Latest news with #financialcrime
Arab News
2 hours ago
- Business
- Arab News
Fraud control room: A key proactive prevention measure
In response to growing concerns over the scale and sophistication of financial fraud globally, the Council of Ministers has approved the creation of a dedicated operations room tasked exclusively with combating such crimes in Saudi Arabia. This move reflects increased awareness of the significant economic and social impacts of financial fraud and the urgent need for a specialized, well-equipped body to address complex misconduct. By establishing this operations room, lawmakers aim to strengthen institutional defenses, restore public trust, and ensure greater accountability across financial systems. According to Nasdaq Verafin's 2024 Global Financial Crime Report, illicit funds flowing through the global financial system were estimated at $3.1 trillion in 2023. Of this, money laundering played a major role in enabling various crimes, including $346.7 billion tied to human trafficking, $782.9 billion linked to drug trafficking, and $11.5 billion in terrorist financing. Fraud scams and bank fraud schemes also caused an estimated $485.6 billion in global losses in 2023. In the Arab world, a study by Naif Arab University for Security Sciences, in cooperation with Interpol, revealed that daily visits to fraudulent websites by individuals of Arab nationalities exceeded 137,000. The study also identified five major types of financial crimes prevalent in Arab countries: Investment fraud, business email compromise, romance fraud, sextortion, and phishing. It further outlined 24 criminal methods used by fraudsters to trap victims. Prominent tactics include impersonating bank employees to extract sensitive information, exploiting artificial intelligence in fraudulent ad campaigns, using trusted online platforms to post fake ads, and employing cryptocurrencies to conceal fund trails. Given these findings, the establishment of a dedicated financial fraud control room is crucial to proactively enhance coordination among authorities and strengthen efforts to combat financial crimes. This initiative will enable swift responses to fraud-related distress calls, improve recovery of stolen funds, enhance tracking of perpetrators, and ensure the enforcement of legal and regulatory penalties, especially in cross-border cases. The control room will also streamline information exchange between authorities, overcoming challenges such as slow processes and poor coordination. By fostering more efficient collaboration, it will allow officials to intervene early and prevent fraud from escalating. Additionally, the control room will introduce electronic reporting systems, making it easier for victims to report fraud quickly, thus increasing the chances of stopping scams and recovering stolen funds. This initiative underscores the critical need to raise public awareness about fraud prevention and strengthen regional and international cooperation against a crime that transcends borders. The establishment of this specialized unit also aligns with Vision 2030, which aims to bolster cybersecurity and protect the national economy, financial systems, and monetary institutions from fraud and cyber threats. While creating a dedicated financial fraud control room is essential, preventing fraud is a shared responsibility that extends beyond government entities to all individuals — citizens and residents alike. Raising public awareness and vigilance is crucial. People must be cautious of suspicious messages, unsolicited investment offers, and unlicensed entities posing as investment firms. Moreover, individuals should avoid sharing personal or banking information outside official channels and remain alert to calls from those claiming to represent financial institutions requesting confidential details. Legitimate bank representatives will never ask for sensitive information such as PINs or passwords. • Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz
Yahoo
9 hours ago
- Business
- Yahoo
'Truly evil': Door County man gets max sentence for defrauding clients of $1.1 million
STURGEON BAY - An 81-year-old town of Nasewaupee man received the maximum sentence allowable for his conviction on 15 felony charges of defrauding almost two dozen elderly Door County residents out of more than $1.1 million in his role as their financial planner and tax preparer. Dale Forrest Pautsch was sentenced May 29 by Door County Judge Jennifer Moeller to a total of 15 consecutive years in a state prison, one year for each of the 15 counts, which includes a modifier for crimes against an elderly or disabled person. He also will serve another 15 years of extended supervision, again one year consecutively for each count, when and if he is released. Pautsch also is prohibited from owning or operating a business, working as a financial adviser or tax preparer, and handling anyone else's money or checks. His assets, which include a home in Nasewaupee and a business he bought and ran with proceeds from his crimes, the Little Brown Jug tavern in the town of Gardner, were seized after he was convicted and are going on auction to help Pautsch make financial restitution to his victims. It was revealed in court during the sentencing hearing that the pre-sentence investigation of Pautsch recommended he be sentenced to