multi-million investment art fraud scheme.

Art Dealer, Ronald Coles charged with fraud in Gosford

Coles, 64, was ordered to appear at Gosford Police Station today (10am), where Fraud Squad detectives formally charged him following an “extremely protracted and legally intricate” two-year investigation into his business affairs.

Under the Crimes Act, Coles was charged with 77 counts of “larceny as a bailee” and a further 10 counts of “director/officer cheat or defraud”.

For more than 30 years, Coles specialised in fine art by some of Australia’s most celebrated artists including Sir Arthur Streeton, Eugene von Guerard, Brett Whiteley and Norman Lyndsay.

Advertising on national radio and television, he offered clients an opportunity to boost their lifesavings through the purchase of investment art which he bought and sold on their behalf, using their superannuation funds.

NSW Police launched Strike Force Glasson in January 2009 after a Fairfax investigation unearthed dozens of investors who were missing millions of dollars in lost art and money, all allegedly retained by Coles.

Today’s police charges relate to more than $8 million in financial loss to a total 43 clients nationwide.

Coles’ failed to make conditional bail of $50,000. It is understood he offered a car and paintings as surety but it was refused. He is due to appear at Gosford Local Court shortly.

(Source: Eamonn Duff, SMH, 16/1/2011)

Queensland Government’s criminal history checks fail to pick up third public servant

FRESH concerns have emerged over the State Government’s ability to vet staff after revelations that a third public servant with a criminal history has been discovered this year.

Criminal Background Check

Just days after revealing a man who allegedly embezzled $16 million from Queensland Health had a criminal history in New Zealand, The Courier-Mail has learnt that Corrective Services has hired a prison guard convicted of drug and weapon offences.

The guard was handed a job because a person ticked a wrong box during the check process.

Jennifer Dann was employed full-time by Queensland Corrective Services in July and worked at the Brisbane and Woodford correctional centres.

Dann was sacked three months later but only after concerns from an outsider were raised that a woman with her criminal history would be allowed to guard prisoners.

This follows a blunder in March when a Croatian man on Interpol’s most wanted list was discovered working as a state government security guard after 18 months patrolling the executive building and courts.

The Government does not undertake its own criminal checks, rather it sends names of applicants to the Queensland Police Service, which runs them through the national criminal database Crimtrac. The information is returned to the departments for their assessment.

According to court records, Dann has a conviction recorded at Caboolture Magistrates Court in 2000 for possession of a dangerous drug and weapon as well as secure storage of a weapon.

Acting Corrective Services Commissioner Marlene Morrison acknowledged the error and said the check did pick up her history and her job application was rejected. However, an administrative error resulted in Dann’s employment after she sought a review.

Ms Morrison said Dann worked full-time at Brisbane Correctional Centre and Woodfood Correctional Centre for three months but was sacked the day after they found out.

A review of the criminal history checking established that an administration officer mistakenly ticked the incorrect box on a form” she said.

Ms Morrison said there was no evidence of impropriety during Dann’s tenure, but did not say if other people with criminal histories had been employed as prison guards.

In similar circumstances, the Department of Public Works only became aware of the past of security guard Marino Katalinic, 36, after he held his job for 18 months.

He was sacked on May 31 this year after he was found guilty of impersonating a police officer and The Courier-Mail revealed he was wanted by Croatian authorities over drug and theft convictions from 2004.

Responding to the Government’s failure to pick up on Morehu-Barlow’s criminal history, Police and Corrective Services Minister Neil Roberts this week acknowledged flaws with the system.

The three cases raise serious questions about the State Government’s handling of employees’ criminal checks.

The latest revelations come as three senior health managers were stood down on full pay by Queensland Health yesterday pending an investigation into the failure to detect the illegal transfer of millions of dollars.

But the decision sparked fresh calls for Health Minister Geoff Wilson to be sacked as the Opposition insisted the Bligh Government had a long record of blaming only bureaucrats.

Police have charged Brisbane socialite and Health purchasing officer Joel Morehu-Barlow with one count of defrauding the department of $11 million.

