The U.S. Treasury Department announced on Wednesday that it sanctioned an Iranian general under the (Narcotics) Kingpin Act for allowing Afghan narcotics traffickers to smuggle drugs through Iran.
Iranian Islamic Revolutionary Guard Corps Qods Force General Gholamreza Baghbani is the chief of a Qods Force office near the Afghan border.
Treasury said he facilitated the smuggling of heroin precursor chemicals and shipments of opium through the Iranian border and into Iran in exchange for moving weapons to the Taliban on his behalf.
It’s the first time the Kingpin Act has been used against an Iranian official, Treasury said in a statement.
“Today’s action exposes [Qods Force] involvement in trafficking narcotics, made doubly reprehensible here because it is done as part of a broader scheme to support terrorism,” said David Cohen, undersecretary of Treasury for terrorism and financial intelligence, in the statement.
It's of little surprise that an Iranian General in the IRGC is trafficking heroin from Afghanistan to support terrorism both is support of actions by the Iranian Government and to support activities of the Taliban. Professionals in both law enforcement and in the AML/BSA/OFAC Compliance field have long held that narcotics traffickers and terrorists have been copying out of each others playbooks... this is just the most recent and most vivid example.
What this does underscore if in but an overly obvious way is that diligence and REALLY knowing your customers and what their business is about is CRITICAL to not running afoul in the Sanctions Compliance arena. Since terrorist, narcotics traffickers and other ne'er-do-well who are not operating in anyone's best interests (other than their own) are not going to fire off a flare gun to identify their locations or activities, understanding the who behind the transaction is more important than ever...
Recent updates to the FATF 40 recommendations emphasize the need for effective Due Diligence as well as a recognition that countries should implement targeted financial sanctions regimes to comply with United Nations Security Council resolutions relating to the prevention and suppression of terrorism and terrorist financing, and that countries should also should implement targeted financial sanctions to comply with United Nations Security Council resolutions relating to the prevention, suppression and disruption of proliferation of weapons of mass destruction and its financing... clearly a recognition that the landscape is continuously changing in the areas of sanctions and AML & CFT Compliance.
So, with 77 updates to the OFAC SDN List in CY2011 and 13 updates so far in CY2012, how are you staying "ahead of the curve" to make sure that your Sanctions Compliance Program is authentically up to par? Is your program performing as it should? Is there a disconnect between policies, procedures and results obtained?
Now is NOT the time to take chances with your program and hope that it will perform as desired. Now is the time to take action and get an Independent Program Review of your Sanctions Compliance Program... Its a small investment in your present and your future.
Shaun Hassett, CAMS is a recognized industry expert in areas of Sanctions Compliance, Due Diligence, AML/BSA Compliance and related business processes associated with identifying high risk entities and in mitigating risks associated with such entities.
(c) 2012 Shaun M Hassett, CAMS Financial Examiantions & Evaluations, Inc.
Wednesday, March 7, 2012
Friday, March 2, 2012
Due Diligence: Robust v Fragile
This article was published in IFC Review and was written by L Burke Files, CDDP,
President, Financial Examinations & Evaluations, Inc*
(International Financial Centre Review 01/03/2012)
It list listed her for your edification.
If you mail a package to your office in Cayman and it has a computer in it, you write on the outside of the package ‘Fragile’. The fragile computer package can arrive on a sliding scale from at best, unharmed, to at worst, completely destroyed.
If you mail a package to your office in Cayman that is robust, you don't write on the package: ‘I don't care, do whatever you want to this package’. The robust has a sliding scale from unharmed and a lower boundary of unharmed.
Or as an experiment on the fragile computer package one could write: ‘Please mishandle.’ Because a lower bound would be unharmed. And the upper bound would be improved - you'd get, instead of one computer, two computers with all of your work prepared and done for the week. Just like in mythology expect the computer would be bigger and somehow faster, stronger.
Ok while this is all fine what does this have to do with offshore and due diligence?
The service providers are the package and the package handlers are the media, the regulators and the clients.
I have described due diligence as the process that helps the business person to be able to correctly and reliably differentiate the hound from the hare - the result is often a surprise to both hound and hare. While that is a cute remark, modern due diligence is a structured, systematic, consistent and efficient methodology of choice making. It is both an outward and inward looking managerial process.
For the offshore financial community due diligence mostly appears as a disembodied phantasm of checklists of tasks for KYC and AML - nothing more.
But there is so much more we must know about the handlers of our package, KYC and AML is just the surface, what about, SDNs, OFAC complications, companies dealing in conflict minerals, environmental crimes, smuggling, kidnapping and ransom, extortion, corruption, and drug dealing. What about the regulator that would rather see a firm that has caused a jurisdiction a ‘red faced moment’ gone and closed as opposed to actually exploring the validity of a given matter.
It is these types of regulators that are going to mishandle your fragile package - your law firm, your trust company, your bank. The client may have the specific intent of mishandling your reputation just long enough to get what they need. This type of regulator will mishandle your package for their internal reasons and to show the world they are tough on crime.
I watched a US citizen who, in the past had been in the offshore business himself; shop his needs to many different service providers. He had a significant ‘legacy issue’; he was a defendant in a civil case with the SEC on a US$10 million matter, alleging fraud. He shopped his needs and wants and in a show of bravado was very aggressive in negotiating price since in his words: “he was in settlement discussions” with the SEC. Many were eager to have this man as a client, it was a large sum of money, and the federal docket on his case did show several settlement conferences. All seemed real - if even a bit on the edge. However, a bit more research would have shown that he had filed for each of the settlement conferences. Reading the documents, the SEC accused him of using these settlement proposals as a way of stalling the matters at hand. He used the settlement conferences in the docket as a way to downplay the legal matter and as leverage to get an offshore service provider to help him.
I was part of a firm that this man came to see and it all looked plausible. This man had already signed our client intake forms. The firm was going to move forward until I asked the right questions and discovered the ‘rest of the story’. We did turn him down but it was that close.
Ultimately, he did get a well known and reputable service provider to help him. The service provider was staffed by skilled and seasoned professionals. In the end this reputable service provider was driven into insolvency from a combination of the cost of defending themselves and the loss of revenue from a departing client base after both the regulators and the newspapers learned of the service provider / client relationship.
Our little firm too was questioned both by the regulators and the papers. The SEC in a raid on this man’s home found a copy of our client intake forms. We were forthright with the regulators as the story he presented and the evidence he provided at that time seemed plausible. However, after further research - as required by our little firm’s due diligence guidelines, it became obvious to us that the evidence supplied by the prospective client was faulty and we refused him as a client.
Our little firm has been tested again and again by clients, governments and general economic circumstances. We continually test this firm with thought experiments or ‘what if’s’ and measuring our firm’s ability to avoid those who would mishandle us. The firm that took the man as a client was easily 20 times our size and is now gone. Our little firm, though not much larger today as it was back then, is still around.
The larger firm was vulnerable to the perturbations suffered by being mishandled. Their frailty in this case was a technically compliant, but ultimately an insufficient due diligence process.
For more information on Due Diligence visit the Association for Due Diligence Professionals at www.duediligenceassociation.org/ or email me at lbf@feeinc.com
*Author of ‘Due Diligence For The Financial Professional 2nd’
President, Financial Examinations & Evaluations, Inc*
(International Financial Centre Review 01/03/2012)
It list listed her for your edification.
If you mail a package to your office in Cayman and it has a computer in it, you write on the outside of the package ‘Fragile’. The fragile computer package can arrive on a sliding scale from at best, unharmed, to at worst, completely destroyed.
If you mail a package to your office in Cayman that is robust, you don't write on the package: ‘I don't care, do whatever you want to this package’. The robust has a sliding scale from unharmed and a lower boundary of unharmed.
Or as an experiment on the fragile computer package one could write: ‘Please mishandle.’ Because a lower bound would be unharmed. And the upper bound would be improved - you'd get, instead of one computer, two computers with all of your work prepared and done for the week. Just like in mythology expect the computer would be bigger and somehow faster, stronger.
Ok while this is all fine what does this have to do with offshore and due diligence?
The service providers are the package and the package handlers are the media, the regulators and the clients.
I have described due diligence as the process that helps the business person to be able to correctly and reliably differentiate the hound from the hare - the result is often a surprise to both hound and hare. While that is a cute remark, modern due diligence is a structured, systematic, consistent and efficient methodology of choice making. It is both an outward and inward looking managerial process.
For the offshore financial community due diligence mostly appears as a disembodied phantasm of checklists of tasks for KYC and AML - nothing more.
But there is so much more we must know about the handlers of our package, KYC and AML is just the surface, what about, SDNs, OFAC complications, companies dealing in conflict minerals, environmental crimes, smuggling, kidnapping and ransom, extortion, corruption, and drug dealing. What about the regulator that would rather see a firm that has caused a jurisdiction a ‘red faced moment’ gone and closed as opposed to actually exploring the validity of a given matter.
It is these types of regulators that are going to mishandle your fragile package - your law firm, your trust company, your bank. The client may have the specific intent of mishandling your reputation just long enough to get what they need. This type of regulator will mishandle your package for their internal reasons and to show the world they are tough on crime.
