compiled by verita management advisors pvt ltd · compiled by verita management advisors pvt ltd...

Compiled by VERITA Management Advisors Pvt Ltd

February 2017

Analysis of Major Media Stories that Indicate Serious Breach of Internal Controls

“ Coverage - October to December 2016”3rd Edition

Red Flag Indicators Report

1. Preface .................................................................................................................. 03

2. Banking................................................................................................................ 04 - 05A. Online Banking CheatingB. Debit card data breachC. Documentation FraudD. Fraudulent and Deceitful diversion of frauds

3. Financial.............................................................. ................................................ 06 - 09A.78 Indian Companies vanished after raising funds through public issueB. Misappropriation of MoneyC. Falsification of Financial StatementD. Cyber FraudE. Online Transaction FraudF. Fraud caller steals money from Jan Dhan Account

G. Violation of Banking Frauds

4. Frauds identified due to demonetisation..............................................................10 - 12A. Demonetisation Note FraudB. Debit and Credit card data stealing, OTP Fraud C. Fraudulent conversion of demonetised currencyD. Black Money depositE. False Bank Gaurantees

F. Fake account opened to deposit black money

5. General ...................,.............................................................................................13 - 15A. Forgery and wrongful acquisition of property

B. Real Estate Fraud C. Criminal conspiracy and Illegal transfer of Land

6. Our 1st Edition on Red Flag Indicators Report (Apr-Jun 2016)................................16

7.

8. About Verita & Disclaimer........................................................................................18

9. Contact us .................................................................................................................19

Our 2nd Edition on Red Flag Indicators Report (Jul-Sept 2016)..............................17

Index

Verita Management Advisors Pvt Ltdwww.verita.co.in


This publication aims to create awareness on the subject of Fraud Risk Governance. Fraud is a real risk impacting Indian organization in a big way. The techniques deployed by fraudsters are complex and usually masked in a web of falsehood, forgery and cheating.

Businesses find it very difficult to unearth frauds and serious control breaches therefore we believe that dissemination of Red Flag Indicators report and related information (primary goal of this publication) would assist in developing robust defense mechanisms.

It is famously said that forewarned is forearmed keeping this in mind our publication team has researched on newspaper and electronic media stories from leading portals on the subject of fraud and red flags. Post research a crisp compilation of red flag stories has been complied for readers highlighting the nature of breach, quantum of impact and modus of the operator to the extent available in public domain.

We welcome your valuable feedback and review comments on this publication on [email protected] and [email protected]

VERITA KNOWLEDGE MANAGEMENT TEAM

February, 2017MUMBAI

Preface


Red Flag Indicators Report3

Company

Sector

Nature

Modus

Quantum & Impact

Source

Web link:

: Alwar bank

: Online Booking

: Cheating

: The duo i.e. Father and Son in this case cheated thousands of customers using fraudulent travel website. They had used credit cards to book their tickets, which had since been blocked. Though the money was withdrawn from their bank accounts, the tickets never arrived.

: Investigations into the Rs 16-crore embezzlement case has revealed more shocking facts about 37-year-old BBA graduate Abhishek Joshi and his father Ashok Joshi on Thursday. The father-son duo had set up a fake travel company through which they cheated thousands of customers. Prior to this online fraud, the Delhi police had also launched a massive man hunt for Abhishek and his father who had allegedly duped thousands of people and cheated the ICICI Bank to the tune of Rs 3.3 crore. "The fraud came to the notice of the economic offences wing of the Delhi police in 2010 when several customers wrote to the bank regarding a fraudulent travel website cheating them of their money. They had used credit cards to book their tickets, which had since been blocked. Though the money was withdrawn from their bank accounts, the tickets never arrived," said a senior officer of the SOG. In the FIR filed in Delhi, the ICICI bank official had stated that the bank had suffered a loss of Rs 3.3 crore.

: Times of India

http://timesofindia.indiatimes.com/city/jaipur/alwar-bank-conmen-by-us-agency-for-credit-card-fraud/articleshow/56131208.cms#

BANKING CASES

1. Alwar bank conmen by US agency for credit card fraud



2. 73 State Bank Of India Cardholders Report Fraud Withdrawals

Company

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

: State Bank of India

: Banking

: Debit card data breach

: The Debit card data breach resulted in fraudulent withdrawals

: As many as 73 cardholders of the country's largest bank State Bank of India had reported fraudulent withdrawals of a total of Rs. 39.18 lakh till November 4 following data breach that hit millions of ATMs. State Bank of India (SBI) has informed that it has blocked about six lakh cards, Minister of State for Finance Santosh Kumar Gangwar said in a written reply in Rajya Sabha. The state-owned lender said however that its "systems" are robust and its debit cards are not at risk.

