Bankrupt Banker

Fairfax has cashed in some of its CDS gains

Fairfax Financial Holdings Ltd., which has just cashed in on a huge bet against the U.S. bond market, has laid down a wager that the credit crunch will hit Europe with a similar force. The insurance firm yesterday revealed a 2007 profit of $1.1-billion (U.S.), more than quadruple the previous year's results, thanks to its investment in credit default swaps (CDS), which rise in value when market conditions deteriorate. Fourth-quarter profit more than tripled to $564-million. But Fairfax chairman and chief executive officer Prem Watsa is also setting his sights across the Atlantic. Fairfax has invested about $60-million in European CDS in the belief that the lending problems that have struck UBS AG, Credit Suisse Group and other financial institutions may grow more serious."[The losses] are slowly starting to hit the marketplace," Mr. Watsa said. Fairfax's 2007 results were driven by $705-million in investment gains in the fourth quarter from CDS, including those tied to distressed monoline insurers. CDS are similar to an insurance policy against a default on bonds or loans. A buyer such as Fairfax pays a small premium and stands to gain if the borrower defaults, or if the perceived risk of a default grows higher.Before last summer, credit default swaps were inexpensive. In the case of monoline insurance companies, which have run into trouble for backing collateralized debt obligations with too many risky loans in them, an investor could buy swaps for between 1 and 2 per cent - in other words, paying $1-million to $2-million for $100-million worth of credit protection. Today, that same insurance can cost $25-million or more, as the market worries that companies like Ambac Financial Group Inc. and MBIA Inc. will not be able to handle their massive debts.Mr. Watsa said credit risk in the monolines is now "much closer to being fairly priced," so Fairfax sold virtually all of those swaps in January and early February. As of Feb. 15, it still owned credit default swaps worth nearly $1.3-billion.But he said many other assets - including stocks - are still too expensive, particularly if the U.S. has a deep recession. Fairfax's results were also boosted by a strong year in insurance underwriting. The company paid just 94 cents in claims and expenses for every dollar in premiums it received. Analyst Jeff Fenwick of Cormark Securities Inc. said Fairfax's operating fundamentals in the insurance business are strong, even without the CDS gains. The fact that Fairfax has cashed in some of its CDS gains - leaving it at year-end with almost $1-billion of cash - means the company is in a strong financial position for 2008, he said. The shift into European CDS also looks like a good bet, Mr. Fenwick said, because "we've seen the contagion from what's gone on in the U.S. markets spreading around the world."Fairfax stock has moved up sharply recently, rising from about $200 six months ago to more than $300.

Fairfax has cashed in some of its CDS gains

Fairfax Financial Holdings Ltd., which has just cashed in on a huge bet against the U.S. bond market, has laid down a wager that the credit ...

war on tax evasion

Tax evasion has become something of a national pastime in major Western countries, thanks to symbiotic cooperation between legislators and lobbyists. Governments are realizing that there are trillions of dollars percolating around Lichtenstein, Luxembourg, the Cayman Islands, the Bahamas, the Virgin Islands, Jersey, Mauritius, Switzerland, Cyprus, etc.However, the “war on tax evasion” is as stupid as the “war on drugs.” Tax havens have a supply and demand function just like any other product. Intelligent people with capital will always create new havens to the extent that they need them.Getting to the main point: Lichtenstein has found itself dead in the middle of the scope of the German BND intelligence agency, which blatantly violated its extraterritorial mandate to hound the assets of wealthy Germans, by literally infiltrating a Lichtenstein bank and bribing an employee to leak data. Apparently a bunch of Americans’ and other non-Germans’ information was also leaked.

war on tax evasion

Tax evasion has become something of a national pastime in major Western countries, thanks to symbiotic cooperation between legislators and l...

Robert C. Trosten, the former finance chief at the futures trader Refco Inc., pleaded guilty

Robert C. Trosten, the former finance chief at the futures trader Refco Inc., pleaded guilty on Wednesday to helping hide hundreds of millio...

ACA may lose $34 billion on securities they guaranteed

U.S. bond insurers such as ACA may lose $34 billion on securities they guaranteed, Citigroup Global Markets said this month. They are likely...

