Software king of the world, Microsoft, has been helping Inspector Knacker of the Birmingham Yard finger the collars of some software fraudsters.
A Birmingham man and a woman and a bloke from Swindon have been detained by police and released pending further investigation. A 65 year old woman was questioned, while another suspect is still being hunted.
An Indian court has convicted the former chief of outsourcing giant Satyam, Byrraju Ramalinga Raju, and his mates over a massive accounting fraud.
Raju was the former chairman of outsourcing giant Satyam, and the case has tied up the Indian courts for nearly six years. All 10 accused,were found guilty by a special court in Hyderabad.
It was touted as the biggest accounting fraud in the country, and it first came to light in early 2009 after Raju confessed that he doctored key financial results and created a fictitious cash balance of more than US$1 billion.
Before that he overstated profits for several years, inflating the amount of debt owed to the company and understated its liabilities.
He was arrested two days later after he confessed to the fraud, along with his brother Rama Raju and others. They were charged with cheating, criminal conspiracy, forgery and breach of trust under relevant sections of the Indian penal code.
Satyam was once one of India’s biggest IT outsourcing companies. It was sold to Tech Mahindra in April 2009 in a government-overseen auction, which later absorbed the company in full.
Also involved in the case was Pricewaterhouse Coopers, which was in charge of auditing the firm when the scandal broke. So far there has been no indication what will happen to that outfit — after all they must seen the books and should have spotted what was happening.
The sentences will be announced on tomorrow. All 10 accused are presently out on bail.
Cooling product company Zalman has gone bankrupt following the discovery of some somewhat unorthodox actions by its CEO and vice presidents.
The South Korean company was thought to be doing well, as its products were under the bonnet of rather a lot of PCs.
The reason for its bankruptcy is not anything to do with its own products or performance, in fact this news shocked Zalman employees. What appears to have happened is that the company has collapsed is due to the actions of its parent company Moneual, and its CEO and vice presidents.
Moneual CEO Harold Park, and vice presidents Scott Park and Won Duck-yeok, have, or so it is alleged, spent the last five years producing fraudulent documentation relating to the sales performance of Zalman.
They had been giving inflated sales figures and export data for Zalman’s products to get loans from the bank, it’s alleged.
By increasing sales and exports, Park and his associates were able to secure bank loans totalling $2.98 billion, it’s alleged.
According to The Korea Times, Moneual failed to repay its huge export bonds that matured on October 20, 2014, and filed for bankruptcy. Zalman’s stock price also began a quick downfall. However, the numbers just do not add up – Moneual has been repeatedly reporting major profits, with their 2013 annual report being nearly 1.2 billion dollars in sales and over 100 million dollars in profit. Regulators investigated and it appears that there was evidence of a well-designed corporate fraud.
Moneual allegedly acquired Zalman in 2011 as part of the fraud. They are said to have forged Zalman’s export and accounting documents, greatly overstating their export and income reports, in order to become eligible for huge bank loans. The employees knew that the company was a sham but, despite the unearthly profit reports of the past few years, no government officials noticed.
Moneual received about $620 million in loans from several Korean banks and another 275 million dollars as export credit from the Korea Trade Insurance Corp, making the owners of Moneual richer by nearly $900 million.
The company’s owners have been arrested and, alongside many top and mid-level executives of the company, are now facing prison if convicted of the charges. However Harold Park has US citizenship and his brother has Canadian, and there’s some concerns that Korean law could face trouble prosecuting them.
No one expects Zalman to survive. The company does hold a number of patents relating to cooling and fan noise reduction technology and it seems likely a patent sale will happen eventually. However, these are unlikely to be worth $3 billion.
Online fraud is on the increase, providing a windfall for security firms trying to pitch packages to cash strapped businesses.
The latest figures from the National Fraud Authority show that account takeover fraud rose by 53 percent compared with the previous year.
This means that those frauds where the criminal requires identity details accounted for almost two thirds of all frauds recorded by CIFAS in 2012.
More than 8.8 percent of UK adults were a victim of this fraud and those who lost cash tended to lose an average of £1,203 each.
Stephen Harrison, National Fraud Authority Chief Executive estimated that this year’s AFI has put the loss to the UK economy from fraud at £52 billion.
He said that private sector businesses suffer the highest levels of loss and can also suffer other impacts like reputational damage. Loss to smaller businesses can even put their future at risk.
Trusteer, which makes products for cybercrime prevention, said it has seen an increase in the number of Man in The Browser (MiTB) malware activity, and in the sophistication and techniques cybercriminals use to steal credentials and credit card data.
A Trusteer spokesperson said that as infection rates increase, account takeover fraud, and account fraud, is becoming a top threat for organisations.
This is not just a matter of providing companies with software or hardware to fix.
Companies need to come up with a holistic approach which encompasses endpoint security as well as clientless detection and conclusive event correlation is required.
This means that security resellers are having to create layered security covering PC and Macs, desktops and mobile, client and client-less solutions.
Labour MP Clive Betts has expressed concern that the ICT behind the Universal Credit system are not up to scratch – and that that he has heard evidence that fraud detection is still at an early stage in development.
In a report from the Communities and Local Government Committee, Betts said the Department for Work and Pensions has to “provide swift assurance that the transition to Universal Credit will not leave the benefit system vulnerable to fraud”. This could prove particularly embarrassing for the Coalition as Conservative politicians have claimed the reforms are partly to prevent fraud.
The first trial will begin late this month in Greater Manchester, the BBC reports..
Director of cybersecurity at Thales UK, Ross Parsell, warned that MPs are “absolutely right” to flag their concerns.
“Although the Public Sector Network (PSN) will provide a secure back-end communications infrastructure, a question mark still remains over whether the government will be able to verify, manage and protect the identity of claimants is still under question,” Parsell said.
Parsell said that although it is possible to apply for a passport or a new driving licence online, the citizen is paying cash to the government – to date we haven’t seen a system that works the other way round, and this “is where the risk likes”.
“If a high percentage of transactions are fradulent, the government could come under severe pressure,” Parsell said. “With 1.56 million people claiming Jobseeker’s Allowance at a minimum of £56.25 a week, just that element of welfare presents a £4.56 billion fraud risk over the course of a year”.
Parsell suggested a possible answer would be using a chip & pin system for authentication.
A criminal who was running a multi million pound scam on the back of mobile phone and CPU sales has received a further 10 years in prison for failing to pay a £14 million confiscation order, HMRC has said.
In a statement, HMRC reported Jasbinder Bedesha was sentenced to seven and a half years in prison in 2008 for his role in a missing trader VAT fraud. Mobile phones and CPUs would be imported mostly from Dubai, via Europe, into the UK, and then be sold on through other companies – but with VAT added. Once they were sold on several times they would be exported back to Europe, so the conspiracy could then claim back VAT credit on the purchase of goods. This, of course, was never paid to begin with.
Cash from the scam was laundered through companies in Dubai and Spain before dividing the profits.
Assistant director of criminal investigation for HMRC, Dave Cowie, said in a statement the further ten years shows revenue and customs’ muscle, that it will “pursue every avenue to return the proceeds of crime to the nation or defendants will face severe consequences”.
He said HMRC will continue its investigations to find the missing cash.
This was a planned and “ruthless” attack, Cowie said, to steal “vast amounts of public money”.
“They enjoyed extravagant lifestyles, exclusive homes, performance cars and designer jewellery,” Cowie said, “ultimately at the expense of law abiding tax payers”.
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