The Reserve Bank had earlier said it came to its notice on September 8 that details of certain cards issued by some banks had been possibly compromised at ATMs linked to the ATM Switch of one of the service providers. About 32.14 cards of public and private sector banks was breached. Following the data breach, 19 banks had recalled the compromised cards. Independent investigation by a forensic auditor approved under Payment Card Industry Data Security Standard (PCI-DSS) framework is under process. RBI has been carrying out IT examination of banks from last year

: NDTV News

http://www.ndtv.com/india-news/73-state-bank-of-india-cardholders-report-fraud-withdrawals-1628876



3. Man Held For Cheating Banks In Kolkata with Rs. 40 Crore

Individual:

Nature of Fraud

Modus

Quantum & Impact

Source

Web Link:

Arindam Ghosh Dastidar

:Cheating

:The accused in this case, produced fake PAN cards and driving licenses to banks to take loans.

: A 36-year-old man was arrested on Saturday on the charge of defrauding around Rs. 40 crore from different banks of the city and its suburbs, police said. Acting on a tip off, the police picked up Arindam Ghosh Dastidar from his residence at Dhakuria in south Kolkata for allegedly swindling around Rs. 40 crore from different banks in the form of loans. Police said 17 credit cards and several fake PAN cards were seized from him. Dastidar was even running a small printing press from where he used to produce fake PAN cards and driving licenses, the officer said. Talking about his modus operandi, officials of Kolkata Police Bank Fraud section said Dastidar used to rent rooms in different parts of the city and the suburbs in the pretext of opening offices of organisations. Then he used to recruit people at these fake organisations and open salary accounts for them at banks at those localities, he said. "And then he used to apply for loans from banks on behalf of such fake companies showing fake IT returns as well as PAN cards. He managed to cheat the banks around Rs. 40 crore," the IPS officer said. However, it was still not clear since when he was involved in this fraud.

: NDTV News

http://www.ndtv.com/kolkata-news/man-held-for-cheating-banks-in-kolkata-with-rs-40-crore-1636453

Company

Sector

Nature

Modus

Quantum & Impact

Source

Web Link

: VSoft Technologies

: Software

: Fraudulent and deceitful diversion of funds

: The case is about deceitful diversion and fraudulent diversion of funds to the related party. Peepul Capital, the investor company filed a complaint with Hyderabad police against accused company i.e. VSoft Technologies. The CEO of the accused company is charged with diverting funds from VSoft Technologies to another company which he and his wife jointly own.

: VSoft Technologies is primarily accused of fraudulent and deceitful diversion of funds to a related party, amounting to Rs. 25 crore. The legal tussle is still on wherein the CEO claims that the funds paid to the said related party, i.e. Smart Staffing was expense for the services received and was duly disclosed in the books of the company.

: Economic Times

: http://economictimes.indiatimes.com/articleshow/54418638.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

4. Fraud by Investee Company

Company

Sector

Nature

Modus, Quantum & Impact

Source

Web Link:

: 78 Different companies from different locations

: Corporates

: The case appears to be the case where the 78 companies failed to file documents and balance sheets after raising funds through public issues and are now untraceable.

: About 78 companies are untraceable after having raised Rs 312 crore from investors, with Gujarat having the maximum number such entities - 17. These entities are, among others, from Tamil Nadu, Maharashtra, Madhya Pradesh, West Bengal, Uttar Pradesh, Odisha and Punjab. Vanishing companies are those that fail to file documents and balance sheets after raising funds through public issues and are untraceable. Cumulatively, these 78 vanishing companies have raised about Rs 312 crore. Gujarat, at 17, has the maximum number of such firms. Other such companies include 13 in Andhra Pradesh, 10 in Tamil Nadu and 9 in Maharashtra. Besides, West Bengal, Madhya Pradesh and Delhi have 5 vanishing firms each. A total of 238 companies were initially identified by the Ministry of Corporate Affairs as 'vanishing companies', which raised money through public issues, Minister of State for Corporate Affairs Arjun Ram Meghwal said in a written reply to the Lok Sabha. Of these, 160 companies have been deleted from the list as they were subsequently traced. Presently, only 78 companies remain untraced. Besides, the ministry has ordered probe into the affairs of 185 companies through Serious Fraud Investigation Office (SFIO) in more than three financial years. This includes 24 firms in the current fiscal. These firms were allegedly running illegal chit-fund, ponzi and multi-level marketing entities. Also, they were involved in unauthorised collection of funds from the public, Meghwal said.