Payments Industry and Police Joint Intelligence Unit (PIPJIU)

Payments Industry and Police Joint Intelligence Unit (PIPJIU) was meant to launch in 2007, when fraud reached record levels in the UK. But it got held up by lawyers representing the different groups forming the new unit: the City of London Police, the MET and APACS, the banking body.The unit's almost ready to roll, said a spokesman today: "All issues regarding PIPJIU have been resolved," he said."There were no showstoppers," he said.However, a source close to the PIPJIU said that the legal issues were still unresolved. Its desire to share information about suspected fraudsters between the police and banks was its biggest problem."Data protection is the problem that's exercising everyone at the moment," he said."There are details to be worked out. There's a lot of work going on to work through this. That's going to take some time," he added.The APACS spokesman would not elaborate on what the issues were, but insisted: "Final documents are now being prepared for sign-off by all parties. We will be making an announcement regarding the launch of the PIPJIU in the next few weeks."The source said there were a "number of issues that need to be overcome in a bi-directional sharing arrangement".By that he meant that the banks were not happy that the data sharing was lopsided: that the police could take more data from the banks than they could give in return.There were also some diverging interests. The banking sector is concerned primarily with mitigating its losses, said the source: "But that agenda will not necessarily be shared by a national fraud centre in terms of priorities."Further, there were talks with the Information Commissioner's Office designed to reassure the unit that there would be no showstopping changes to the legislation under which the unit would operate. They were reluctant to take the ICO's word at face value.The ICO's information sharing team refused to comment, which is unfortunate because this legal minefield is clearly hard enough for the lawyers to navigate. The data sharing rules defined by the Data Protection Act are to change when the Serious Crime Act, which was passed last year, comes into force.It will allow for the private and public sector to share data for the purposes of fraud prevention. Nevertheless, that might not give the fraud unit carte blanche sharing powers.To make matters worse, the government has been making bungles like the HMRC's loss of five million child benefit records. This has got the lawyers all a jitter. "You have got a bunch of legal teams looking at this who are extremely risk averse, but this has just elevated everyone's nervousness," he said. "It's as fine as long as it all goes swimmingly but in the event that something goes wrong, what are the risks?" he added.As the fraud unit will be handling people's financial records, criminal records and intelligence data about mere suspected fraudsters, the risks are clear. It will use the latest pattern analysing and behaviour prediction software of the sort that has a rabid hunger for data and an accepted percentile of mistaken analysis.The PIPJIU's legal shenanigans will also have implications for the Attorney General's Fraud Review, which has been trying since 2006 to establish a similar intelligence unit to share intelligence data across the public and private sectors, the National Fraud Reporting Centre.The APACS spokesman would not elaborate on what issues had held the unit up. He said yesterday that they were to do with its public-private cross-over. But today "categorically refused" it had anything to do with the commercial arrangements. He sidestepped the data protection issue: "I don't know why you are being told data sharing has posed a particular problem," he said, "you will have to go back to whoever told you and ask them." µ

Payments Industry and Police Joint Intelligence Unit (PIPJIU)

Payments Industry and Police Joint Intelligence Unit (PIPJIU) was meant to launch in 2007, when fraud reached record levels in the UK. But i...

Michael Duane Smith convicted of securities fraud in a $50 million Colorado-based investment scam

Michael Duane Smith is listed in a brochure issued by Golf Savings, a mortgage subsidiary of Sterling Savings Bank of Spokane. A spokeswoman...

Lancer Group hedge funds' founder and four other people were charged with defrauding investors out of more than $200 million