I watched a US citizen who, in the past had been in the offshore business himself; shop his needs to many different service providers. He had a significant ‘legacy issue’; he was a defendant in a civil case with the SEC on a US$10 million matter, alleging fraud. He shopped his needs and wants and in a show of bravado was very aggressive in negotiating price since in his words: “he was in settlement discussions” with the SEC. Many were eager to have this man as a client, it was a large sum of money, and the federal docket on his case did show several settlement conferences. All seemed real - if even a bit on the edge. However, a bit more research would have shown that he had filed for each of the settlement conferences. Reading the documents, the SEC accused him of using these settlement proposals as a way of stalling the matters at hand. He used the settlement conferences in the docket as a way to downplay the legal matter and as leverage to get an offshore service provider to help him.
I was part of a firm that this man came to see and it all looked plausible. This man had already signed our client intake forms. The firm was going to move forward until I asked the right questions and discovered the ‘rest of the story’. We did turn him down but it was that close.
Ultimately, he did get a well known and reputable service provider to help him. The service provider was staffed by skilled and seasoned professionals. In the end this reputable service provider was driven into insolvency from a combination of the cost of defending themselves and the loss of revenue from a departing client base after both the regulators and the newspapers learned of the service provider / client relationship.
Our little firm too was questioned both by the regulators and the papers. The SEC in a raid on this man’s home found a copy of our client intake forms. We were forthright with the regulators as the story he presented and the evidence he provided at that time seemed plausible. However, after further research - as required by our little firm’s due diligence guidelines, it became obvious to us that the evidence supplied by the prospective client was faulty and we refused him as a client.
Our little firm has been tested again and again by clients, governments and general economic circumstances. We continually test this firm with thought experiments or ‘what if’s’ and measuring our firm’s ability to avoid those who would mishandle us. The firm that took the man as a client was easily 20 times our size and is now gone. Our little firm, though not much larger today as it was back then, is still around.
The larger firm was vulnerable to the perturbations suffered by being mishandled. Their frailty in this case was a technically compliant, but ultimately an insufficient due diligence process.
For more information on Due Diligence visit the Association for Due Diligence Professionals at www.duediligenceassociation.org/ or email me at lbf@feeinc.com
*Author of ‘Due Diligence For The Financial Professional 2nd’
Tuesday, October 12, 2010
Asset Location and Due Diligence: Policy Manual Time Bombs
If you are working in a financial instruction, you will have at least one policy manual addressing Customer Due Diligence (CDD) and Know Your Customer (KYC). These manuals have probably been assembled in a perfectly perfunctory manner, recognizing at the time, current laws and regulations. If you are a securities broker dealer a CDD and KYC manuals are required, and they must address specific topics, such as client credentials and AML law to thwart criminals and terrorists. In our role we have had the opportunity to read many, many manuals addressing CDD and KYC.
A favorite quote (instruction?) from one manual was “...and to supplement our policies on terrorism, any terrorist that walks through our office doors will be shot dead on the spot!” The NASD took a dim view of this policy -- but the B/D insisted it remain. To this day, it remains the strongest policy on terrorism we have ever seen.
Most DD procedures are the result of combined efforts to address the legal and regulatory issues in an effort to standardize the approach across a large organization. In theory, policies are meant to raise the standards of CDD and KYC to a “best practice” level.
So where are the policy bombs, and how are they fused and detonated?
As policies are created out of a need to address regulatory requirements and law, a manual only represents a snapshot in time -- the time it was created.
For example ...
The original author of a manual drafted in 2000 addressed the rules and threats of the day, and no doubt it was an exemplary manual. In 2002 regulations were substantially changed -- requiring more information to be gathered, shared, and retained. In 2004 the company using this manual merged with a new firm. In 2006 the office changed locations -- not far, but to a different county. In 2007 the parent company was bought out by a private equity firm, reincorporated in a new state, and had a substantial reduction in staff. In 2008 the office added insurance and estate planning professionals. In 2009 the office manager is confronted with a warrant, and law enforcement officers gathering records. It is suspected that one of their clients has been running a financial fraud, and has been laundering money though their accounts. The good news is that the firm has not been charged criminally -- but was fined by regulators. The bad news is that the victims of the fraud view the firm as the deep pocket that can make them whole -- since the firm was a part of the scheme. It's known as scheme liability.
The victims are not accusing the firm of being a malfeasor, but as a misfeasor. They will attempt to ascribe liability to the firm for failing to follow the policies and procedures in their manual.
Maybe the original author did a great job. Problems began when the manual was revised by Mary -- who left the project to Don when she left the firm. Don made his changes, and gave the project to Eric, who began to automate some of the processes. Angelina, CFE and CAMS certified, took over when Don was made redundant. Angelina took
the process in a new direction. Was that five or six versions of the manual (ago)?
In the end, what CDD/KYC procedures were used when the fraudster’s account was opened probably doesn't matter.
What matters is whether the financial organization deviated from the manual and its own policy. Deviance from policy is what opens the door for liability. This deviation may also allow an insurance company to deny coverage for attorneys’ fees and any awards given to the victims. The polices and procedures it approved and agreed to insure were not the ones followed by the firm.
The solution is simple (but boring).
Keep a pedigree of every version of the manual, including a record of the drafting efforts, dates, participants, and content. Appended this material to the current version, and date the version on every page. Review and revise manuals as needed in response to regulations, court rulings, changes in the business, changes in jurisdiction, changes in suppliers, or any other change that should affect policies. This must be done no less than annually. If you have a meeting, and the result of that meeting that there are no changes – document that meeting and add it to the record. Send copies of your most recent version to both regulators and your insurance company -- and invite comments. It's more difficult for regulators to issue fines and insurers to deny claims when they have been included in the process.
L Burke Files
Financial Examinations and Evaluations Inc. / The LUBRINCO Group Ltd.
A favorite quote (instruction?) from one manual was “...and to supplement our policies on terrorism, any terrorist that walks through our office doors will be shot dead on the spot!” The NASD took a dim view of this policy -- but the B/D insisted it remain. To this day, it remains the strongest policy on terrorism we have ever seen.
Most DD procedures are the result of combined efforts to address the legal and regulatory issues in an effort to standardize the approach across a large organization. In theory, policies are meant to raise the standards of CDD and KYC to a “best practice” level.
So where are the policy bombs, and how are they fused and detonated?
As policies are created out of a need to address regulatory requirements and law, a manual only represents a snapshot in time -- the time it was created.
For example ...
The original author of a manual drafted in 2000 addressed the rules and threats of the day, and no doubt it was an exemplary manual. In 2002 regulations were substantially changed -- requiring more information to be gathered, shared, and retained. In 2004 the company using this manual merged with a new firm. In 2006 the office changed locations -- not far, but to a different county. In 2007 the parent company was bought out by a private equity firm, reincorporated in a new state, and had a substantial reduction in staff. In 2008 the office added insurance and estate planning professionals. In 2009 the office manager is confronted with a warrant, and law enforcement officers gathering records. It is suspected that one of their clients has been running a financial fraud, and has been laundering money though their accounts. The good news is that the firm has not been charged criminally -- but was fined by regulators. The bad news is that the victims of the fraud view the firm as the deep pocket that can make them whole -- since the firm was a part of the scheme. It's known as scheme liability.
The victims are not accusing the firm of being a malfeasor, but as a misfeasor. They will attempt to ascribe liability to the firm for failing to follow the policies and procedures in their manual.
Maybe the original author did a great job. Problems began when the manual was revised by Mary -- who left the project to Don when she left the firm. Don made his changes, and gave the project to Eric, who began to automate some of the processes. Angelina, CFE and CAMS certified, took over when Don was made redundant. Angelina took
the process in a new direction. Was that five or six versions of the manual (ago)?
In the end, what CDD/KYC procedures were used when the fraudster’s account was opened probably doesn't matter.
What matters is whether the financial organization deviated from the manual and its own policy. Deviance from policy is what opens the door for liability. This deviation may also allow an insurance company to deny coverage for attorneys’ fees and any awards given to the victims. The polices and procedures it approved and agreed to insure were not the ones followed by the firm.
The solution is simple (but boring).
Keep a pedigree of every version of the manual, including a record of the drafting efforts, dates, participants, and content. Appended this material to the current version, and date the version on every page. Review and revise manuals as needed in response to regulations, court rulings, changes in the business, changes in jurisdiction, changes in suppliers, or any other change that should affect policies. This must be done no less than annually. If you have a meeting, and the result of that meeting that there are no changes – document that meeting and add it to the record. Send copies of your most recent version to both regulators and your insurance company -- and invite comments. It's more difficult for regulators to issue fines and insurers to deny claims when they have been included in the process.
L Burke Files
Financial Examinations and Evaluations Inc. / The LUBRINCO Group Ltd.
Monday, October 4, 2010
Global Background Checks, Know the Facts
Do Global Background Checks Really Exist? And if so, are they sufficient to meet my Due Diligence Needs?
Global background checks offered by companies on the internet are frequently nothing more than a scam. There are a few firms that actually offer truly satisfactory international investigative services to qualify... and it is estimated that up to 90% or more of the companies or websites claiming to offer global background checks are fraudulent.
That's right; a majority of such companies don't even offer a true domestic investigations, let alone global investigations. Most websites claiming to offer background checks actually often just search databases for criminal records information. This is not a Due Diligence Investigation, nor does this even qualify as a true “background check”. It is however a superficial and reckless way of dealing with risk assessment and mitigation. True Due Diligence requires professional investigation. International Due Diligence requires professional field investigators in foreign countries… by an organization that has demonstrable ability to legitimately investigate at an international level.
Authentic Due Diligence involves prudent investigation conducted by professional investigators; it is a verification and investigation process which includes searching criminal records and many other factors, including financial due diligence and an understanding of those that associate with the target of your investigation. It's important to know that criminal records cannot be checked via a database for most international cases…. nor can financial information.
