Date | Subject | Description |
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2013 | Terrorism Financing | Report (STR): The SIC received a suspicious transaction report from a local bank after the compliance officer came across media reports that unveiled names of individuals possibly linked to terrorist acts against government and security forces on Lebanese soil. Analysis & Investigation: The SIC initiated its investigation and obtained all bank records including KYC forms, bank statements and copies of identification documents from the concerned bank. The analysis of the account movement revealed that several checks were deposited at other banks. Bank records and statements were obtained from other banks, and a similar pattern of transactions across the concerned banks mainly consisting of cash and check deposits followed by cash and check withdrawals was noted. Subsequent Measures: Banking secrecy was lifted, bank accounts were frozen and investigation findings were forwarded to the General Prosecutor. |
2013 | Credit Card Fraud | Report (STR): A local bank opened an account for a company after carrying out the required CDD measures and obtaining the necessary identification documents. The company’s line of business was catering and bakeries and had also signed a franchise agreement with another company to sell its products. Upon its request, the company was provided with a point of sale (POS) terminal. Several months later, the bank depicted unusual credit card activity that reflected nightly use of credit cards issued from several countries in Asia, South America and the Gulf. Analysis & Investigation: The SIC initiated its investigation after receiving a STR from the bank. Information gathered from the bank and from credit card companies revealed several operations through the said POS terminal that turned out to be fraudulent. During one night, 16 operations amounting to USD /108,000/ using credit cards issued from several countries in addition to 30 transactions using credit cards issued locally were declined. The owners of the company claimed that the proceeds were from business sales and from compensation for the termination of the signed franchise agreement. A look at the obtained documents showed no clauses for such compensations. No logical justification for the transactions was reached and the bank advised the SIC of several claims from credit card companies. Subsequent Measures: Having finalized its investigation, the SIC decided to lift banking secrecy, freeze concerned bank accounts and forwarded its findings to the General Prosecutor in accordance with Lebanese Law No. 318. In addition, as a precautionary measure and to avoid future misuse the bank denied the company use of the POS terminal and notified the concerned credit card companies.
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2013 | Healthcare Fraud | Report (STR): A local bank filed a STR with the SIC after receiving from a correspondent bank information on one of its customers involved in healthcare fraud. A court in the correspondent bank’s jurisdiction had also confiscated assets belonging to the said customer. Analysis & Investigation: The legal charges brought against the suspect, including illegally prescribing controlled substances, earning funds after engaging in unnecessary procedures against insurance claims and depositing ill-gotten proceeds in numerous bank accounts, were reviewed. The SIC obtained CDD records and bank statements from the concerned local bank and analyzed the account movement. Transfers totaling hundreds of thousands of dollars were wired to the suspect’s account, and were followed by several cash withdrawals. The suspect claimed that the funds were proceeds from his overseas practice. Subsequent Measures: The SIC decided to freeze existing account balances, lift bank secrecy on relevant accounts and forward the case to the General Prosecutor. |
2013 | Ponzi Scheme | Report (STR): The compliance officer of a local bank noticed changes in the pattern of transactions and an increase in account activity of a high-risk customer, and became dissatisfied with the justifications and documentation provided by the said customer. An STR was consequently filed with the SIC. Analysis & Investigations: The SIC obtained from the bank in addition to bank records and statements of account, all existing documents including financial statements, contracts, and legal documents available in the customer's file. It was evident from the preliminary analysis performed that the changes in account behavior were inconsistent with the CDD information. The suspect had obtained loans against collaterals on both his personal account and his company’s accounts claiming that it was to fund real estate projects and financial markets operations. Moreover, several high-value checks issued by the suspect bounced for exceeding his credit line. His bank accounts reflected multiple cash deposits/withdrawals, check deposits from third-party investors only to be followed by transfers to mutual funds and brokerage firms abroad. SIC investigation also revealed that the suspect held accounts at other banks and financial institutions in Lebanon, as well as a power of attorney over several customers’ accounts. The analysis of transactions and statements of accounts carried out by the SIC at other banks depicted a similar pattern of activity. Subsequent Measures: Suspicion of a possible Ponzi scheme grew especially after knowing that the suspect left the country. As such, the SIC decided to freeze all relevant bank accounts, lift bank secrecy and forward the case to the General Prosecutor. Moreover, several FIUs were contacted for assistance on the case. |
2013 | Internet Fraud | Report: The SIC received a STR from a bank on transactions involving the selling of stocks and executing cross-border electronic transfers. Analysis & Investigation: The SIC investigation into the matter revealed that the bank received an email with instructions to sell a certain number of stocks worth tens of thousands of dollars, and transfer the resulting proceeds to overseas bank accounts. Believing that the instructions to sell the stocks were from an existing customer, and being comfortable with the fact that the proceeds were to be transferred to bank accounts held by the same customer, the said transactions were executed. Later on the bank discovered that the actual customer was unaware of the transactions. The KYC form and documents obtained by the SIC including the instructions sent via email revealed that a similar email address was created by an anonymous individual and used to correspond with the bank. Moreover, the victim’s signature was also fraudulently used. A careful review of the documents showed that the signature was “pasted” under the written instructions. Information made available to the SIC indicated that the overseas bank accounts held in the customer’s name were opened via forged identification documents. Subsequent Measures: With the increase of cybercrimes and identity fraud, the SIC asks that reporting entities have in place strict controls for customer verification prior to executing internet based transactions. |