Lancer Group hedge funds' founder and four other people were charged with defrauding investors out of more than $200 million by manipulating market prices and overvaluing securities, according to a federal indictment unsealed Wednesday. The grand jury indictment charges former fund manager Michael Lauer and the others with conspiracy and six counts of wire fraud. The indictment said the fraud took place between 1999 and 2003, the year the Lancer Group's assets were frozen by the Securities and Exchange Commission. At the time, the SEC contended that the fraud at three hedge funds managed by Lancer could top $1 billion. The Lancer Group was eventually placed into receivership, with investors filing millions of dollars in claims against the firm. The indictment said the fraud involved manipulation of closing market prices of shell companies based in Boca Raton so that they reached certain fiscal targets. Lauer also allegedly overvalued securities held by the Lancer Group, luring more investors into the funds, and falsified key documents. Lauer, who had offices in New York and Connecticut, was paid more than $40 million in fees from the hedge funds he was managing, according to the indictment. Two attorneys who have represented Lauer in the past did not return telephone calls and e-mails seeking comment. Prosecutors said he was arrested in New York on Tuesday and was being held without bond. Three others accused in the case _ Milton Barbarosh, Laurence Isaacson and Eric Hauser _ were freed on $500,000 bail each after appearing in court Tuesday in Miami. The indictment identified Hauser as the Lancer Group's head trader, Isaacson as chief of some of the shell companies in which Lancer invested and Barbarosh as head of an appraisal firm that provided advice about investments to the hedge funds. Barbarosh also allegedly had financial interests in some of those entities. "We are, of course, asserting Mr. Barbarosh's innocence," said his attorney, Michael Pasano. Attorneys for the others did not respond to telephone and e-mail messages. The whereabouts of the fifth defendant _ Lancer Group manager Martin Garvey _ weren't immediately clear. Court documents in the SEC case listed a past address for Garvey in New Jersey. The charges carry combined maximum penalties of 125 years in prison and fines of more than $1.7 million for each defendant. The receiver appointed by the court in the SEC case to manage Lancer's assets and handle claims from investors reported in 2006 that about $633.6 million should be paid out. Some Lancer assets were sold off, including an auction earlier this month for a Mercedes-Benz C11 race car that brought $2 million.Five individuals who defrauded hedge fund investors of more than $200 million dollars have been indicted on charges of conspiracy and wire fraud, Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced today. Defendants named in the indictment, unsealed today in Miami, are Michael Lauer, Martin Garvey, and Eric Hauser, co-owners of management companies which directed the hedge funds, and Laurence Isaacson and Milton Barbarosh, who had financial interests in Boca Raton, Fla.-based “shell” companies in which the hedge funds invested. All of the defendants are charged with one count of conspiracy to commit mail, wire and securities fraud and six counts of wire fraud. If convicted, each of the defendants faces a maximum sentence of 20 years and a $250,000 fine for each count of wire fraud and five years and a $250,000 fine for the conspiracy count. The indictment also seeks forfeiture of their criminal proceeds.According to the indictment, Lauer, as founder and primary manager, formed and directed several hedge funds, collectively known as the Lancer Group hedge funds. From October 1999 to July 2003, Lauer and his co-defendants manipulated the closing market price of thinly-traded shell company securities to falsely inflate the value of the Lancer Group hedge funds. Lauer, Isaacson, and Barborosh identified “shell” companies, including ones owned by Barbarosh, in which the Lancer Group would buy large quantities of “restricted” stock at pennies per share in private transactions. Lauer, Garvey and Hauser next directed brokers to buy a small amount of the same securities for the Lancer Group at a much higher open market price and to make additional small purchases to drive up the price to a closing “target price.” Lauer then falsely valued all of the securities held by the Lancer Group, including those restricted shares obtained for pennies per share, at the much higher closing price, which falsely boosted the 20 percent performance fees paid to the management companies; induced new investors to buy into the funds; and kept existing investors in the funds. To cover up and perpetuate the scheme, the indictment alleges, Lauer also created fake portfolios of the securities supposedly held by the Lancer Group and obtained falsely inflated appraisals of the shell companies through Isaacson and Barbarosh. An indictment is merely a charge. All defendants are presumed innocent until proven guilty.

Lancer Group hedge funds' founder and four other people were charged with defrauding investors out of more than $200 million

Lancer Group hedge funds' founder and four other people were charged with defrauding investors out of more than $200 million by manipula...

Erika Nieves-Abrigo, Bilked money and gifts from people by claiming she was expecting quintuplets

A woman police say bilked money and gifts from people by claiming she was expecting quintuplets also is wanted in Florida on a fraud charge.Erika Nieves-Abrigo, who went by the name Nancy Cantu in Beaufort, was arrested in Gadsden County, Fla., in August, accused of unlawfully collecting welfare benefits worth $2,375 from 1999 to 2000, said Richard Combs, Florida's prosecuting attorney in the case. Combs said Nieves-Abrigo was ineligible for benefits in Florida because she was simultaneously collecting welfare benefits from Georgia. In South Carolina, Nieves-Abrigo and Juan Salvador Solis were arrested last month and charged with obtaining goods under false pretenses. They are being held in the Beaufort County Detention Center each on $25,000 bond. Investigators think the couple fraudulently obtained money and goods worth more than $1,000 through the quintuplets scam. If convicted, they face a maximum of five years in prison.The two are scheduled to appear in court Friday.

Erika Nieves-Abrigo, Bilked money and gifts from people by claiming she was expecting quintuplets

A woman police say bilked money and gifts from people by claiming she was expecting quintuplets also is wanted in Florida on a fraud charge....

Irish Insurance Federation fraud claims of injuries from car accidents.

