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LICFE July 1999 |
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LICFE July 1999 |
NOTICE OF ELECTIONS The Nominating Committee of the LI-CFE has nominated the following individuals for the offices indicated. All CFEs whose membership is current and in good standing are eligible to vote. Please cast your ballot “For” or “Against” each nominee by checking the appropriate box. Ballots may be mailed to LI-CFE, attn: Legal Committee, 87 Bethpage Road, Hicksville, NY 11801 or faxed to (516) 739-2716. To vote by E-mail, include your complete name (not your screen name or e-mail address) and each nominee’s name followed by “For” or “Against” and send to ForJBuck@aol.com. Please indicate “election ballot” in the “subject” line. Ballots must be received by July 30, 1999.
[Term of Office is one year for Members-At-Large, two years for all others)
IF YOU MISSED THE LAST MEETING…. If you weren’t fortunate enough to make the last meeting on May 13th, the case of the month was presented by Joe Croce, CFE and charter member of our Long Island Chapter, ACFE. Detective Croce is an 18 year veteran of the New York City Police Department and has been assigned to the Special Frauds Squad for the past 4 years. Detective Croce, who specializes in securities fraud, presented an on-screen case study into the fraudulent redemption of securities in abandoned accounts at a well known New York City brokerage firm. In this particular case, two disgruntled employees at the victim firm banded together to free up frozen abandoned accounts. By posing as the true account holders, our subjects would present change of address requests and add secondary payees who were in fact hired cronies willing to launder the ill gotten proceeds. Mr. Croce even pointed out that our subjects were astute enough to place suppression codes on the compromised funds, which prevented capital gains tax forms from being generated. Had the main subject of this investigation not gotten greedy and compromised an active account, he along with his accomplices could have continued for an indefinite period of time. Mr. Croce presented the paper trail, which led to the two inside collusive employees as well as the three outside accomplices. The total fraud exceeded $350,000.00 on only four fraudulently generated checks. Mr. Croce is also part of our Chapter’s editorial staff and an active member of the NYC chapter. As a member of the NYPD Special Fraud Squad, Detective Croce has volunteered his services should any of our members have a case within the five boroughs that needs to be handled criminally. Joe can be reached at 212-374-6850. Last meeting’s guest speaker was James Murray, CPA, CFE, who is the Senior Managing Director and President of Kroll Associates. Kroll Associates is one of the top corporate investigation firms in the industry with cases under its belt including tracking down Saddam Hussein’s hidden assets. Mr. Murray presented a Powerpoint presentation titled “Fraud in the New Millennium” which reminded us of early fraud schemes from the 1970’s and some of the latest schemes of the present. Mr. Murray discussed the similarities as well as the great differences in ways fraud schemes are committed due to the advances in technology. During this presentation, many examples were used involving schemes that have occurred and the methods in which they were uncovered. The Long Island Chapter would like to thank Mr. Murray for taking time out of his busy schedule to share his experiences and knowledge with us. 4 Top Credit-Related Frauds and How to Detect Themby Steve Gillmor Millions of Americans suffering from too much debt and bad credit histories are turning to fraudulent marketers, who charge their customers higher and higher fees for services that either don’t work or are illegal. The National Fraud Information Center (NFIC) recently reported that the fees charged to consumers for these dubious services have risen sharply in the past year, with some programs more than doubling. “These companies either call consumers directly or advertise for them to call to get loans, credit cards, credit-card protection or credit-repair services,” says Susan Grant, the NFIC’s director at the National Consumer League (NCL). Consumer debt keeps growingThe groups are taking advantage of the nation’s ever-growing reliance on plastic. Total consumer debt in the United States stood at more than $1.3 trillion in December, up 3% from November. And November’s debt was 11% higher than October’s. That’s about double what it was in 1991. Of that amount, about $556 billion is revolving credit. The result: a rising tide of delinquent payments and bad credit ratings that now total more than $50 billion. The NFIC tracks four credit-related telemarketing categories: advance fee loans, credit-card offers, credit-card loss protection and credit repair. The average loss per consumer rose in each category from 1997 to 1998, with advance fee loans jumping from $557 to $920 and credit-card loss protection mushrooming from $178 to $473. “It was a big jump, but I shouldn’t have been surprised,” says Grant, “because the fraud center counselors have been telling me for the last year that these companies have been asking consumers for more money than ever before.” Here’s a quick explanation of what each of these four categories represent: Credit repair: These companies claim to offer ways to improve your credit ratings. Credit counselors say the only legitimate way to improve a bad credit score is through negotiations with lenders and, ultimately, paying off the debts. Advance fee loans: Officering an advance fee loan is also illegal, though in this case it’s the scam artist who’s breaking the law, says Steve Baker, director of the FTC’s regional office in Chicago. “If somebody tells you that they’re certain they can get you a loan and charge in advance, that’s prohibited by our Telemarketing Sales Rues.” The rule gives consumers the power to stop unwanted telemarketing calls and gives state law enforcement officers the authority to prosecute fraudulent telemarketers who operate across state lines. Credit-card loss protection: These are programs that offer to cover any losses from stolen or fraudulently used credit cards. These offers are not fraudulent, per se, but consumers should be wary nonetheless, says Grant. “By law, they already have limited liability for lost or stolen credit cards. But what is fraudulent is that these telemarketers are contacting people pretending to be their credit-card issuer offering protection and making it sound like something the consumer’s automatically going to get now and not making it clear that there’s a fee.” Credit-card offers: Grant says they’re often not worth the plastic they’re printed on. “These cards are not MasterCard or Visa. They’re essentially a charge card that you can only use to buy merchandise from the seller’s own overpriced catalog. But in most cases, it’s more like an advanced-fee loan scam: People just plain don’t get anything.” Beyond those four, another fraud is rising to the fore. It’s known as file segregation, which is a take-off on identity fraud. Two of the coalition’s members, the Federal Trade Commission and the National Association of Attorneys General, recently filed 43 law enforcement actions against phony credit companies for file segregation. The defendants are accused of claiming to help consumers obtain new credit histories by substituting federally issued, nine-digit employee identification numbers for Social Security numbers. Using a false identification number to apply for credit is a felony, says Baker. “For $60 or $70, these companies send you a brochure which tells you that the next time you apply for credit, don’t use your Social Security number, which is going to pull up your real credit history from the credit reporting agencies. Instead, use this other number with the same number of digits, and supposedly you’ll create a whole new identity.” The key to avoiding any of these scams is to know some of the rules. “Telemarketers must tell you it’s a sales pitch. They can’t call before 8 in the morning or after 9 at night” says Edgar Dworsky, a former Massachusetts assistant attorney general who created an interactive telemarketing fraud Web site for the FTC. Dworsky says consumers can listen to a tape recording provided by the AARP that recreates a telemarketing scam that preys on lonely senior citizens. “Seniors come from a time when a handshake was a deal and you could take a person at his or her word. Unfortunately, that’s not the way of life any longer.” The FTC’s success in combating telemarketing fraud has driven many scam artists out of the country, says the NFIC’s Grant. “In the case of advance fee loans, 80% of the fraudulent telemarketers reported to the NFIC were located in Canada. They must figure that it will be harder for U.S. law enforcement authorities to come after them. And most of the payments are sent to the them by private courier services, which is clearly an attempt to evade the U.S. Postal authorities.” Reprinted by permission, Scam Watch MSN MoneyCentral
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