three to four years in prison, citing his age and that he seemed to show remorse and take responsibility for his actions. But nine people who were victims of Pautsch gave impact statements in court, along with one letter read aloud by District Attorney Colleen Nordin, that said they were devastated by Pautsch's crimes against them, not just because of their financial losses – one woman lost more than $610,000, another person more than $100,000 and eight people between $10,000 and $100,000 – but also because of extreme emotional and mental distress. Several asked the court to sentence Pautsch to at least enough time that would essentially become a life sentence for the 81-year-old. "Dale took our money, took our life, took my trust, my spirit," a victim named Joann said in court (last names of victims who gave statements were not given to protect their identities), adding that Pautsch took advantage of working with her husband when he was dealing with dementia. "I ask you to sentence Dale to enough years that he will never see the light of day again." "My world has been turned upside-down because of Dale Pautsch's actions," said a victim named Carol, who noted Pautsch was making financial plans with her husband while the husband was in the hospital recovering from a stroke. "I absolutely feel he should be given the maximum sentence for each of his crimes." "Anyone who commits a crime against the elderly is truly evil," said a man who identified himself as a son-in-law of one of the victims. "He needs to be locked up so he cannot find other people to steal from." Several also said they gave money to Pautsch for him to file tax returns that never were filed, and they've been dealing with the IRS and state Department of Revenue as those agencies are seeking to collect, with interest and penalties for late fees. A woman named Carolyn said she and her husband had to take out loans against her husband's life insurance policy and their retirement accounts to make payments to the IRS. She said they've suffered with sleeplessness, stress and related health issues since they learned they were defrauded by Pautsch. "We would like to be retired but we can't afford it now," she said. "We feel betrayed. (Pautsch) has to suffer the way we do every day." A victim named Jeremiah said he and his family are now receiving monthly notices from the IRS because of Pautsch's work for them. "My family has had stress, worry, anxiety and crushed spirits because of Mr. Pautsch," he said. "What was done was not a mistake, it was willful deception. Mr. Pautsch has proven to be the most cunning, most deceptive person I've ever met. ... We paid our taxes, did as we were told, and we're the ones made to feel like criminals. If not for his greed, none of this would've happened." A victim named Elizabeth said Pautsch was initially charged, and she started receiving notices – which she she is still getting – from the IRS, at about the same time her father died. "I should have been grieving with my family," she said. "Instead, I was buried in paperwork and paying money to the IRS to prevent them from taking my home. I will never get that back." In her request for the maximum sentence, Nordin said she "couldn't disagree more" with the pre-sentence investigation recommendation of a three- to four-year sentence. Nordin not only leaned on the victim statements given in court but also written statements from other victims who said Pautsch went out of his way to befriend them, "cozy up" to them and ultimately learn their vulnerabilities, then take advantage of them. She cited how many victims said they were devastated and still dealing with anxiety while trying to repair their lives, financially and otherwise. "He was a predator," Nordin said. "He sought out people, gained their trust, groomed them, found them when they were vulnerable." Nordin also challenged the pre-sentence report's conclusion that Pautsch was remorseful and took responsibility for his actions, noting several disparaging remarks Pautsch made about some of his victims in the report, including two who are immigrants. She also noted that while in county jail awaiting the resolution of his cases, Pautsch received whistleblower forms from the state Department of Revenue that he filled out to attempt to accuse his victims of financial fraud, not him. She surmised Pautsch did this not only to try to absolve himself but also to collect the state's whistleblower fees. The forms were intercepted at the jail before they could be mailed. "Saying those people were scamming the system, not him, doesn't show responsibility or remorse," Nordin said. Nordin said she wanted Pautsch to receive the maximum sentence for each count, not less time for counts involving less money, because those victims also have experienced suffering. She also said the sentence shouldn't be light because of Pautsch's age and current health issues. "Being 81 years old does not take away what he did to them," Nordin said. "I realize he may not walk away from this, and I'm perfectly fine with that." Defense attorney Brett Reetz acknowledged the victim statements were compelling and moving, but he maintained Pautsch was remorseful and said Pautsch wasn't in a position to exploit people any more given his age and health. "He does understand what he did, why it was wrong and how wrong it was," Reetz