* A call to the hotline led to an investigation regarding a man who exaggerated the status of his injuries following an accident. While he received an award of €78,000, the federation claims the sum would have been closer to €500,000 without the tip-off. * A case was dismissed after a witness to an alleged incident in which a man suffered serious back injuries was revealed as the sister of the claimant, but using her married name. Irish Insurance Federation regarding its fraud insurance hotline show that in the four years from 2003 to the end of last year, 3,447 cases were reported. Of those, a staggering 1,691 cases — or 49% of the total — were related to claims of injuries from car accidents. Thanks to one tip-off, the federation claims a saving of €2 million was made when someone involved in a car accident and claiming to have been permanently confined to a wheelchair withdrew his claim on the morning of a High Court action, after investigations found he was not disabled. The second highest category of allegedly fraudulent insurance claims related to damage to cars, with 434 cases, or 12% of the total. A further 153 cases (4.4%) related to other motor cases, such as securing insurance with a false driving licence. Cases involving employers’ liability and public liability accounted for 10% of the total. However, the Irish Insurance Federation said it was not in a position to give details as to the number of cases in which a contact made to its hotline resulted in prosecution for fraud. While last year’s tally of 272 new cases was the lowest annual tally since the hotline was established, the federation believes the existence of the phone line works as a deterrent. Examples include:

Irish Insurance Federation fraud claims of injuries from car accidents.

* A call to the hotline led to an investigation regarding a man who exaggerated the status of his injuries following an accident. While he r...

World of Warcraft fraud:UK bank Halifax decided to stop honoring payments made to Blizzard Entertainment

Tired and annoyed with receiving too many fraudulent credit card transactions to pay for World of Warcraft subscription, major UK bank Halif...

Ren Ci Hospital and Medicare Centre

The Commercial Affairs Department (CAD) is the principal white-collar crime investigation agency in Singapore. It safeguards Singapore’s integrity as a world-class financial and commercial centre through vigilant and professional enforcement of the laws. It investigates into a wide spectrum of commercial and financial crimes and is an outfit with its own investigative and intelligence resources in the Singapore Police Force.This indirectly hinted that there are problems in Ren Ci that may possibly lead to some form of criminal offences. Perhaps a better book-keeping process might have kept Ren Ci out of these problems. At worst, they may be reprimanded for certain business decisions they made, but to intentionally hide it is probably a no-no. A Ministry of Health probe into Ren Ci Hospital and Medicare Centre has discovered that a few financial transactions could not be ’satisfactorily explained’. ‘In order to seek greater clarity into these transactions, MOH has referred them to the Commercial Affairs Department for it assistance,’ said the ministry in a statement on Monday. ‘MOH will be seeking the cooperation of Ren Ci’s board and staff to assistant in CAD’s investigation.’ The ministry will continue its subsidies to Ren Ci for its patient care services to ensure that patients continue to receive care and medical treatment and the day-to-day operations remain undisrupted. Ren Ci has been under investigation by MOH since last November following the discovery of some possible irregularities in certain financial transactions involving the charity and other external organisations. Ernst & Young Associates was appointed to conduct the inquiry. The charity had extended interest-free loans, amounting to millions of dollars, to several companies. An audit turned up discrepancies between the amount recorded by the charity as loaned out and that recorded by the companies as borrowed.

Ren Ci Hospital and Medicare Centre

The Commercial Affairs Department (CAD) is the principal white-collar crime investigation agency in Singapore. It safeguards Singapore’s int...

Klaus Zumwinkel, the chief executive of Deutsche Post AG

The chief prosecutor in Munich says tax investigators and prosecutors have conducted a series of raids in and around the city, part of a wid...

Capital Bank International shut down failure to honour requests for withdrawals.

Capital Bank International, a home-grown bank, was ordered to close after government obtained a court order transferring control of the bank to a receiver.The Grenada government has shut down a local bank after a series of complaints from customers over its failure to honour requests for withdrawals. All 12 branches of Capital Bank throughout the tri-island state have been ordered shut and a government notice placed on their doors states that the decision is consistent with the Banking Act and Companies Act of Grenada.The notice was signed by Minister of Finance and Prime Minister Dr Keith Mitchell."This order comes after the failure of Capital Bank in recent months to honour withdrawal requests by its customers, raising questions about the solvency of Capital Bank," said a statement from the government."The failure of the bank to honour withdrawal requests has resulted in at least one lawsuit being filed against the bank."In an application to the court, Timothy Antoine, the permanent secretary in the Ministry of Finance, declared in his affidavit that the insurance policy of Capital Bank was cancelled for non-payment of the premium.He also stated that the Ministry of Finance had received calls from many depositors expressing concerns about their inability to make withdrawals from the bank which began operations in 1997. Receiver David Holukoff walked into the bank's St George's headquarters late Friday in the presence of government officials and a contingent from the Financial Intelligence Unit of the Royal Grenada Police Force.Holukoff is a chartered accountant and a certified fraud examiner, who has been working in the Eastern Caribbean on numerous complex offshore banking and financial institution matters. Government said that based on legal advice, it was forced to safeguard the interests of depositors, and to "preserve confidence in the integrity of the banking system in Grenada".Friday's closure is further bad news for Capital Bank, which has been seeking to end a long-standing dispute with the St Kitts-based Eastern Caribbean Central Bank (ECCB).