An investigation last year cleared him of any wrongdoing despite a detailed complaint, while payments of $4 million to a trading entity set up by Morehu-Barlow are outlined in the department’s annual reports.

(Courier Mail, Alison Sandy and Steven Wardill, 15/12/2011)

Accused Queensland Health fraudster Joel Morehu-Barlow lived it up with $11m lifestyle

WHILE accused fraudster Joel Morehu-Barlow sits in a solitary jail cell at Wacol prison an entertainment package worth nearly $100,000 is en route from Europe for him.

Accused Fraudster Queensland Health

Accused Fraudster Queensland Health

Only days before the accused fraudster became the state’s most-wanted man and was eventually charged with defrauding $11 million, he was having the time of his life, enjoying a lavish spending spree.

The 36-year-old purchased an opulent $5.65 million River House in the new Pietra development at Moray St, New Farm, and paid for it in full.

But the spending didn’t stop there – his extravagant lifestyle was just beginning.

Court documents reveal Morehu-Barlow went on to purchase items including a top-of-the-range 2.15m 3D TV described as one of “the most expensive sets ever produced”.

He purchased the TV and associated accessories for $95,070 from Bang and Olufsen’s Fortitude Valley store. But little did he know the exclusive entertainment package which was sent from Denmark was due to arrive in Australia when he would behind bars.

The goods will be seized once they arrive in Australia.

During his short-lived spree he also purchased a luxury Mercedes-Benz and two top-of-the-range jet skis.

He also bought an elaborate, grey, 2009 Mercedes-Benz C63 AMG sedan for $135,214.

He then went on to buy two Sea-Doo jet skis at Brisbane Jet Skis at Zillmere on Brisbane’s northside.

One was a luxury performance model and the other a sports model, together costing more $42,000.

But he had little time to use his new plush toys, he would be arrested by police only eight days after he bought them. Documents show the self-proclaimed Tahitian prince was known by various names including Hohepa Morehu-Barlow, Joel Barlow, Joseph Barlow and Joel Hikairo Morehu-Barlow.

In the documents it reveals he held eight bank accounts with more than $1.5 million in them and another account in his company’s name which had a healthy balance of $2.91 million.

He also owned another two luxury cars – a grey, 2009 Mercedes-Benz C63 AMG sedan and a 2004, silver BMW 530i sedan.

Morehu-Barlow was also interested in music and art and had a selection of paintings and a baby grand piano.

(The Courier-Mail, Sophie Elsworth, 16/12/2011)

$1.96m Financial Planner Fraudster gets long jail sentence

Ponzi operator Simon Finnigan, who defrauded investors of $1.96 million while he lived the life of an apparent millionaire businessman, has been sentenced to 10 years jail in what the sentencing judge said was one of the toughest terms imposed for a Ponzi scheme offence.

Financial Planning Fraudster Simon Finnigan

Some of the investors sitting in the NSW District Court wept with relief as Judge Michael Finnane told Finnigan he was sentencing him to 10 years jail, with a six-year non parole period.

Judge Finnane said the requirement to protect the community sometimes called for a longer sentence.

‘I think this is called for in this case because I see not the slightest evidence (Finnigan) has any appreciation of all the damage and destruction he has caused.

Finnigan sat impassive as the judge said the sentence ”may seem to be one of the toughest ever imposed”.

Finnigan was not licensed as a financial planner, nor did his many companies – most noteably Financial Partners Pty Ltd – have any financial licenses.

He promised Financial Partners Pty Ltd would invest in shares, derivatives, property and in one case – Biotech Solutions Pty Ltd – a revolutionary water product that when listed on the stock exchange would produce huge windfall gains. He gave personal guarantees, and promised up to 15 per cent return.

Instead the money went on paying his personal credit card expenses, for overseas travel, the running costs of his business, and on interest to earlier investors. He pleaded guilty to nine charges spanning 2001 to 2007.

BusinessDay has confirmed with other investors that the extent of losses is much larger than the $1.96 million Finnigan was charged with and pleaded guilty to.

Finnigan was taken into custody in court. Justice Finnane said he would recommend to custodial authorities that Finnigan be assessed for entry to a minimum security prison.