True Due Diligence is much more than just checking against criminal records and various government watch lists… Information concerning the financial, social and criminal background of a target, as well as those who are known to associate with the individual or organization in question are all required in order to get a more accurate and more complete picture to then based informed decisions upon. Foreign investigations require access to information in countries where you need to gather the information. This often can only be done with “feet on the street” to gather information first hand.
If you require a Due Diligence on an individual or organization with significant operations or history in one or more foreign countries, a true global or international investigation is required to gather the necessary evidence to understand and mitigate the risks associated with the contemplated counter party.
True professional background checks and private investigations don't exist for $39.95… any more than a great top notch paint job does for your home or automobile.
Real Due Diligence is based upon investigations which assess many factors, including education and employment history, criminal and civil records, ID and passport verification, document verification, informant testimony, travel records, financial dealings, real estate holdings, known associations, etc. There is no magical global database, not even for “Big Brother”. The fact is the majority of the world is still developing, and vast regions in Latin America, Africa and Asia are still filing records the old fashioned way. If there is no field investigator on the ground who speaks the local language, is familiar with local customs, and who has appropriate contacts with police, government and others who can provide appropriate sources of information, the job simply won't get done.
To conduct an international due diligence investigation or "global background check", an international private investigator, or a company with offices of investigators in several countries is required. You can't conduct a Panamanian background or Uzbekistani background check without investigators working in Panama or Uzbekistan to gather the necessary information… It’s that plain and simple. And, while your investigator does NOT need to have a local office exist in every city or every country, the investigator does have to have a network of reliable local contacts to facilitate the investigative process. Searching databases simply isn't a sufficient option for international cases.
Fraud and scams continue to be on the rise, so it's more important than ever to know who you're dealing with, and minimize your risk. The LUBRINCO Group can assist you in such endeavors…
Thursday, July 29, 2010
Asset Location and Due Diligence - A Horse story...
As professionals, clients rely heavily upon us to find them information that they themselves cannot locate, as well as to identify solutions to a host of different situations that are not pre-packaged, off-the-shelf answers. In this vein, they also rely upon us to perform some unusual tasks.
A client, an active purchaser of businesses, had employed us for our due diligence services, to determine what issues might be associated with the business that the client was buying. As part of this transaction, she had encountered a most unique problem.
It seems our client had sold a thoroghbred Arabian Horse to the daughter of a dear friend - on terms. The terms of the sale were that the purchaser was to pay $1,000 per month for the horse for one year and that would be that. The horse was worth much more than that, but our client had figured that the horse was going to a good home and that was more important than the money. Horse people are horse people and they know one another and what matters.
The terms were not being met, but she was assured the horse was in the best of care. Our client was frustrated but understood that it takes young people a bit more time to understand how they must meet their obligations. However, the “understanding” ended when our client heard a fantastic tale of the friend's daughter ride the horse through a bar in downtown Glendale, AZ - in quite a drunken state. The details of the evening really were quite ribald and only fit for a newsletter with better graphics capabilities so the story and pictures can be properly paired.
With the understanding gone – our client did not what the payments (per the original agreement) but, rather the return of the horse.
Our client called the police, who could not be of assistance since it was a civil matter. Further, our client’s attorney suggested filing a lawsuit. Walking away versus suing offered to end of a spectrum of effort and neither appealed to her.
At this point, our client had called us for advice. We suggested a “self-help” remedy available under the UCC code and under most state laws. We suggested that our client go find the horse and take it back.
She suggested we go find the horse with her POA and to call her when we had the horse in our possession. It was too much of a challenge not to at least try. Mind you, while you may think of the west especially Arizona as filled with horses - I assure you Central Park in New York has more horses that downtown Glendale, AZ.
Our search took three nights of drifting in and out of the bars where the horse had been seen and late on the third night, as our investigator was walking out the back door that led to a bike trail at the back of the bar – our girl with the horse was riding up. She tied up the horse and went into the bar. Our investigator promptly untied the horse and road off down the bicycle trail. Not wanting to be branded as a horse thief - we immediately called the police to report the horse “repossession”.
When the young woman at the police department stopped laughing, she then patched us through to the department that handles automobile repossessions. The young officer at the repossessions desk that night thought that our call was a joke - even after he hung up on us and we called back twice more. Our investigator gave his full name and the name of the firm, and finally the officer on the line began to take our reported horse repossession a bit more seriously.
The police department’s vehicle repossession database was set up for well, automobiles - with data fields to correspond to the year, make, model and VIN. The officer and our investigator talked it over and came up with an elegantly creative (if misleading) way to fill out the fields and get a repossession case number for the horse.
Year - DOB of horse was 2001 - so it was a 2001 model. Make - Arabian. Model - Thoroughbred. VIN - We provided the officer with the AZ Department of Agriculture's Hauling Card Number – and like magic, success - a repo case number was issued.
We then contacted our client and she (along with two police cars) met us to load the horse into the trailer - after a quick photo session with the officers, the horse and the investigator. The officers, quite rightly came to see off the horse to make sure this was a true tale.
The moral of this story is simple and straightforward. Systems are set up to handle routine, everyday occurrences - not the extraordinary. Sometimes life’s circumstances require creativity, patience and good humor to bend systems to allow them to compensate for the extraordinary. Our purpose is about solutions not excuses.
A client, an active purchaser of businesses, had employed us for our due diligence services, to determine what issues might be associated with the business that the client was buying. As part of this transaction, she had encountered a most unique problem.
It seems our client had sold a thoroghbred Arabian Horse to the daughter of a dear friend - on terms. The terms of the sale were that the purchaser was to pay $1,000 per month for the horse for one year and that would be that. The horse was worth much more than that, but our client had figured that the horse was going to a good home and that was more important than the money. Horse people are horse people and they know one another and what matters.
The terms were not being met, but she was assured the horse was in the best of care. Our client was frustrated but understood that it takes young people a bit more time to understand how they must meet their obligations. However, the “understanding” ended when our client heard a fantastic tale of the friend's daughter ride the horse through a bar in downtown Glendale, AZ - in quite a drunken state. The details of the evening really were quite ribald and only fit for a newsletter with better graphics capabilities so the story and pictures can be properly paired.
With the understanding gone – our client did not what the payments (per the original agreement) but, rather the return of the horse.
Our client called the police, who could not be of assistance since it was a civil matter. Further, our client’s attorney suggested filing a lawsuit. Walking away versus suing offered to end of a spectrum of effort and neither appealed to her.
At this point, our client had called us for advice. We suggested a “self-help” remedy available under the UCC code and under most state laws. We suggested that our client go find the horse and take it back.
She suggested we go find the horse with her POA and to call her when we had the horse in our possession. It was too much of a challenge not to at least try. Mind you, while you may think of the west especially Arizona as filled with horses - I assure you Central Park in New York has more horses that downtown Glendale, AZ.
Our search took three nights of drifting in and out of the bars where the horse had been seen and late on the third night, as our investigator was walking out the back door that led to a bike trail at the back of the bar – our girl with the horse was riding up. She tied up the horse and went into the bar. Our investigator promptly untied the horse and road off down the bicycle trail. Not wanting to be branded as a horse thief - we immediately called the police to report the horse “repossession”.
When the young woman at the police department stopped laughing, she then patched us through to the department that handles automobile repossessions. The young officer at the repossessions desk that night thought that our call was a joke - even after he hung up on us and we called back twice more. Our investigator gave his full name and the name of the firm, and finally the officer on the line began to take our reported horse repossession a bit more seriously.
The police department’s vehicle repossession database was set up for well, automobiles - with data fields to correspond to the year, make, model and VIN. The officer and our investigator talked it over and came up with an elegantly creative (if misleading) way to fill out the fields and get a repossession case number for the horse.
Year - DOB of horse was 2001 - so it was a 2001 model. Make - Arabian. Model - Thoroughbred. VIN - We provided the officer with the AZ Department of Agriculture's Hauling Card Number – and like magic, success - a repo case number was issued.
We then contacted our client and she (along with two police cars) met us to load the horse into the trailer - after a quick photo session with the officers, the horse and the investigator. The officers, quite rightly came to see off the horse to make sure this was a true tale.
The moral of this story is simple and straightforward. Systems are set up to handle routine, everyday occurrences - not the extraordinary. Sometimes life’s circumstances require creativity, patience and good humor to bend systems to allow them to compensate for the extraordinary. Our purpose is about solutions not excuses.
Wednesday, June 30, 2010
Survey: Banks Are More Frightening Than Criminals For Many
A recent survey indicates that consumers are five times more likely to switch banks because of hidden fees than security concerns, according to the survey conducted by the Gartner consulting firm. And one in six U.S. adult consumers—an estimated 28 million people—said unexpected fees make them more upset or aggravated than having their financial accounts taken over or used by a thief.
In the era of stiff competition and free checking accounts, penalty fees have become an increasingly important source of revenue for banks. About half of bank profits now come from fees—exceeding profits from credit cards, mortgages and all other interest income—according to the research firm R.K. Hammer. According to SNL Financial, banks collect annual fees in the range of approximately $30-32 billion, with the bulk of that amount coming from overdraft fees or what were once known as “bounced check fees". Many financial institutions charge fees ranging from $25 to $49 per incidence.
As consumers use debit cards linked to their checking accounts more frequently—and in more complicated ways -- combined with the challenges of a languishing and mediocre economy -- the chances of overdrawing their accounts have dramatically increased.