Capital Bank International shut down failure to honour requests for withdrawals.

Capital Bank International, a home-grown bank, was ordered to close after government obtained a court order transferring control of the bank...

U.K Police chiefs were being "rewarded for failure''

Police are being paid thousands of pounds in merit bonuses despite running poorly performing forces. Bonus pay-outs vary widely across the country and often do not reflect the success of forces in official Home Office performance ratings. Critics said police chiefs were being "rewarded for failure'' and called for the rules to be tightened. Half the forces in England and Wales are boycotting the bonus scheme entirely, and one chief constable said she and most of her counterparts were "morally'' opposed to it. But three chief officers of Lincolnshire Police, for example, shared a pounds 40,000 bonus last year, despite having their force rated one of the six worst in England and Wales by the Home Office. Yet at Surrey Police, which finished joint top of the performance table, no bonuses were paid after Bob Quick, its chief constable, and his senior colleagues opted out. The scheme, introduced in 2004, covers about 200 police chiefs and would be worth up to pounds 1.5 million if all were paid a full bonus. Now its future will be reviewed by the Police Negotiating Board. Among the 44 forces in England, Wales and Northern Ireland, eight paid bonuses last year, while 20 did not, according to details released under the Freedom of Information Act. The rest would not say. Matthew Elliott, the chief executive of the Taxpayers' Alliance, said: "Under no circumstances should police chiefs be rewarded for failure. The fact that this is clearly happening is very worrying for public security.'' Lincolnshire Police was awarded only seven out of 18 points in the Home Office's annual ratings. The last assessment by HM Inspectorate of Constabulary, in 2006, found the force "poor'' at tackling serious and organised crime and at investigating "volume crime'', such as burglary. Yet Tony Lake, the chief constable, Richard Crompton, his deputy, and Peter Davies, the assistant chief constable, shared a pay-out of pounds 39,885 in 2006/7. All three men received close to their maximum pay-out, which in Mr Lake's case would have been pounds 17,620 on top of a salary of pounds 117,468. Lincolnshire Police Authority, which approved the bonuses, said: "A simple 'league table' approach does not take account of each force's particular challenges nor of any improvement made. Despite being the poorest-funded force, its performance has continued to improve and has been independently assessed as efficient and effective.'' In Britain's biggest force, the Metropolitan Police, which also turned in a mid-ranking performance, 37 eligible officers shared a pay-out of pounds 210,197. Sir Ian Blair, the commissioner, whose salary is pounds 240,813, waived his bonus, worth up to pounds 36,000, for the second year running. North Wales paid pounds 18,297 bonuses despite a mid-ranking performance. Gillian Parker, the chief constable of Bedfordshire, who has opted out of the scheme, said: "Most of us felt, morally, that it was not the right thing to do. "As a public servant, I felt that I must be able to do what I think is right, without anybody being able to say to me that I have only done it because I'm going to get some money out of it.''

U.K Police chiefs were being "rewarded for failure''

Police are being paid thousands of pounds in merit bonuses despite running poorly performing forces. Bonus pay-outs vary widely across the c...

Semyon Mogilevich asking to be freed on bail

Semyon Mogilevich,Semyon Mogilevich has appeared before Moscow City Court asking to be freed on bail. The man is reported to have a number o...