Sourced from: http://www.smh.com.au/business/conman-gets-long-jail-sentence-20111216-1oyf1.html#ixzz1gfqsdXsJ, Leonie Lamont, December 16, 2011

Accountant in $45m Banking Fraud

Rajina Subramaniam defrauded her employer of $45 million.

Castle Hill Accountant in $45m Fraud

THE diamonds and sapphires were stored under her desk and never worn, the four multimillion-dollar beachside apartments left unattended.

And when detectives finally came to arrest the Sydney mother Rijina Rita Subramaniam for defrauding her employer of $45 million, not one of the luxury items she had bought with the money was among her personal possessions.

In one of the largest cases of fraud by a woman in NSW history, Subramaniam repeatedly siphoned off tens of thousands of dollars from ING Australia, where she was an accountant for more than a decade.

The 41-year-old from Castle Hill spent the money on seven prestige properties – including four units on Bondi Beach’s exclusive Campbell Parade – 600 pieces of designer jewellery, and 200 perfume and make-up items. But then she never touched them.

Yesterday the Downing Centre District Court was told that Subramaniam was motivated, not by greed, but by a desire for revenge over the allegedly abusive sexual relationship she was having with a workmate, and an overwhelming need for positive affirmation.

Subramaniam’s sentencing hearing heard that she had extremely poor self-esteem, due in part to the sexual abuse she allegedly experienced as a child at the hands of her grandfather and two uncles.

After getting involved with a colleague at ING, she came to perceive the relationship as abusive but continued to see the man for years. This alleged abuse and the feeling that her supervisors were bullying her led to a desire for revenge and to ”get back at the system and others within the system”.

According to Dr Stephen Allnutt, who was called as a witness for the defence, the flip-side of these feelings was a powerful desire for recognition and empowerment, desires that were fulfilled by spending money.

Judge Michael Finnane said that Subramaniam appeared to gain satisfaction from ”being applauded by [shop] assistants [who said] ‘how wonderful you’ve come back to us again, a wealthy woman like you and a woman of such discrimination and taste … we’ll only show you the very good stuff because you’re someone very special”’.

So grateful was she for the warmth and attention, Subramaniam gave one shop assistant $1.3 million to buy a house.

Subramaniam’s lawyer, Tim Game, SC, said Subramaniam should not be jailed because she would not be able to get the psychological care she needed.

Judge Finnane will hand down his sentence in February.

Sourced from: www.smh.com.au/nsw/womans-quest-for-selfesteem-and-revenge-cost-boss-45m-20111215-1owya.html#ixzz1gfN8sApi, Paul Bibby Courts, 16/12/2011. Image courtesy of stuff.co.nz

$16m Queensland Health ‘fraudster’ arrested

Police have arrested the man accused of embezzling $16 million from the Queensland government.

Hohepa Morehu Barlow

Alleged Queensland Health Fraudster

The manager of the finance division at Queensland Health’s Community Services Branch allegedly siphoned the millions from Queensland Health into private accounts over the past three years.

Police Minister Neil Roberts told ABC News Breakfast Hohepa Morehu-Barlow, also known as Joel Barlow, was arrested this morning when he tried to enter a New Farm unit.

“In the early hours of this morning, a little after 3.30am I understand, the alleged offender presented himself and tried to get into a unit and they were able to apprehend him,” Mr Roberts said.

The individual has been taken into custody and is undergoing questioning.

Queensland Premier Anna Bligh this morning welcomed news of the arrest, praising police for “getting their man“.

However, she said it was not the end of the matter and the government was working to close any loopholes that allowed $5 million to be taken from public purse over the past three years and $11 million in the past fortnight.

This is just the beginning” she said. “It is unacceptable that this could happen and we are working to close any loopholes that exist“.

Police have not laid any charges against Mr Barlow yet.

Officers were yesterday investigating leads that members of the public had provided to Crime Stoppers.

Mr Barlow had just a small window of opportunity to give police the slip on Thursday afternoon, when the alleged theft first came to light.

Police raided his luxury $5.65 million riverside apartment in New Farm on Thursday evening, but there was no sign of the man who led a lavish lifestyle in Brisbane’s high-society and claimed to be a Tahitian prince.