Consumers making purchases with debit cards or withdrawing money from an ATM can now easily push their accounts into the red. In fact, according to the Center for Responsible Lending, most “bounced check” charges now arise from debit purchases or other electronic transactions.
In the era of stiff competition and free checking accounts, penalty fees have become an increasingly important source of revenue for banks. About half of bank profits now come from fees—exceeding profits from credit cards, mortgages and all other interest income—according to the research firm R.K. Hammer. According to SNL Financial, banks collect annual fees in the range of approximately $30-32 billion, with the bulk of that amount coming from overdraft fees or what were once known as “bounced check fees". Many financial institutions charge fees ranging from $25 to $49 per incidence.
As consumers use debit cards linked to their checking accounts more frequently—and in more complicated ways -- combined with the challenges of a languishing and mediocre economy -- the chances of overdrawing their accounts have dramatically increased.
Consumers making purchases with debit cards or withdrawing money from an ATM can now easily push their accounts into the red. In fact, according to the Center for Responsible Lending, most “bounced check” charges now arise from debit purchases or other electronic transactions.
Wednesday, March 24, 2010
Real Stories from the Field — But I can get it cheaper…
One of the fascinating pieces of business is the cost of goods and services, with there often being several options at several prices. We face this issue frequently, because the work we do at LUBRINCO often seems similar to what others offer.
But is it in fact the same?
A good example of this involves independent testing and review of AML Compliance programs, which is mandated by law.
There are a lot of firms that do this, and many of them are extremely competent, and cost less than we do. In fact, however, we do not do independent testing and review of AML programs per se. Rather, we do independent testing and review of AML programs where there is a concern regarding possible regulatory action, and help when a regulatory action either has taken place, or when there are concerns that such an action might take place.
Should this make a difference in your thinking? Yes. If all you want is to be able to demonstrate a bare minimum of compliance, then we respectfully suggest that you should probably not hire us: You can get the job cheaper elsewhere.
On the other hand, if you want to make sure the regulators know your firm is actually doing the proper job within your AML compliance program, rather than merely giving the task lip service, we should be among your first choices.
And if you have actual concerns about a possible regulatory action, and avoiding them, and addressing them, then we should be at the top of your list.
In a recent case, a company solicited two bidders for independent AML program testing and review. One firm provided a bid for about $6,000 for the job. The other was an estimated $40,000.
The company accepted the higher bid. The evaluation produced a number of troubling areas, all but one of which was rectified. In reviewing the work product provided by the independent provider selected, the regulatory examiners found that the program review identified and remediated all of the issues identified except for the one minor issue that was then still outstanding at the time of their examination There was a minor action over the one outstanding issue, which was subsequently dealt with.
Was the investment of the extra $34,000 worthwhile?
Well, it saved the institution a huge amount of additional time, money, and grief. Based on this, we would conclude that it was definitely worth it.
To read the entire March 2010 edition of Aegis Journal, click here
But is it in fact the same?
A good example of this involves independent testing and review of AML Compliance programs, which is mandated by law.
There are a lot of firms that do this, and many of them are extremely competent, and cost less than we do. In fact, however, we do not do independent testing and review of AML programs per se. Rather, we do independent testing and review of AML programs where there is a concern regarding possible regulatory action, and help when a regulatory action either has taken place, or when there are concerns that such an action might take place.
Should this make a difference in your thinking? Yes. If all you want is to be able to demonstrate a bare minimum of compliance, then we respectfully suggest that you should probably not hire us: You can get the job cheaper elsewhere.
On the other hand, if you want to make sure the regulators know your firm is actually doing the proper job within your AML compliance program, rather than merely giving the task lip service, we should be among your first choices.
And if you have actual concerns about a possible regulatory action, and avoiding them, and addressing them, then we should be at the top of your list.
In a recent case, a company solicited two bidders for independent AML program testing and review. One firm provided a bid for about $6,000 for the job. The other was an estimated $40,000.
The company accepted the higher bid. The evaluation produced a number of troubling areas, all but one of which was rectified. In reviewing the work product provided by the independent provider selected, the regulatory examiners found that the program review identified and remediated all of the issues identified except for the one minor issue that was then still outstanding at the time of their examination There was a minor action over the one outstanding issue, which was subsequently dealt with.
Was the investment of the extra $34,000 worthwhile?
Well, it saved the institution a huge amount of additional time, money, and grief. Based on this, we would conclude that it was definitely worth it.
To read the entire March 2010 edition of Aegis Journal, click here
Daimler Agrees to Pay $185 Million to Settle Bribery Charges
By Amanda Harding, New York Times, on March 24, 2010, 4:17 pm
On Tuesday, German automobile-maker Daimler, agreed to pay approximately $185 million to settle bribery charges by the US Department of Justice (DOJ) and the Securities Exchange Commission (SEC). Two of Daimler’s subsidiaries, located in Russia and Germany, are also expected to plead guilty to bribing foreign officials, according to The New York Times.
The Times further reports that Daimler itself is expected to avoid indictment. On Tuesday, the DOJ released criminal complaints against Daimler and three subsidiaries that accused Daimler of bribing foreign officials in at least 22 countries between 1998 and 2008. The court documents reportedly allege that Daimler “made hundreds of improper payments worth tens of millions of dollars to foreign officials,” which helped it make at least $50 million in extra pretax profits.
A hearing is scheduled for April 1 in the U.S. District Court in Washington, D.C.
Read The New York Times article
FCPA Issues as well as other financial crimes, including money laundering are squarely in the glare of regulatory and judicial spotlights.
The LUBRINCO Group can help your firm assess and mitigate your exposure to these regulatory issues in these areas as well as perform international due diligence investigations, financial investigations and locate hidden or missing assets.
By Amanda Harding, New York Times, on March 24, 2010, 4:17 pm
On Tuesday, German automobile-maker Daimler, agreed to pay approximately $185 million to settle bribery charges by the US Department of Justice (DOJ) and the Securities Exchange Commission (SEC). Two of Daimler’s subsidiaries, located in Russia and Germany, are also expected to plead guilty to bribing foreign officials, according to The New York Times.The Times further reports that Daimler itself is expected to avoid indictment. On Tuesday, the DOJ released criminal complaints against Daimler and three subsidiaries that accused Daimler of bribing foreign officials in at least 22 countries between 1998 and 2008. The court documents reportedly allege that Daimler “made hundreds of improper payments worth tens of millions of dollars to foreign officials,” which helped it make at least $50 million in extra pretax profits.
A hearing is scheduled for April 1 in the U.S. District Court in Washington, D.C.
Read The New York Times article
FCPA Issues as well as other financial crimes, including money laundering are squarely in the glare of regulatory and judicial spotlights.
The LUBRINCO Group can help your firm assess and mitigate your exposure to these regulatory issues in these areas as well as perform international due diligence investigations, financial investigations and locate hidden or missing assets.
Thursday, March 11, 2010
Due diligence: dodgy documents fool many / BISCOM News / BIScom - World Money Laundering Report: Online
Due diligence: dodgy documents fool many
BIScom News
Friday 05 March 2010
The story of the fraudulent (or fake, depending on which representative of the UK Government is making a statement) passports used by (alleged) Mossad agents to enter Dubai just one aspect a wider documents problem.
It would be difficult, one would think, for a commercial airline pilot to work for 13 years with only a light aircraft licence - which was expired for much of that time. Yet that is exactly what an un-named Swede, living in Milan and flying for the past two years for a Turkish Airline is said to admit to having done.
Or how about Emma Charlton, the somewhat chunky woman who used to be known as Emma Golightly. Whether that was a fanciful view of herself as having a part in Breakfast At Tiffanies or irony, one cannot tell. Actually, Golightly was her real name: she changed it, by deed poll, to Charlton after she was released from jail in 2007. She had been serving a sentence for fraud.
Then Charlton started to weave a fabricated life: she started by telling people her father was a judge, that she was a manager at a chain store, that she had recently married a soldier - and that she was suffering from cancer which was terminal. Oh, and that she had been born in Africa, was adopted, that she was a photographer whose work was featured in Vogue magazine, that she was the editor of Vogue,
Of this only the bit about the chain store was true - well, sort of. She wasn't a manager, she lied about her past to get the job and she was sacked for not turning up to work.
She found men who she could dupe: the previous charges related to five who she took for a total of GBP250,000.
In the latest round, she stole cheques from her fiance - who had no idea what was going on, totally taken in by her tales - and the fact that she had a little dog like rich women do (apparently) and her grandmother, issuing them for as much as GBP10,000. She used stolen money and credit cards to buy jewellery and other items that she then sold to second-hand-goods chain CashConverters, apparently without question.
It's not expensive to create a false identity, obviously.
Obviously, that is, unless one is the British government. A man who, as a youth, murdered a child in the most horrible circumstances has been given a replacement identity and released into the community on parole with a number of conditions. Jon Venables was abolished, to all intents and purposes, in 2001 and a new, bulletproof identity created in its place. But this week, due to infractions of his parole, he's been recalled to jail. It is said that there is little chance that his new identity will remain intact. That means that he will need another new identity - at a cost that some estimate of GBP250,000.
That can't be right: criminals everywhere can get false identities that work for a couple of thousand pounds. Surely there's someone that can put Venables in touch with the kind of people who make this happen?
-------------------------------------------------------------------------------------
The above blog article is a terrific representation of how not knowing enough about the parties with whom you engage in business activities can place you or your organization at risk.
The LUBRINCO Group can assist firms in performing Due Diligence Investigations (Domestically in USA or Internationally) to help firms avoid the risks associated with not adequately knowing your customers, your employees or vendors or not adequately knowing counterparites with whom you are involved.