Paid informer got Liechtenstein bank details on a multi-billion-euro tax evasion scandal

The German government said Saturday that it paid an informer to get Liechtenstein bank details on a multi-billion-euro tax evasion scandal that has rocked the country's business elite.After one top company chief resigned and with hundreds of wealthy Germans now reportedly under suspicion, a bank in the principality that has built its reputation on banking secrecy said German authorities were working from a list of its clients stolen by an employee in 2002.Finance Minister Peer Steinbrueck approved the payment to the informant, his department said in a statement, without confirming a Der Spiegel magazine report that five million euros (7.3 million dollars) was handed over.Steinbrueck "was kept informed of the budgetary consequences and gave his approval to the payment" to the secret informed, a ministry statement said.The minister "had no knowledge of the details of the action undertaken nor the accounts and the names," said the statement.Deutsche Post chairman Klaus Zumwinkel resigned on Friday after it was revealed that he was under investigation and authorities have confirmed that hundreds more "high end" wage earners face a similar tax evasion inquiry.Press reports said 900 search warrants had been executed this weekend and that several billion euros could be involved.A finance ministry spokesman said on Friday that the suspects were "especially people whose revenues are at the high end of the scale."Der Spiegel magazine said the scandal came to light after investigators handed over five million euros to an informer who contacted the BND secret service in early 2006. Without naming sources, the weekly said the BND and North Rhine-Westphalia state tax inspectors worked together to verify the documents. It said the payment was made for information on those involved in the tax fraud and secret instructions from Liechtenstein on how to hide the flow of money. Liechtenstein's LGT bank group announced that it appeared the German authorities seemed to be working from a list of its clients stolen in 2002. LGT spokesman Hans-Martin Uehlinger said the list would contain "several hundred names," adding, "we are going to warn all our clients who are on this list." The bank said Friday that "sensitive documents" had been stolen in 2002 by an employee of its subsidiary LGT-Treuhand, who had been tried the following year. The bank thought that all the material had been returned but realised in 2007 that client data might have been "passed on illegally to third parties." The tax fraud has become a national scandal since a prosecutor in the western city of Bochum announced that Deutsche Post head Zumwinkel was suspected of involvement in tax fraud. Zumwinkel left Deutsche Post and also quit as chairman of the supervisory board of Deutsche Telekom. He told Bild newspaper in an interview published on Saturday that he would cooperate with the investigation. The fraud has been widely condemned by German leaders and could be raised in talks when Liechtenstein Prime Minister Otmar Hasler meets Chancellor Angela Merkel in Berlin this week, her spokesman said. Economy Minister Michael Glos called on business leaders to adopt ethical behaviour and get rid of their bad habits, in an interview to appear in the Bild am Sonntag paper Sunday. They should "be aware of their function as a model for society," he said. "Otherwise our social market economy will no longer be credible." Der Spiegel, in its latest edition to appear Monday, quoted Interior Minister Wolfgang Schaeuble as saying, "These people are destroying everything. "When the elite do not understand that they must respect the law, it is serious." "The economic elites are undermining the system," Finance Minister Steinbrueck said in an interview with Die Zeit. LGT's Internet site describes it as "The Wealth and Asset Management Group of the Princely House of Liechtenstein." The principality, along with Andorra and Monaco, is viewed as an uncooperative tax haven by the Organisation for Economic Cooperation and Development because of its banking secrecy.

Paid informer got Liechtenstein bank details on a multi-billion-euro tax evasion scandal

The German government said Saturday that it paid an informer to get Liechtenstein bank details on a multi-billion-euro tax evasion scandal t...

Vishing operates like phishing

Are you one of many who have received an e-mail, text message, or telephone call, purportedly from your credit card/debit card company directing you to contact a telephone number to re-activate your card due to a security issue? The IC3 has received multiple reports on different variations of this scheme known as "vishing". These attacks against US financial institutions and consumers continue to rise at an alarming rate. Vishing operates like phishing by persuading consumers to divulge their Personally Identifiable Information (PII), claiming their account was suspended, deactivated, or terminated. Recipients are directed to contact their bank via telephone number provided in the e-mail or by an automated recording. Upon calling the telephone number, the recipient is greeted with "Welcome to the bank of ..." and then requested to enter their card number in order to resolve a pending security issue. For authenticity, some fraudulent e-mails claim the bank would never contact customers to obtain the PII by any means, including e-mail, mail, and instant messenger. These e-mails further warn recipients not to provide sensitive information when requested in an e-mail and not to click on embedded links, claiming they could contain "malicious software aimed at capturing login credentials."Please beware; spam e-mails may actually contain malicious code (malware) which can harm your computer. Do not open any unsolicited e-mail and do not click on any links provided.A new version recently reported involved the sending of text messages to cell phones claiming the recipient's on-line bank account has expired. The message instructs the recipient to renew their on-line bank account by using the link provided.Due to rapidly evolving criminal methodologies, it is impossible to include every scenario. Therefore, be cognizant and protect your PII. Beware of e-mails, telephone calls, or text messages requesting your PII.If you have a question concerning your account or credit/debit card, you should contact your bank using a telephone number obtained independently such as; from your statement, a telephone book, or another independent means.