said. "He initially had genuine belief he had power of attorney ... initially did not understand he was wrong. Now he does. I've been working with Dale to help him understand what he took was not their money, it was their life. "I'm not asking to take this lightly, to give him a slap on the wrist. He's now a penniless, elderly man with serious health concerns. He has nothing left to give." Pautsch apologized to his victims and told the court he wants them to get their money back. "I hurt a lot of people very badly," he said. "Everything they worked for, I took. I'm embarrassed for my family, my friends. I'm truly ashamed for what I've become and what I've done." Before passing sentence, Moeller noted the devastating impact victims said they experienced because of Pautsch's crimes and how he found victims who were especially vulnerable. She also said the pre-sentence report indicated Pautsch's remorse my have been more because he was caught than for his actions. "It's the money, but it's so much more," Moeller said. "People used phrases like, he destroyed my family, he destroyed my life, crushed my spirit, devastated, demoralized, taking away my trust. It's inconceivable how you thought you were helping them." Along with the sentence, a hearing was scheduled for 1 p.m. Nov. 3 to review the progress of restitution Pautsch is making to his victims. Pautsch entered not guilty pleas during his Aug. 19 initial court appearance but changed his pleas to no contest during a Feb. 12 appearance. He initially was arrested and charged with four counts against two victims last June, but subsequent investigation by the Door County Sheriff's Office and Sturgeon Bay Police Department found others who were defrauded by him. All told, Pautsch was charged with and pleaded no contest to 13 counts of theft in a business setting and two counts of money laundering. Two of the 13 theft counts were for amounts of more than $100,000 – one of the victims lost more than $610,000, according to the initial complaint – eight were for amounts between $10,000 and $100,000, two for amounts of $5,000 to $10,000 and one for an amount between $2,500 and $5,000. One of the money laundering counts was for an amount of more than $100,000 and the other for an amount between $10,000 and $100,000. The money was used by Pautsch for personal expenses and buy the Little Brown Jug and cover tavern expenses. Contact Christopher Clough at 920-562-8900 or cclough@ MORE: Cellcom users in Door County unable to call 911 to report a fire MORE: Popular Door County performer raising funds for first new album in years FOR MORE DOOR COUNTY NEWS: Check out our website This article originally appeared on Green Bay Press-Gazette: Door County man Pautsch gets 15-year sentence for defrauding clients
ABC News
2 days ago
- Business
- ABC News
Casinos in Townsville and Darwin to be audited over money-laundering risk
Two casinos in northern Australia found at high risk of being used for money laundering have been ordered to undertake an external audit. Financial crimes watchdog AUSTRAC said the Ville Resort-Casino in Townsville and Mindil Beach Casino Resort in Darwin were at heightened risk for financial crime. The watchdog identified "potential gaps and deficiencies" in the operators' anti-money laundering and counter-terrorism financing controls, risks and oversight. AUSTRAC CEO Brendan Thomas said while the businesses were relatively small, they still faced an increased risk of being exploited by criminals. "AUSTRAC is serious about driving illicit money out of the gambling industry in Australia and making sure businesses that facilitate gambling have strong money-laundering controls," he said. Mr Thomas said all businesses with gaming machines needed to take the risk of money laundering seriously. Auditors will assess whether the casinos are appropriately monitoring customers, doing risk assessments and ensuring enough oversight of anti-financial crime programs. AUSTRAC will determine the scope of the audits for both operations, with casinos to foot the bill. The watchdog will also decide on any further action, pending the auditors' findings. It follows major action by AUSTRAC against other casino operators in recent years, including Crown Resorts, Sky City, and The Star and online bookmakers, Entain, Sportsbet and Bet 365. In a statement, the Ville Resort-Casino said it would continue to work with regulators to ensure it was meeting compliance standards. "The Ville Resort-Casino takes its obligations as a responsible casino operator incredibly seriously, particularly in relation to its key responsibilities in detecting and preventing financial crime," a spokesperson said. The casino said it had recently improved its program to mitigate money laundering and terrorism financing. "The Ville will fully co-operate with AUSTRAC as part of the external audit process and we look forward to demonstrating our enhanced capabilities in anti-money laundering and counter-terrorism financing." In February 2024, allegations that the Ville-Resort Casino paid an illegal junket operator in "cash and loyalty points" were dismissed in Townsville Magistrates Ville is owned by the Morris Group, which last year said it would continue to work with state regulators to ensure it adhered to legislation. Mindil Beach Casino Resort has been contacted for comment.