BIScom News
Friday 05 March 2010
The story of the fraudulent (or fake, depending on which representative of the UK Government is making a statement) passports used by (alleged) Mossad agents to enter Dubai just one aspect a wider documents problem.
It would be difficult, one would think, for a commercial airline pilot to work for 13 years with only a light aircraft licence - which was expired for much of that time. Yet that is exactly what an un-named Swede, living in Milan and flying for the past two years for a Turkish Airline is said to admit to having done.
Or how about Emma Charlton, the somewhat chunky woman who used to be known as Emma Golightly. Whether that was a fanciful view of herself as having a part in Breakfast At Tiffanies or irony, one cannot tell. Actually, Golightly was her real name: she changed it, by deed poll, to Charlton after she was released from jail in 2007. She had been serving a sentence for fraud.
Then Charlton started to weave a fabricated life: she started by telling people her father was a judge, that she was a manager at a chain store, that she had recently married a soldier - and that she was suffering from cancer which was terminal. Oh, and that she had been born in Africa, was adopted, that she was a photographer whose work was featured in Vogue magazine, that she was the editor of Vogue,
Of this only the bit about the chain store was true - well, sort of. She wasn't a manager, she lied about her past to get the job and she was sacked for not turning up to work.
She found men who she could dupe: the previous charges related to five who she took for a total of GBP250,000.
In the latest round, she stole cheques from her fiance - who had no idea what was going on, totally taken in by her tales - and the fact that she had a little dog like rich women do (apparently) and her grandmother, issuing them for as much as GBP10,000. She used stolen money and credit cards to buy jewellery and other items that she then sold to second-hand-goods chain CashConverters, apparently without question.
It's not expensive to create a false identity, obviously.
Obviously, that is, unless one is the British government. A man who, as a youth, murdered a child in the most horrible circumstances has been given a replacement identity and released into the community on parole with a number of conditions. Jon Venables was abolished, to all intents and purposes, in 2001 and a new, bulletproof identity created in its place. But this week, due to infractions of his parole, he's been recalled to jail. It is said that there is little chance that his new identity will remain intact. That means that he will need another new identity - at a cost that some estimate of GBP250,000.
That can't be right: criminals everywhere can get false identities that work for a couple of thousand pounds. Surely there's someone that can put Venables in touch with the kind of people who make this happen?
-------------------------------------------------------------------------------------
The above blog article is a terrific representation of how not knowing enough about the parties with whom you engage in business activities can place you or your organization at risk.
The LUBRINCO Group can assist firms in performing Due Diligence Investigations (Domestically in USA or Internationally) to help firms avoid the risks associated with not adequately knowing your customers, your employees or vendors or not adequately knowing counterparites with whom you are involved.
Thursday, October 22, 2009
Zurich loses personal data of 51,000 UK customers
The post below punctuates the importance of properly assessing and protecting your Intellectual Property and Critical Information from both internal and external risks, and from unintended consequences.
The LUBRINCO Group are specialists in this area.....
Zurich UK
The
The firm says it has written to the general insurance customers but that there is no evidence that the data has been misused by fraudsters.
In addition, it has appointed KPMG to investigate the loss, with the accountancy firm also advising on moves to strengthen security procedures.
The Financial Services Authority and UK Information Commissioner's Office have also been informed.
Thursday, September 17, 2009
IAT Compliance Deadline is Tomorrow (September 18, 2009)
Are you ready for the deadline???
The delay of the original compliance date for NACHA’s IAT rule is nearing an end as the revised compliance date,
An International ACH Transaction is defined as an ACH entry that is part of a payment transaction involving a financial agency’s office that is not located in the territorial jurisdiction of the
An office of a financial agency is involved in the payment transaction if it:
1. holds an account that is credited or debited as part of a payment transaction; or
2. receives funds directly from a Person or makes payment directly to a Person as part of a payment
transaction; or
3. serves as an intermediary in the settlement of any part of a payment transaction.
Fortunately, NACHA does provide a wealth of information on its website on the rule, including FAQs, which you can access by clicking IAT Rule Helpful Materials.
If you still need help or have questions in this area, particularly related to the AML and OFAC compliance issues that affect processing of IATs, please contact shassett@lubrinco.com
Friday, September 11, 2009
Recent Fraud Cases of Interest...
Man indicted in fraud case
posted September 10, 2009
Total Loss: $100,000
John Dennis Sedersten, 33, joined Max R. Snodgrass, 31, Bryan Thomas Ray, 32, and Karen Ann Harris, 45, as a defendant in the 25-count indictment. From April to November 2008, the defendants used stolen checking account and personal identity information to produce counterfeit identification documents and checks, federal prosecutors said.
Source:
News-Leader
http://www.news-leader.com/article/20090910/NEWS01/909100309/1007/NEWS01/Alleged-beating-victim-indicted-in-fraud-case
Md. man guilty of fraud with dead neighbor’s name
posted September 10, 2009
Total Loss: $95,000
A Fallston man has pleaded guilty to bank fraud charges for using his dead neighbor’s identity to get credit accounts. Fifty-six-year-old Jerome Malecki’s plea entered Wednesday said he and David Johnson stole about $95,000 in Social Security and state pension payments meant for his neighbor. The neighbor’s July 2004 death wasn’t reported and federal prosecutors said Malecki continued the scheme until November 2007.
Source:
Washington Examiner
http://www.washingtonexaminer.com/local/ap/58150997.html
Man Pleads Guilty in Wal-Mart Card Phishing Scheme
posted September 10, 2009
Total Loss: $193,000
A Sacramento, California, man has pleaded guilty to charges for his role in an international scam that netted sensitive information on tens of thousands of Internet users and then used that data to open fraudulent Wal-Mart credit cards. Tien “Tim” Truong Nguyen pleaded guilty to fraud and identity theft charges on Tuesday, the day before his case was set to go to trial.Prosecutors say that, working in concert with Romanian cyber-criminals, Nguyen set up fake phishing Web sites and supplied others with stolen information that was then used to set up fake Wal-Mart instant credit accounts in stores throughout northern California.By setting up hundreds of these instant credit lines, Nguyen’s two alleged co-conspirators, Stefani Ruland and Ryan Price, netted close to $193,000 in just under two months, prosecutors say.
Tags:
Wal-Mart, GE Capital
Source:
PC World
http://www.pcworld.com/businesscenter/article/171683/man_pleads_guilty_in_walmart_card_phishing_scheme.html
Local man sentenced for loan fraud
posted September 09, 2009
Total Loss: $340,000
A Huntington-area man convicted of student loan fraud will spend one year and six months behind bars and pay $344,908 in restitution. Stephen Phillips, 38, was sentenced Aug. 27, by U.S. District Judge William W. Caldwell in Harrisburg, Pa. Phillips had pleaded guilty to the federal charge in May. A U.S. Attorney’s Office press release states the conviction arose out of a scheme in which Phillips allegedly used the identities of innocent third parties to apply for more than $340,000 in federal educational benefits.
Source:
Herald Dispatch
http://www.herald-dispatch.com/news/briefs/x1408881239/Local-man-sentenced-for-loan-fraud
check
over 100k
Bad check leads to fraud probe
posted September 09, 2009
Total Loss: $100,000
Police launched an investigation into a possible investment fraud scheme involving several victims and at least $100,000 after a 21-year-old British national was arrested Monday for passing a fraudulent check.Adam Al-Muhanna was arrested Monday, at the University of Redlands after he allegedly wrote a check to a former student there for $100,000 on a closed CitiBank account. Police say Al-Muhanna also wrote several other checks connected to bank accounts that were either closed or contained insufficient funds. At least three people say they gave money in amounts ranging from $2,000 to $65,000 to Al-Muhanna to invest and never received a return despite repeated requests for their money, according to Redlands city spokesman Carl Baker.
Tags:
Citibank
Source:
Redlands Daily Facts
http://www.redlandsdailyfacts.com/news/ci_13294132
FBI is cracking bank fraud ring
posted September 07, 2009
Total Loss: $44 million
The FBI is investigating a fraud ring accused of bilking several banks and customers — including San Antonio-based USAA and the former chief of staff of U.S. Sen. Strom Thurmond — out of at least $44 million. One person is in custody in San Antonio and agents are looking for a Nigerian man from Dallas featured on the television show “America’s Most Wanted.” The suspects are believed to have posed as customers to fraudulently withdraw money from bank accounts, including one at USAA that was tapped for $98,000.
Tags:
USAA, Citibank, Woodforest Bank
Source:
San Antonio Express News
http://www.mysanantonio.com/news/local_news/FBI_is_cracking_bank_fraud_ring.html
collusive network
credit card
over 500k
11 charged in alleged credit card fraud scheme
posted September 07, 2009
Total Loss: $650,000
Federal authorities have charged 11 people with fraud in an alleged scheme that involved creating counterfeit credit cards and using them to withdraw cash. The U.S. Attorney’s Office says the individuals charged withdrew more than $650,000 from ATMs between July 2008 through April 2009. All 11 of the suspects are from northwestern Twin Cities suburbs.According to court documents, the suspects used counterfeit credit cards to make unauthorized withdrawals, defrauding Capital One Bank. Authorities say they also used the counterfeit cards to get cash advances.
