There is evidence to suggest that fraudsters are using ‘grooming’ tactics more frequently on unsuspecting organisations and individuals to commit financial crimes.

There is evidence to suggest that fraudsters are using ‘grooming’ tactics more frequently on unsuspecting organisations and individuals to commit financial crimes.

The Financial Investigation Bureau (FIB) of the International Chamber of Commerce knows of cases in which criminals groomed their victims over long periods to win their trust before ‘going in for the kill’.

One particular instance concerned a sum of €15 million in which fraudsters created many different layers of the transaction with various people involved, says FIB assistant director Cyrus Mody.

“This was done to give the victim the feeling that it was a genuine complex financial transaction.

“The scam is simply to disguise the moment the funds slip out to the victim’s control and are transferred to the fraudsters’ accounts,” he explained.

It is also vital that banks and investors ‘know their criminal’ when it comes to financial fraud such as money laundering, says Jim Anderson from Interpol.

He noted that in several high profile cases, which he had worked on, fraudsters’ targeted people with a clean and trusted banking relationship and then set out to exploit them.

Frauds involving the use of false ATM cards is also on the rise. Banks need to be on guard as fraudsters find new ways to launder money.

Perpetrators manipulate card processors with weak digital security to move money simultaneously from many ATMs around the world.

In one case involving ATM fraud, the culprits were able to withdraw over $45million from ATMs around the world during a single weekend.

They were a well-organised community having the required hacking skills. Like any multinational company, their structure included regional and country heads, mid-level management and operational teams working the ATMs in different cities worldwide. The fraud involved hacking the software controlling the dispensing of funds by the ATM and upgrading the credit limits of the bankcards using them so that unlimited amounts could be withdrawn.

Worryingly, this fraud tactic has already been repeated several times this year.

Fraud management specialists, advice a multi-layered approach, which needs to be updated frequently to keep pace with new challenges.

As always, due diligence and compliance is crucial in tackling fraud, and the direct involvement of senior management in any bank’s anti-money laundering compliance regime is essential.

So is the need for the compliance regime to be comprehensive throughout the different levels of a bank, says Matheos Charalambides from Eurobank Cyprus.

Igoris Krzeckovskis, an expert on East European money laundering and fraud schemes, warns companies not to view anti-money laundering rules with a ‘tick box’ mentality when they suspected fraud.

He suggests that a system should not be measured by the number of suspicious transaction reports received, but by the quality of the information they provided.

Detailed analysis, case studies and discussions of the above were held at the first ICC-FIB Financial Crime forum in Cyprus recently.

FIB provides its members with due diligence research, Know Your Customer intelligence and fraud checks, among other services.

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