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.
|2013||Embezzlement of Private Funds||
Report (STR): The SIC received a request of assistance from the Lebanese General Prosecutor concerning acts of forgery and scam that led to the embezzlement of private funds that were believed to be deposited at local banks.
Analysis & Investigation: The request included information on a foreign national residing in a neighboring Arab country who presented himself and his associate as influential figures and representatives of a regional company in a commercial transaction that involved buying & shipping products at a very competitive price. In preparation for the scam, the foreign national and his associate forged documents (invoices, bill of lading, etc…) which were presented to the victim. Subsequently, a contract was signed between both parties laying out a number of terms and conditions, among which the victim was required to present a banker check for an amount of USD 1.2 million, to be cashed only after the products were received at the final destination and inspected. The foreign national was able to deceive the victim by taking possession of the banker check and left the country. The SIC work focused on tracing the ill-gotten funds and found that a power of attorney was used to deposit the check at a local bank. SIC investigation also revealed that several transactions followed with a clear intention of concealing the origin of the funds some through the purchase of high value goods such as gold.
Subsequent Measures: Banking secrecy was lifted, bank accounts were frozen and investigation findings were forwarded to the General Prosecutor.
Report (ROA): The SIC received a request of assistance, via the Egmont Secure Web (ESW), from a Counterpart FIU on behalf of its national police (Indirect Diagonal Cooperation). The requesting FIU was seeking assistance in an ongoing TF investigation involving several of its nationals, and needed specific financial information on certain cross-border transactions relating to the case.
Analysis & Investigation: Information available to the SIC revealed that one of the suspects was allegedly laundering proceeds of crime through Europe, Middle East and Asia. Moreover, investigations have shown that cash funds and other funds relating to fraud and tax evasion offences were being transferred out of the requesting FIU’s country to the benefit of organizations being scrutinized for possible involvement in terrorist activities. Bank records obtained by the SIC revealed that one of the suspects with dual citizenship had recently opened an account at a local bank. A review and analysis of the bank statements revealed several incoming wire transfers totaling around USD 600,000 originating from the requesting FIU’s country followed by numerous cash withdrawals leading to a negligible account balance.
Subsequent Measures: To assist in the ongoing investigation, the findings were forwarded to the requesting FIU.
Report (STR): A company owned by a foreign national opened an account via proxy at a local bank. At the time, the bank obtained the necessary identification documents and performed the customer due diligence requirements on the customer and the proxy holder. The account received several transactions during the year, one of which was a wire transfer for a significant amount that was flagged by the compliance officer. The company’s representative was asked to produce supporting documents to substantiate the transfer and the funds. Unsigned invoices and transportation documents were submitted with information that seemed inconsistent with the wire transfer circumstances (difference in dates, quality, quantity and value of goods). Moreover, the company’s representative was unable to submit the sales contract and the company’s audited balance sheet. Consequently, an STR was filed with the SIC.
Analysis & Investigation: The SIC preliminary investigation and analysis of received bank records, account statements and KYC forms showed a profession with a modest account holder’s financial status and also revealed that the company’s account had received several incoming transfers for a few million dollars followed immediately by outgoing transfers for similar amounts. No plausible reason or economic justification for maintaining a bank account at a Lebanese bank was found and gathered information didn’t clarify the relation between the originator of the transfer and the company. Furthermore, information received from a counterpart FIU showed that the general manager of the company in question is subject to an ongoing investigation related to fraud, bad management and money laundering offences.
Subsequent Measures: The SIC decided to freeze the funds, forward the case to the General Prosecutor and share its findings with a counterpart FIU.
Report (STR): A local bank opened in 2012 an account for a Lebanese national and carried out the required CDD measures. The bank obtained the necessary identification documents and filled out a KYC form documenting among other things information on the account holder’s modest financial status and public sector profession. As risk-based approach (RBA) requirements dictate, the customer was classified as a “PEP” and placed under enhanced monitoring. A few months after, the bank’s system flagged the said account for receiving multiple cash deposits in amounts below the USD 10,000 threshold limit, an act clearly intended to avoid filling the cash transaction slip (CTS) requirement. When asked about the source of funds, the customer showed nervousness and provided contradictory information claiming first that they were withdrawals from his other bank account, and then claiming that they were commission fees resulting from the sale of real estate. An STR was filed with the SIC.
Analysis & Investigation: The SIC preliminary analysis of received bank records, including the KYC form showed a modest financial status and an occupation that did not warrant 27 cash deposit operations totaling around USD 260,000. The customer’s choice of the bank branch, being far from his home and work address and both the analysis of the account movement and the bank’s inability to obtain supporting documents to substantiate the account holder’s claims added to the existing level of suspicion. The gathered information pointed towards possible acts of corruption.
Subsequent Measures: The SIC decided to freeze the funds, lift banking secrecy and forward the case to the General Prosecutor.