Tags:
Capital One
Source:
WQOW18
http://www.wqow.com/Global/story.asp?S=11087162
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posted September 10, 2009
Total Loss: $100,000
John Dennis Sedersten, 33, joined Max R. Snodgrass, 31, Bryan Thomas Ray, 32, and Karen Ann Harris, 45, as a defendant in the 25-count indictment. From April to November 2008, the defendants used stolen checking account and personal identity information to produce counterfeit identification documents and checks, federal prosecutors said.
Source:
News-Leader
http://www.news-leader.com/article/20090910/NEWS01/909100309/1007/NEWS01/Alleged-beating-victim-indicted-in-fraud-case
Md. man guilty of fraud with dead neighbor’s name
posted September 10, 2009
Total Loss: $95,000
A Fallston man has pleaded guilty to bank fraud charges for using his dead neighbor’s identity to get credit accounts. Fifty-six-year-old Jerome Malecki’s plea entered Wednesday said he and David Johnson stole about $95,000 in Social Security and state pension payments meant for his neighbor. The neighbor’s July 2004 death wasn’t reported and federal prosecutors said Malecki continued the scheme until November 2007.
Source:
Washington Examiner
http://www.washingtonexaminer.com/local/ap/58150997.html
Man Pleads Guilty in Wal-Mart Card Phishing Scheme
posted September 10, 2009
Total Loss: $193,000
A Sacramento, California, man has pleaded guilty to charges for his role in an international scam that netted sensitive information on tens of thousands of Internet users and then used that data to open fraudulent Wal-Mart credit cards. Tien “Tim” Truong Nguyen pleaded guilty to fraud and identity theft charges on Tuesday, the day before his case was set to go to trial.Prosecutors say that, working in concert with Romanian cyber-criminals, Nguyen set up fake phishing Web sites and supplied others with stolen information that was then used to set up fake Wal-Mart instant credit accounts in stores throughout northern California.By setting up hundreds of these instant credit lines, Nguyen’s two alleged co-conspirators, Stefani Ruland and Ryan Price, netted close to $193,000 in just under two months, prosecutors say.
Tags:
Wal-Mart, GE Capital
Source:
PC World
http://www.pcworld.com/businesscenter/article/171683/man_pleads_guilty_in_walmart_card_phishing_scheme.html
Local man sentenced for loan fraud
posted September 09, 2009
Total Loss: $340,000
A Huntington-area man convicted of student loan fraud will spend one year and six months behind bars and pay $344,908 in restitution. Stephen Phillips, 38, was sentenced Aug. 27, by U.S. District Judge William W. Caldwell in Harrisburg, Pa. Phillips had pleaded guilty to the federal charge in May. A U.S. Attorney’s Office press release states the conviction arose out of a scheme in which Phillips allegedly used the identities of innocent third parties to apply for more than $340,000 in federal educational benefits.
Source:
Herald Dispatch
http://www.herald-dispatch.com/news/briefs/x1408881239/Local-man-sentenced-for-loan-fraud
check
over 100k
Bad check leads to fraud probe
posted September 09, 2009
Total Loss: $100,000
Police launched an investigation into a possible investment fraud scheme involving several victims and at least $100,000 after a 21-year-old British national was arrested Monday for passing a fraudulent check.Adam Al-Muhanna was arrested Monday, at the University of Redlands after he allegedly wrote a check to a former student there for $100,000 on a closed CitiBank account. Police say Al-Muhanna also wrote several other checks connected to bank accounts that were either closed or contained insufficient funds. At least three people say they gave money in amounts ranging from $2,000 to $65,000 to Al-Muhanna to invest and never received a return despite repeated requests for their money, according to Redlands city spokesman Carl Baker.
Tags:
Citibank
Source:
Redlands Daily Facts
http://www.redlandsdailyfacts.com/news/ci_13294132
FBI is cracking bank fraud ring
posted September 07, 2009
Total Loss: $44 million
The FBI is investigating a fraud ring accused of bilking several banks and customers — including San Antonio-based USAA and the former chief of staff of U.S. Sen. Strom Thurmond — out of at least $44 million. One person is in custody in San Antonio and agents are looking for a Nigerian man from Dallas featured on the television show “America’s Most Wanted.” The suspects are believed to have posed as customers to fraudulently withdraw money from bank accounts, including one at USAA that was tapped for $98,000.
Tags:
USAA, Citibank, Woodforest Bank
Source:
San Antonio Express News
http://www.mysanantonio.com/news/local_news/FBI_is_cracking_bank_fraud_ring.html
collusive network
credit card
over 500k
11 charged in alleged credit card fraud scheme
posted September 07, 2009
Total Loss: $650,000
Federal authorities have charged 11 people with fraud in an alleged scheme that involved creating counterfeit credit cards and using them to withdraw cash. The U.S. Attorney’s Office says the individuals charged withdrew more than $650,000 from ATMs between July 2008 through April 2009. All 11 of the suspects are from northwestern Twin Cities suburbs.According to court documents, the suspects used counterfeit credit cards to make unauthorized withdrawals, defrauding Capital One Bank. Authorities say they also used the counterfeit cards to get cash advances.
Tags:
Capital One
Source:
WQOW18
http://www.wqow.com/Global/story.asp?S=11087162
Friday, September 4, 2009
TJX pays $525,000 to settle hacking-related suit
Another example of why it is so critically important to implement a true OPSEC Program within your organization to protect your intellectual property and critical information...
04 September 2009 - 10:39 (source: finextra.com)
Retailer TJX has agreed to pay $525,000 to settle a putative class action suit from several banks related to the massive security breach at its operations that resulted in the theft of millions of credit and debit card numbers.
The money - which comes out of the reserve put aside by TJX for breach-related costs in 2007 - will primarily reimburse the settling banks for some of their expenses.
AmeriFirst Bank, HarborOne Credit Union, SELCO Community Credit Union and Trustco Bank, the remaining financial institutions that sought to join the suit, agreed to drop all claims. TJX denied all wrongdoing.
Since revealing in January 2007 that hackers had stolen more than 45 million credit and debit card numbers from its computer system, TJX has paid out huge amounts in settlements.
In June the retailer agreed to pay around $9.75 million as part of a settlement with a group of 41 state attorneys general. It has also reached a $40.9 million settlement with Visa and a $24 million deal with MasterCard over the breach.
Last week it emerged that Albert Gonzalez, the computer hacker accused of masterminding the TJX breach, has agreed to plead guilty to the offense and attacks on several other retailers.
---------
The LUBRINCO Group can help you to accurately identify, value and protect your critical information assets!
04 September 2009 - 10:39 (source: finextra.com)
Retailer TJX has agreed to pay $525,000 to settle a putative class action suit from several banks related to the massive security breach at its operations that resulted in the theft of millions of credit and debit card numbers.
The money - which comes out of the reserve put aside by TJX for breach-related costs in 2007 - will primarily reimburse the settling banks for some of their expenses.
AmeriFirst Bank, HarborOne Credit Union, SELCO Community Credit Union and Trustco Bank, the remaining financial institutions that sought to join the suit, agreed to drop all claims. TJX denied all wrongdoing.
Since revealing in January 2007 that hackers had stolen more than 45 million credit and debit card numbers from its computer system, TJX has paid out huge amounts in settlements.
In June the retailer agreed to pay around $9.75 million as part of a settlement with a group of 41 state attorneys general. It has also reached a $40.9 million settlement with Visa and a $24 million deal with MasterCard over the breach.
Last week it emerged that Albert Gonzalez, the computer hacker accused of masterminding the TJX breach, has agreed to plead guilty to the offense and attacks on several other retailers.
---------
The LUBRINCO Group can help you to accurately identify, value and protect your critical information assets!
Friday, August 28, 2009
SEC Charges Control Person Liability in Settled FCPA Action
This article is being re-posted from another source due to the critical nature of reach by the SEC in FCPA cases.
In a new twist on an old statute, the Securities and Exchange Commission brought its first Foreign Corrupt Practices Act action charging control person liability under the Exchange Act.
In a July 31 settled enforcement action, the SEC charged a parent corporation, Nature’s Sunshine Products, with violating the FCPA’s anti-bribery, books and records, and internal controls provisions and other securities law violations based on payments allegedly paid by its Brazilian subsidiary to customs brokers to facilitate the importation of unregistered products.
Notably, the agency also charged current NSP executive Douglas Faggioli and former NSP executive Craig Huff with violating the FCPA’s books and records and internal controls provisions based on their position as “control persons,” even though the SEC didn’t allege that the executives had personal knowledge of the payments
(See the SEC’s complaint.)
Without admitting or denying the allegations, all three defendants agreed to orders enjoining them from future violations. NSP agreed to pay a civil penalty of $600,000. Faggioli and Huff each agreed to pay a civil penalty of $25,000.
UrofskyWhile as an FCPA case, “this is a relatively small matter,” says Shearman & Sterling partner Philip Urofsky, ”What makes it noteworthy is that the SEC has for the first time invoked a theory of executive liability based on Section 20(a) of the Securities Exchange Act of 1934.”
Indeed, an Aug. 11 Shearman & Sterling alert notes that the case “may presage a broader enforcement effort against executives who fail to adequately supervise employees responsible for maintaining the company’s books and records and system of internal controls.”
Under Section 20, a “control person” is liable for the acts of other corporate employees under his control. “The question, of course, is what ‘control’ means and whether it includes an element of culpability,” says Urofsky. In some circuits, he says the plaintiff (here the SEC) is required to plead culpability, while in others, such as the 10th Circuit, it’s viewed as an affirmative defense where the defendant must raise good faith and lack of culpable knowledge.
While it may prove to be limited to its facts, the case “signals the SEC’s intention to hold executives liable for their company’s books and records and internal controls under all available theories,” the alert states.