Vishing operates like phishing

Are you one of many who have received an e-mail, text message, or telephone call, purportedly from your credit card/debit card company direc...

Refco Phillip R. Bennett pleaded guilty to all 20 counts

Phillip R. Bennett, 59, of Gladstone, NJ, had been charged in connection with his role in the collapse of the former financial services company, and pleaded guilty to all 20 counts in the superseding indictment against him. He is scheduled to be sentenced on May 20 and remains free on bail pending sentencing. He pleaded guilty to charges of conspiracy, securities fraud, making false filings with the SEC, wire fraud, making false statements to Refco’s auditors, bank fraud and money laundering. Refco was a large, Manhattan-based financial services company that offered securities, derivatives and commodities brokerage services to investors. From as early as the mid-1990s,Refco, which was then privately held and controlled in part by Bennett, sustained hundreds of millions of dollars of losses through its own and its customers’ trading. In order to hide the existence of those losses, Bennett transferred many of them to appear as a debt owed to Refco by Refco Group Holdings, Inc., the holding company that controlled Refco and was in turn controlled by Bennett. Bennett and others directed a series of transactions every year from at least 1999 through 2005 to hide the RGH receivable from, among others, Refco’s auditors, by temporarily paying down the receivable from RGHI over Refco’s fiscal year-end and replacing it with a receivable from one or more other entities not related to Bennett. Thus, at every fiscal year-end and, later, at every fiscal quarter-end, Bennett directed transactions that turned the debt owed to Refco from RGHI into a debt owed to Refco by a Refco customer. Shortly after each fiscal year- or quarter-end, these transactions were unwound, returning the debt to RGHI. The massive debt owed by Bennett’s holding company to Refco was increased not only by losses sustained through its customers’ trading but also through proprietary trading losses accumulated over several years, operating expenses shifted out of Refco Group and into RGHI, and fake foreign exchange and U.S. Treasury security trades carried out for the purpose of increasing Refco’s stated income. In particular, Bennett hid from others, and contributed to the RGHI debt to Refco, among others, the following losses: –At least $90 million in losses sustained by a customerin trading on the Chicago Mercantile Exchange in 1997; –At least $185 million in losses sustained by a group ofcustomers trading in Asian markets in 1997; –At least $40 million in losses from Refco’s own tradingin Russian bonds in 1998. In addition, prosecutors said Bennett caused the following expense-shifting and revenue-padding transactions, among others: –At least approximately $40 million of computer expenses moved out of Refco and into Bennett’s holding company between 1999 and 2002; –At least approximately $38 million in artificial income from inflated interest rates charged on the debt owed by Bennett’s holding company to Refco; –At least approximately $13 million in profits from fake U.S. Treasury notes between Refco and Bennett’s holding company; and –At least approximately $10 million in profits from fake-foreign exchange trades between Refco and Bennett’s holding company.In August 2004, Thomas H. Lee Partners, L.P., purchased a majority interest in Refco, financed by an approximately $1.9billion leveraged buyout transaction. In connection with that transaction, Refco sold approximately $600 million of notes to the public and borrowed approximately $800 million from a syndicate of banks. In August 2005, Refco conducted an initial public offering of approximately $583 million of Refco’s common stock.On Oct. 10, 2005, Refco issued a press release announcing, in substance, that it had discovered that it was owed a debt of approximately $430 million by an entity controlled by Bennett. Following release of this information, the market price of Refco stock plummeted, and Refco’s stock was subsequently delisted by the New York Stock Exchange. Refco Inc. and many of its subsidiaries filed petitions in bankruptcy on Oct. 17, 2005. 2-16-08

Refco Phillip R. Bennett pleaded guilty to all 20 counts

Phillip R. Bennett, 59, of Gladstone, NJ, had been charged in connection with his role in the collapse of the former financial services comp...

Brent Metcalf of Cottonwood, Attorney Graham R. Taylor of Tiburon, Calif., and Certified Public Accountants Stephen F. Petersen of Coalville and Reed