Bloomberg
3 days ago
- Business
- Bloomberg
UK Sees Card Fraud Soar Even After Clampdown on Payment Scams
Fraudsters have switched up their tactics after the UK cracked down on authorized push payment scams, meaning the overall amount stolen was broadly unchanged last year. Criminals swiped £1.2 billion ($1.6 billion) in 2024, according to trade body UK Finance's annual fraud report. The amount taken using authorized push payments, where a victim is tricked into sending money to an account controlled by scammers, fell 2% to £450.7 million, and the number of cases fell by a fifth to the lowest since 2020.
The Guardian
3 days ago
- Business
- The Guardian
Starling's profits dip 25% as bank takes blame for Covid loan losses
Digital bank Starling has suffered a 25% drop in annual profits and announced it would turn down government guarantees on £28m of Covid loans losses after conceding its own weak controls were to blame. The admission stirs up a long-running controversy over Starling's handling of the government-backed bounce back loan (BBL) scheme, which was built to get money quickly to small businesses during lockdown. The scheme offered loans of up to £50,000 at 2.5% interest but carried little risk, with taxpayers picking up 100% of losses if the companies defaulted. On Wednesday, Starling's chief executive, Raman Bhatia, said the bank had proactively reviewed some of the BBLs on its books, and conceded that a tranche of loans had been granted to applicants without proper checks. That meant they were unlikely to qualify for government guarantees, which might have otherwise seen taxpayers foot the £28m bill. 'In some cases, we think we may not have met all the procedures, all the requirements, of the scheme,' Bhatia told journalists during the conference call. He did not confirm whether Starling had discovered fraud or financial crime within that tranche of loans. It comes just months after Starling was hit with a separate £29m fine for 'shockingly lax' financial crime controls, which the City regulator said had left the financial system 'wide open to criminals and those subject to sanctions'. Together, the fine and BBL loss reduced Starling's profit for the year to March to £223m, down 25% from £301m a year earlier. Bhatia said the bank may consider cutting or clawing back pay from executives if appropriate. 'We have discharged our duties to consider any impact on [remuneration] where appropriate. I can't share any further details.' It is not clear whether that might impact Starling's founder and former chief executive, Anne Boden, who stepped down in 2023 citing a 'conflict of interest' between being a boss and a large shareholder in the lender. Starling's distribution of Covid loans gained heightened attention in 2022 when former minister Theodore Agnew accused Starling of using the BBL scheme as a 'cost-free marketing exercise to build their loan book and so their company valuation', and failing to properly review borrowers before handing out taxpayer-backed loans. Boden at the time vehemently denied Agnew's claims. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Unlike large lenders, Starling opened BBL applications to new clients and saw its client base swell as a result. Its business customer base grew from 87,000 to 330,000: equivalent to adding 15,000 a month. And while the bank had only issued £23m of its own loans before the pandemic in November 2019, it had distributed £1.6bn in BBLs by the time the scheme closed in March 2021. Commenting on the Financial Conduct Authority (FCA) fine and the BBL loss on Wednesday, Starling's chief financial officer, Declan Ferguson, said: 'We continue to make significant investment into our financial crime resource to ensure our risk management and compliance capabilities are commensurate with the high-growth business and experience. 'Working closely with both the FCA and the British business bank, we have also sought to limit the impact of these issues and ensure they remain one-offs, but now we are now more confident we are moving forward into the next stage of our growth on much stronger foundations.'