The ability to bring this type of case in a jurisdiction that permits the SEC to plead 20(a) liability without pleading culpable knowledge allows the agency to impose liability and sanctions on executives “even where they don’t necessarily have the last evidentiary link between the knowledgeable and culpable subordinates and senior executives,” says Urofsky. However, he says, “Since good faith is a defense, regardless of how a particular Circuit defines ‘control,’ whether this will be a useful tool outside of a settled disposition is not clear.”
In a new twist on an old statute, the Securities and Exchange Commission brought its first Foreign Corrupt Practices Act action charging control person liability under the Exchange Act.
In a July 31 settled enforcement action, the SEC charged a parent corporation, Nature’s Sunshine Products, with violating the FCPA’s anti-bribery, books and records, and internal controls provisions and other securities law violations based on payments allegedly paid by its Brazilian subsidiary to customs brokers to facilitate the importation of unregistered products.
Notably, the agency also charged current NSP executive Douglas Faggioli and former NSP executive Craig Huff with violating the FCPA’s books and records and internal controls provisions based on their position as “control persons,” even though the SEC didn’t allege that the executives had personal knowledge of the payments
(See the SEC’s complaint.)
Without admitting or denying the allegations, all three defendants agreed to orders enjoining them from future violations. NSP agreed to pay a civil penalty of $600,000. Faggioli and Huff each agreed to pay a civil penalty of $25,000.
UrofskyWhile as an FCPA case, “this is a relatively small matter,” says Shearman & Sterling partner Philip Urofsky, ”What makes it noteworthy is that the SEC has for the first time invoked a theory of executive liability based on Section 20(a) of the Securities Exchange Act of 1934.”
Indeed, an Aug. 11 Shearman & Sterling alert notes that the case “may presage a broader enforcement effort against executives who fail to adequately supervise employees responsible for maintaining the company’s books and records and system of internal controls.”
Under Section 20, a “control person” is liable for the acts of other corporate employees under his control. “The question, of course, is what ‘control’ means and whether it includes an element of culpability,” says Urofsky. In some circuits, he says the plaintiff (here the SEC) is required to plead culpability, while in others, such as the 10th Circuit, it’s viewed as an affirmative defense where the defendant must raise good faith and lack of culpable knowledge.
While it may prove to be limited to its facts, the case “signals the SEC’s intention to hold executives liable for their company’s books and records and internal controls under all available theories,” the alert states.
The ability to bring this type of case in a jurisdiction that permits the SEC to plead 20(a) liability without pleading culpable knowledge allows the agency to impose liability and sanctions on executives “even where they don’t necessarily have the last evidentiary link between the knowledgeable and culpable subordinates and senior executives,” says Urofsky. However, he says, “Since good faith is a defense, regardless of how a particular Circuit defines ‘control,’ whether this will be a useful tool outside of a settled disposition is not clear.”
Wednesday, August 26, 2009
Beware of Ego Clouding One's Judgement
An academic review of 15 Canadian corporate fraud cases between 1995 and 2005 suggests that the biggest red flag for potential accounting fraud is a surprising one:
CEOs with egos inflated by media or analysts praise.![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=ebbda9c3-7a3b-4ccf-b529-a9c93a81388d)
CEOs with egos inflated by media or analysts praise.
Michel Magnan, a business professor at Concordia University in Montreal and one of the authors of the report, says that the extent to which the company’s chief executive officer is lauded in the media or by analysts appears to be a key factor.
According to the Globe and Mail, Mr. Magnan's study study showed that
"generous doses of external praise can lead an egotistical executive to start to believe his or her own press, creating hubris or an exaggerated sense of self-confidence that leads CEOs to believe they can do whatever they want and get away with it.
“In most of these cases, these companies and the executives involved were quite present in the media or closely followed by analysts – they were market darlings, so to speak,” Prof. Magnan stated in a recent interview.
The study considered cases of alleged fraud at companies including Bre-X Minerals Ltd., Cinar Corp., Hollinger Inc., Livent Inc., Philip Services Corp., Mount Real Corp. and YBM Magnex International Inc., along with others.
I wonder how many of the recent cases in the news involving corporate fraud are also directly linked to the over-inflated egos of senior management and the false belief that their own press clippings as the guiding light for their present and future successes?
Friday, July 10, 2009
Note: This post originally appeared in the Compliance and Financial Oversight Blog, but because of its critical importance, I wanted to repost here:
Red Flags Rule - Could FINRA treat this like AML & the USA Patriot Act?
FINRA doesn't plan to give broker dealers more time than they've already had to deal with a Federal Trade Commission identity theft rule that's effective Aug. 1.
Guidance posted Monday by FINRA, about how to comply with the Red Flags Rule means it expects adherence from the onset. The rule will be a likely focus of upcoming FINRA examinations and sweeps, say compliance consultants.
The FTC will require broker dealers to periodically reassess whether they offer or maintain certain types of accounts covered by the rule and, if so, have a written program for identity theft prevention. Such a program should include, at a minimum, policies and procedures to detect certain "red flags" that could indicate identity theft. Broker dealers would also have to update those policies in response to changing risks to customers.
The rule applies to financial institutions and creditors who offer or maintain certain types of accounts, which could include margin accounts. The rule initially caused widespread confusion among broker dealers and other industries about exactly who was affected, and as a result, the FTC extended the compliance deadline twice from its original Nov. 1, 2008 effective date.
As quoted in A DOW JONES COLUMN, Tim Pedregon, a Los Angeles-based compliance consultant and former FINRA examiner, says the self-regulator's interest in the Red Flags Rule mirrors activity beginning in 2002 related to a Patriot Act provision requiring financial institutions to establish money laundering procedures. The National Association of Securities Dealers included Patriot Act anti-money laundering compliance as a focus in its brokerage audits. It often imposed administrative fees for small infractions and, in more egregious cases, fines, he said. An enforcement sweep in about six months is also possible, says Pedregon.
*Suzanne Barlyn (WSJ) writes Compliance Watch, a column that focuses on compliance and regulatory issues affecting financial advisers. She may be reached at 212-416-2230 or by email at suzanne.barlyn@dowjones.com)
Red Flags Rule - Could FINRA treat this like AML & the USA Patriot Act?
FINRA doesn't plan to give broker dealers more time than they've already had to deal with a Federal Trade Commission identity theft rule that's effective Aug. 1.
Guidance posted Monday by FINRA, about how to comply with the Red Flags Rule means it expects adherence from the onset. The rule will be a likely focus of upcoming FINRA examinations and sweeps, say compliance consultants.
The FTC will require broker dealers to periodically reassess whether they offer or maintain certain types of accounts covered by the rule and, if so, have a written program for identity theft prevention. Such a program should include, at a minimum, policies and procedures to detect certain "red flags" that could indicate identity theft. Broker dealers would also have to update those policies in response to changing risks to customers.
The rule applies to financial institutions and creditors who offer or maintain certain types of accounts, which could include margin accounts. The rule initially caused widespread confusion among broker dealers and other industries about exactly who was affected, and as a result, the FTC extended the compliance deadline twice from its original Nov. 1, 2008 effective date.
As quoted in A DOW JONES COLUMN, Tim Pedregon, a Los Angeles-based compliance consultant and former FINRA examiner, says the self-regulator's interest in the Red Flags Rule mirrors activity beginning in 2002 related to a Patriot Act provision requiring financial institutions to establish money laundering procedures. The National Association of Securities Dealers included Patriot Act anti-money laundering compliance as a focus in its brokerage audits. It often imposed administrative fees for small infractions and, in more egregious cases, fines, he said. An enforcement sweep in about six months is also possible, says Pedregon.
*Suzanne Barlyn (WSJ) writes Compliance Watch, a column that focuses on compliance and regulatory issues affecting financial advisers. She may be reached at 212-416-2230 or by email at suzanne.barlyn@dowjones.com)
Thursday, June 18, 2009
| FOR IMMEDIATE RELEASE | CONTACT: Steve Hudak (703) 905-3770 |
FinCEN Moves to Streamline Mutual Fund BSA Requirements Proposal Would Require Mutual Funds to File CTRs
VIENNA, Va. - The Financial Crimes Enforcement Network (FinCEN) issued a Notice of Proposed Rulemaking (NPRM) that would replace a mutual fund requirement to file IRS/FinCEN Form 8300 - Report of Cash Payments Over $10,000 Received in a Trade or Business - with a requirement to file FinCEN Form 104, Currency Transaction Report (CTR), which is standard for financial institutions. Both forms document a transaction in currency above $10,000, but differ in some technical aspects.
"If adopted this proposal will bring the mutual fund industry into greater conformity with the rest of the financial industry, which currently files CTRs," said FinCEN Director James H. Freis, Jr. "The proposal would also free mutual funds from having to report applicable transactions involving certain negotiable instruments by moving to the CTR filing requirement and reduce paperwork for mutual funds and help FinCEN more directly identify suspicious activity involving money laundering and fraud."
To make the change, FinCEN is proposing to include mutual funds within the general definition of "financial institution" in rules implementing the Bank Secrecy Act (BSA). By being defined as such, they will be subject to the scope of rules that require the filing of CTRs and the creation, retention, and transmittal of records or information on transmittals of funds and other specified transactions. Mutual funds are already subject to many similar regulatory requirements and BSA program rules. This change will serve to streamline their reporting requirements and make the information they provide more quickly available, and formatted more consistently, for use by law enforcement investigators.