Attorney Dennis B. Evanson has been convicted of tax and fraud charges, according the U.S. Department of Justice. The verdict was announced Wednesday after a two-week jury trial. Evanson was indicted in November 2005 for his involvement in a scheme that used offshore bank accounts and illegal tax shelters to scam the federal government out of more than $20 million in taxes, the news release said. He faces possible jail time and $250,000 in fines. U.S. District Court Judge Tena Campbell set sentencing for May 13. Sammamish, Wash., investment broker Wayne F. DeMeester was accused as a co-conspirator but was acquitted Four others face charges for their alleged involvement in the scheme. Accountant Brent Metcalf of Cottonwood, Attorney Graham R. Taylor of Tiburon, Calif., and Certified Public Accountants Stephen F. Petersen of Coalville and Reed H. Barker of Littleton, Colo., have pleaded guilty to fraud charges. Metcalf also pleaded guilty on Jan. 25 to conspiracy and aiding in the filing of a false tax return. Petersen and Barker pleaded guilty to tax fraud, and Petersen pleaded guilty to aiding in the preparation of a false tax return. Attorneys from the Justice Department's Tax Division and the U.S. Attorney's Office for the District of Utah prosecuted the case, and the Internal Revenue Service Criminal Investigation Department conducted the investigation.

Brent Metcalf of Cottonwood, Attorney Graham R. Taylor of Tiburon, Calif., and Certified Public Accountants Stephen F. Petersen of Coalville and Reed

Attorney Dennis B. Evanson has been convicted of tax and fraud charges, according the U.S. Department of Justice. The verdict was announ...

Child pornography Children are abducted, trafficked, sold to criminals and used as subjects for child sex pornography in many developing countries

Thousands of children are abducted, trafficked, sold to criminals and used as subjects for child sex pornography in many developing countries. French traffickers using charity workers as cover were arrested, charged and convicted in a matter of weeks. Hundreds of thousands of children are sexually abused and the acts are recorded and sold over the Internet. This feeds the appetites of child sex offenders, putting many more children in danger of being abused. It is an insidious abuse of the Internet. The travelling sex abusers prey on these vulnerable children using the Internet as a sex tourist guide to the Philippine sex industry that the government seems to tolerate and encourage. The traveling sex tourists develop their evil appetites while abusing Filipino children and then go back to their own countries and abuse children there all the more. Governments of wealthy tourist-sending countries ought to realize that their children are at greater risk from the Asian sex business, the more they ignore it. This is their problem, too. However, business investment is apparently more important than children. In the Philippines, the proposed antichild pornography law ought to be declared urgent and passed swiftly. Technology makes pornography easily available. Minors and children have the ability and opportunity to access pornography and to be exposed to it. They are vulnerable and unprotected every time they use a computer with an unfiltered Internet connection. By failing to control the Internet Server Providers (ISPs), governments are exposing children to grave abuse. Young people are the prime targets for sexual abusers who contact and groom them over the Internet and eventually try to meet, exploit and sexually abuse your child or grandchild. Every photo of a child being abused is evidence of abuse and there are millions of such photographs available on the Internet. The child is violated over and over as the images are shared. Cyber sex shops are secret dens and are connected live to paying customers through the Internet. With a camera attached, they beam images of children being sexually abused. Paedophiles, thousands of miles away, can order acts of abuse of their choice. Other child sex offenders can join secret Internet clubs if they submit a certain number of child pornography images to the controller. This is an incentive for them to abuse children to make such images. Police cannot infiltrate the networks and clubs because it is forbidden for them to submit such images. Young people who access adult or child pornography on the Internet can be profoundly shocked and damaged by what they see. Parents should be shocked too. Their children are being corrupted and alienated from them. Young people may imitate what they see believing it is reality when, in fact, it is contrived and artificial. They entice young women to act like a depraved individual in a seductive and promiscuous manner. Other advertisers sexualize children and promote dress and behavior where the young girls are displayed as sexually provocative, docile, enslaved or submissive. Many advertisers use women to entice men to buy their products and use sexualized minors to condition the public to accept teenage sex as acceptable. That perverse idea sells more than it seems. Models are getting younger and younger and their sexualized images sell even more products. The brandy advertisement that had the message, “Did you ever taste a 15- year-old?” was widely condemned and eventually removed from Philippine billboards. The industry group with the greatest responsibility for curbing the proliferation of child pornography over the Internet are the Internet Server Providers (ISPs). Many ISPs around the world have installed filters to block these sites and a warning is sent to the people trying to access them. In Sweden, the number of people trying to get child porn over the Internet dropped from 8,000 to 300 a month when they were blocked by a filter and got a warning that their illegal act was being monitored. Customers should only subscribe to an ISP that has filters blocking child porn. Protecting children is the first obligation of responsible corporations, not making money, and our responsibility is to see every ISP has a blocking filter to protect children.

Child pornography Children are abducted, trafficked, sold to criminals and used as subjects for child sex pornography in many developing countries

Thousands of children are abducted, trafficked, sold to criminals and used as subjects for child sex pornography in many developing countrie...

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