An inaugural FraudNet Global Report 2021 draws upon the collective knowledge of members and strategic partners – covering high-profile, legally impactful and sensitive asset recovery cases involving fraud and related misconduct.
FraudNet dates from 2004 and is part of the Commercial Crime Services arm of the International Chambers of Commerce (ICC), based in Paris.
Some 23 chapters cover investigations, cyber, bankruptcy and insolvency, and criminal and civil asset recovery. The report’s editor, Dr Dominic Thomas-James, a member of the Cambridge Centre for Criminal Justice (CCCJ), for example looks at how the coronavirus pandemic ‘has exposed the fragility of the global fight against economic crime’, in the context of public services overrun, and the justice system – in particular the courts – dealing with a mounting backlog of cases. The Financial Action Task Force (FATF), the standard-setter for anti-money laundering and counter-terrorism financing standards, conceded early during the lockdown periods in 2020 that its typical activities of on-site visits, reviews and monitoring could not take place in the context of Covid, he notes.
He concludes: “Covid-19 provides criminals not only with a vulnerable environment in which they can capitalise, but one whereby oversight measures may be protracted, resources cut, and progress in implementing economic crime standards side-lined. This is particularly concerning in the context of developing jurisdictions whose compliance with FATF standards is constantly subject to various bars and challenges. Momentum (or, at times, the lack thereof) is inarguably a hallmark of their compliance records to date.”
Prof Stuart Bazley examines some of the UK financial services regulator the FCA’s important criminal prosecutions and associated civil enforcement activity since December 2019. He closes by suggesting that although it is reasonable to expect the FCA’s enforcement work will continue, one might consider the extent to which FCA criminal and civil enforcement work will address activity associated with the impact of the Covid-19 pandemic on the financial markets.
An anonymised case study about data assets raises the question of whether we value our assets – including personal, even embarrassing information; information that can present those heading it in a less-than-positive light. “Every factory, safe or vehicle, has a key and alarm to keep it safe. Are your data assets protected by a similar mechanism? The answer is usually: no,” write Rami Tamam, partner at Israeli law firm Tamam, Rotenberg, Bar & Co, and Gilad Cohen.
They describe how during Covid-19 and the necessity of remote working, many organisations are being attacked by various hackers using the “man in the email” technique, to carry out data leakages. “This is when they remain in the organisational email network after hacking into it. Organisation workers contact a legitimate party they know but, after sending, someone intercepts their email altering its content and sending it back to the sender. These workers are oblivious to the fact that someone is faking both sides of the correspondence, or of the illegitimate content they have received. In these cases, hundreds of thousands, sometimes even millions of dollars are stolen by someone who is fooling both sides. Only after the money has already been transferred from one account to the other, yet the receiving side has not received its share, do they start asking questions.
“Both sides are puzzled, and such a case can harm business connections. However, once they contact each other and share copies of their correspondence, they realise that they were victims of a well-crafted scheme. Needless to say, the money has long gone by then.”
The final chapter by James Little and Christopher Camponovo is about the case of a consortium led by Italian oil firm, Eni, on trial in Milan for corruption in Nigeria. The American authors conclude that “bad actors – if their pockets are deep enough – will use any and all means to avoid accountability, including the same legal tools that more commonly are deployed against perpetrators of fraud and corruption, instead of their victims. Ultimately, it is a fool’s errand, but one which their high-paid defense attorneys are more than happy to run on a full-fee, hourly basis.”
You can download the 156-page report at https://icc-ccs.org/home/fraudnet.