The definition of "currency" for purposes of the CTR rule is different from and less inclusive than the definition of "currency" in the rule for Form 8300, therefore, mutual funds would only be required to file CTRs on cash transactions. The $10,000 threshold applies to transactions conducted during a single business day. Under the CTR rule, a financial institution must treat multiple transactions as a single transaction if the financial institution has knowledge that the transactions are conducted by or on behalf of the same person.
The proposed rule as published in the Federal Register is available on www.FinCEN.Gov. Comments are due to FinCEN by
###
Wednesday, June 17, 2009
Obama overhaul could stoke risk manager demand
Wednesday, Jun 17, 2009 3:47AM UTC
By Chavon Sutton
NEW YORK (Reuters) - Risk management, an area once seen as a dreary necessity on a Wall Street obsessed with high-stakes trading bets, is suddenly hot.
Demand for risk professionals, which has already picked up, is likely to be stoked further after the Obama Administration announces what are expected to be sweeping changes to the financial regulatory framework on Wednesday.
Risk managers are charged with balancing the risk-reward equation at financial firms, by using quantitative and qualitative inputs to make investment decisions.
But in the years prior to the financial meltdown, risk managers at financial institutions lacked clout and independence. The result was the failure of banks that wagered too much using borrowed money, like Bear Stearns and Lehman Brothers.
"In many instances risk managers did perform, given the constraints presented to them by senior management, but their advice wasn't taken," said Richard Apostolik, chief executive of the Global Association of Risk Professionals.
"Organizations didn't perceive the risk function as important and a bigger concern was the lack of independence."
The Obama administration's reform will include increased reporting requirements for issuers of asset-backed securities and derivatives, require brokers to hold a certain level of financial interest in the products they sell, and reduce reliance on credit rating agencies--measures that are expected to fuel demand for a wide range of risk professionals.
"The reform's focus on the complex structured products that got us into this mess will increase demand particularly at investment banks, hedge funds, and mutual funds in the short-term," said Craig Termotto, a recruiter for financial services recruiting firm Michael Page International.
'BOMBARDED WITH CALLS'
"We'll see rapid growth over the next 12 months and then a slowing, but it will continue better than it was."
Until now, risk management has been viewed as a cost center. But that is rapidly changing in today's risk-obsessed environment and creating opportunities particularly for professionals with prior lending or risk experience.
"I've been bombarded with calls from headhunters looking for experienced risk professionals," said Kevin Blakely, former Chief Executive of the Risk Management Association.
"Last year, I would get a call every three weeks for credit risk officers, but now I get three to four calls a week."
Blakely was poached from his position at the RMA and appointed Chief Risk Officer for Columbus, Ohio-based Huntington Bancshares on June 10.
Michael Page International said the risk group is its busiest.
Both U.S. and international "credit and counterparty, market, and quantitative risk job postings are up 20-25 percent from last year," Termotto said.
But despite a glut of finance professionals available in the market place, Blakely has found that finding strong credit risk officers and credit work-out professionals is like "finding a needle in a haystack."
Recruiters say that one reason for the difficulty is that candidates are being enticed by buyside firms, bond insurers, and smaller boutique firms that are untainted by having received bailout funds from the government's Troubled Asset Relief Program (TARP).
"The institutions who need more risk professionals are the sell side," said Gustavo Dolfino, president & founder of The WhiteRock Group, a financial services recruitment firm. "Good risk people aren't attracted to these firms because TARP makes it hard to pay people."
Still, the government's insistence on strong risk controls is making risk management -- once seen as a Wall Street backwater -- an increasingly lucrative career path.
"Three years ago, a managing director in investment banking made three times more than his risk counterpart," said Alan Johnson, managing director of compensation consultancy Johnson Associates. "Today, they only make twice as much and a lot of investment bankers don't have jobs, while risk managers do."
(Reporting by Chavon Sutton; Editing by Christian Plumb)![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=4ce88a4c-35bc-4594-84e9-9ea41cb77d75)
Wednesday, Jun 17, 2009 3:47AM UTC
By Chavon Sutton
NEW YORK (Reuters) - Risk management, an area once seen as a dreary necessity on a Wall Street obsessed with high-stakes trading bets, is suddenly hot.
Demand for risk professionals, which has already picked up, is likely to be stoked further after the Obama Administration announces what are expected to be sweeping changes to the financial regulatory framework on Wednesday.
Risk managers are charged with balancing the risk-reward equation at financial firms, by using quantitative and qualitative inputs to make investment decisions.
But in the years prior to the financial meltdown, risk managers at financial institutions lacked clout and independence. The result was the failure of banks that wagered too much using borrowed money, like Bear Stearns and Lehman Brothers.
"In many instances risk managers did perform, given the constraints presented to them by senior management, but their advice wasn't taken," said Richard Apostolik, chief executive of the Global Association of Risk Professionals.
"Organizations didn't perceive the risk function as important and a bigger concern was the lack of independence."
The Obama administration's reform will include increased reporting requirements for issuers of asset-backed securities and derivatives, require brokers to hold a certain level of financial interest in the products they sell, and reduce reliance on credit rating agencies--measures that are expected to fuel demand for a wide range of risk professionals.
"The reform's focus on the complex structured products that got us into this mess will increase demand particularly at investment banks, hedge funds, and mutual funds in the short-term," said Craig Termotto, a recruiter for financial services recruiting firm Michael Page International.
'BOMBARDED WITH CALLS'
"We'll see rapid growth over the next 12 months and then a slowing, but it will continue better than it was."
Until now, risk management has been viewed as a cost center. But that is rapidly changing in today's risk-obsessed environment and creating opportunities particularly for professionals with prior lending or risk experience.
"I've been bombarded with calls from headhunters looking for experienced risk professionals," said Kevin Blakely, former Chief Executive of the Risk Management Association.
"Last year, I would get a call every three weeks for credit risk officers, but now I get three to four calls a week."
Blakely was poached from his position at the RMA and appointed Chief Risk Officer for Columbus, Ohio-based Huntington Bancshares on June 10.
Michael Page International said the risk group is its busiest.
Both U.S. and international "credit and counterparty, market, and quantitative risk job postings are up 20-25 percent from last year," Termotto said.
But despite a glut of finance professionals available in the market place, Blakely has found that finding strong credit risk officers and credit work-out professionals is like "finding a needle in a haystack."
Recruiters say that one reason for the difficulty is that candidates are being enticed by buyside firms, bond insurers, and smaller boutique firms that are untainted by having received bailout funds from the government's Troubled Asset Relief Program (TARP).
"The institutions who need more risk professionals are the sell side," said Gustavo Dolfino, president & founder of The WhiteRock Group, a financial services recruitment firm. "Good risk people aren't attracted to these firms because TARP makes it hard to pay people."
Still, the government's insistence on strong risk controls is making risk management -- once seen as a Wall Street backwater -- an increasingly lucrative career path.
"Three years ago, a managing director in investment banking made three times more than his risk counterpart," said Alan Johnson, managing director of compensation consultancy Johnson Associates. "Today, they only make twice as much and a lot of investment bankers don't have jobs, while risk managers do."
(Reporting by Chavon Sutton; Editing by Christian Plumb)
Thursday, June 11, 2009
Does the recent Level 6 Influenza Pandemic Announcement Indicate a Force Majeure Event?
The World Health Organization (WHO) has announced a Level 6 flu pandemic, which may prompt many businesses to call a force majeure on their contracts. The Level 6 pandemic is being called by WHO because the swine flu (H1N1 virus) has developed into an out-of-control, world-wide pandemic and drastic measures must be taken.
The announcement came at
The effect reaches far beyond the immediate impact on local, regional or global health. There is a lot of chatter in blogs and elsewhere about the effect on the global economy and the abilities of organizations to provide contracted goods and services. One of the ripple effects could likely be realized within many business contracts, under the force majeure clause.
A force measure usually indicates an Act of God, be it earthquake, landslide, flood, or any other act or occurance that is 'beyond human control'. Acts of Terrorism and other forms of violent conflict also would often fall under this same contractual provision.
A force majeure clause is usually placed within business contracts to allow one or more parties in a contract to stop meeting their obligations for that contract, because a situation has occurred that is beyond everyone’s control. Pandemics are typically listed as one of the reasons for calling a force majeure.
So how will this affect commerce and business contracts in place?
This could have significant (and potentially far-reaching) consequences that go far beyond the immediate impact of the moment. What would be the impact -- either regionally or locally -- from large numbers of employees at firms who have the flu?
Day-to-day performance levels of companies are already being affected - sometimes drastically - in parts of the world by high levels of employee absenteeism due to H1N1 outbreaks, either because employees are sick themselves or because they are caring for family members who are. Add to this the by still more employees who stay home to avoid getting sick.
With the world seemingly becoming smaller by the day, the far-reaching effects of this situation remain to be fully realized. There is no doubt that this will likely have a markedly negative impact on the global economy. Many experts are comparing the current outbreak of H1N1 virus to the 2003 outbreak of Severe Acute Respiratory Syndrome (SARS), which is estimated to have cost cost the region between $18bn and $60bn in lost output - or 0.5-2.0% of regional GDP (according to estimates by the Asia Development Bank).
As this story continues to unfold, it certainly seems that the time has already come for firms to review contracts that are in place to determine how this escalating situation could affect their operations and their abilities to provide goods and services. Likewise this situation should sound a gong within organizations concerning performing due diligence both on existing contracts and on future relationships and agreements. The impact on the operational security of organizations and the effect on the bottom line are too great not to assess how this situation may touch your organization.
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