It’s understood investigators may have missed the public servant by a matter of minutes.

Yesterday Ms Bligh said she was confident the state could recover the stolen money.

She confirmed $12 million of Mr Barlow’s assets had been seized by police and would be held during legal proceedings against him.

She admitted the checks and balances that should have prevented the alleged fraud had clearly failed, but she stopped short of saying whether heads would roll.

I’m having all of that investigated by external forensic auditors and if there are people who have failed in their duty, then action will be taken against them” she said.

Senior government and Queensland Health officers, including the auditor-general, met with the Crime and Misconduct Commission on Saturday.

They were trying to piece together how the alleged fraud occurred and what lessons could be learned to prevent it happening again.

Ms Bligh dismissed allegations that Queensland Health had ignored an auditor-general’s report earlier this year that found public sector agencies were failing to maintain basic financial controls.

Queensland Health had implemented every single recommendation made in the report, she said.

“There has been no specific recommendation or commentary in relation to the financial processes within this part of Queensland Health,” she said.

Ms Bligh also dismissed the suggestion that the alleged fraud highlighted problems within Queensland Health, which was still reeling from the payroll bungle of 18 months ago.

Meanwhile, Mr Barlow’s New Zealand family said it was not aware of the allegations but intended to stand by him.

He’s a naughty boy if he’s done that, but he’s still my whanau [family],” Mr Barlow’s aunt Josie Boldy told New Zealand’s Sunday News.

Source: www.brisbanetimes.com.au/queensland/alleged-queensland-health-fraudster-arrested-20111212-1oq27.html#ixzz1gGoCj8EL and AAP. Image Courtesy of The Australian.

Sydney bank manager accused of stealing $4m from customers’ accounts

A bank worker has allegedly stolen more than $4 million from customer accounts over an eight-month period.

The 35-year-old woman, who was employed as a manager of a banking corporation, allegedly stole the funds from customer bank accounts between December 7, 2009 and August 20, 2010.

She accessed the accounts and transferred funds into her personal bank account before transferring the funds into foreign currency.

In total, police allege she defrauded the bank of $4.1 million.

Police were notified about irregularities by the bank and began an investigation.

She went to a police station with her lawyer today, and was charged with two counts of obtaining money by deception and three counts of dishonestly obtaining financial advantage by deception.

The woman was granted strict conditional bail to appear in the Downing Centre Local Court on January 17.

Police said her employment with the banking corporation had been terminated.

Source: AAP, 24 November 2011

Property finance founders to face court in Sydney

The two founders of the property finance company Australian Capital Reserve will face a committal hearing on criminal charges related to the $332 million collapse of the company.

Samuel Pogson, 49, from Wahroonga, and Murray Lapham, 48, from Turramurra, have been on bail since they were charged in March with one count each of making a false statement to obtain a financial advantage for ACR.

Mr Pogson was later charged with a second offence of making or omitting a matter from a document to make it misleading.

Both men, who are due to appear in the Downing Centre Local Court for the day-long hearing, are accused of misleading investors in their sixth prospectus lodged on April 7, 2004.

The prospectus claimed that ”as at December 31, 2003 the [parent company] Castle Investment Company Limited and controlled entities’ profit before income tax was $7,409,483”, court records state.

Both men are accused of knowing this statement was false or misleading because the pre-tax profit ”took into account sales revenues that were not transactions that had properly occurred prior to 31 December 2003”.

The charges against the two former real estate agents were brought by the Australian Securities and Investments Commission. Two ASIC investigators served the men with court notices in March.

ACR, a subsidiary of the Estate Property Group, raised so-called ”mezzanine” or second-ranking development finance from small investors using deposit notes paying interest of as much as 10 per cent a year.

(Source: Vanda Carson, SMH, December 1, 2010)

About Rushmore Forensic

Andrew Firth is a Director of Rushmore Forensic. He has worked on a number of investigations tracing property financing transactions and other alleged frauds involving mortgage brokers.  He has also acted as an expert witness in property and money tracing related cases.

He is a forensic accountant based in Sydney. Andrew can be contacted directly for a confidential and complimentary discussion.