: Hindustan Times

http://www.hindustantimes.com/india-news/78-indian-companies-vanished-after-raising-funds-through-public-issues/story-8xhm7wRuFA3o7mSSMSlgqO.html

Group of Individuals

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

: Harshad Mehta, Sudhir Mehta, Bank officials and Stock Brokers.

: Stock market (Broking)

: Misappropriation of money

: It appears to be the case of conspiracy with an object to commit a criminal breach of trust by misappropriating the funds of NHB with an intention to obtain valuables, securities and pecuniary advantage to the accused Harshad Mehta without any public interest.

:Twenty-four years after the securities scam broke, a special court convicted Harshad Mehta's brother Sudhir Mehta and five others, including senior bank officials and stock brokers, in a case relating to defrauding of National Housing Bank to the tune of more than Rs 700 crore. The case against Harshad Mehta, who was one of the prime accused, abated after his death in 2002. The CBI said that the bank officers transferred the funds to the accounts of Mehta, by showing fake transactions of purchase of securities from SBI by preparing forged documents with the help of stock brokers. Ten cheques totalling over Rs 700 crore were issued for the transactions.

: Economic Times

http://economictimes.indiatimes.com/news/politics-and-nation/24-years-on-Harshad-Mehtas-brother-5-others-convicted-of-Rs-700-crore- faud/articleshow/55679932.cms

1.78 Indian companies 'vanished' after raising funds through public issue

2. 24 years on, Harshad Mehta's brother, 5 others convicted of Rs 700 crore fraud



FINANCIAL CASES

Company

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:http:

: Quadrant 4

: Corporates

: Falsification of Financial statements

: The two managed to produce false financial statements related to two acquisitions and settlement of a lawsuit against the company and also made false financial statements to SEC. The fraud was undertaken by them in order to inflate its stock prices.

: Two top Indian-American executives were arrested in the US for allegedly misrepresenting their company's finances to inflate its stock price. Nandu Thondavadi, 62, CEO of Schaumburg-based Quadrant 4 System, and Dhru Desai, 55, its chief financial officer and chairman, were charged with wire fraud and certifying false financial reports related to two acquisitions and the settlement of a lawsuit against the company in 2013. Both appeared in Chicago federal court to hear the charges, which carry a maximum penalty of 20 years each for wire fraud and certifying false financial reports. The firm reported USD 52 million in revenues and a net loss of USD 516,000 for 2015, according to financial filings. As a publicly traded company, Quadrant 4 is required to provide to the SEC on a quarterly and annual basis a detailed report of its financial condition. The investigation revealed that Thondavadi and Desai certified the reports even though they knew the documents did not fairly present the true financial condition of the company, according to the complaint. Thondavadi then lied under oath when questioned by the SEC in May about some of the falsehoods, the complaint states.

: Economic Times

//economictimes.indiatimes.com/news/international/world-n e w s / i n d i a n - a m e r i c a n - e x e c u t i v e s - a r r e s t e d - o n - f r a u d - c h a r g e s - i n -us/articleshow/55721746.cms

3. Indian-American executives arrested on fraud charges in US



Nature

Modus

Quantum & Impact

Source

Web Link:

: Cyber Fraud

: This appears to be the case of duping people by using their card data to make own expenses. The callers are well versed in banking jargon which they mention during the conversations with gullible victims. Thus they manage to convince the victims to part with important details pertaining to debit or credit cards.

: Pawan Verma, was recently duped of Rs 75,000 by an online fraudster gang. On Receipt of call from person demanding ATM card data, the worker of a flour mill shared details as demanded by person as he was facing problem with withdrawing money after demonetization, and within minutes got a message on his mobile phone that someone did an online shopping of Rs 75,000 using his card. 38 cases of online fraud have been reported with the city's cyber cell between November 9 and December 20 against just five to eight cases a month before cash ban. And on an average, victims are losing anything between Rs 25,000 and Rs 50,000 per transaction, say officials. Similarly, Rajiv Jain, an Indirapuram resident, fell prey to fraudsters. He was duped of about Rs 10,000 in a similar fashion. He got a call saying his card has been blocked and to resume service he shared his card data.

: Times of India

http://timesofindia.indiatimes.com/city/noida/Spurt-in-cyber-fraud-as-online-transactions-go-up/articleshow/56110767.cms

4. Spurt in cyber fraud as online transactions go up

Company

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

: Paytm

: Online Transactions

: Cyber Crime

: This case is appearing to be the case of earning money with intension to mislead the company. the accused persons first acquired knowledge as to how the system of company works and then conspired to book orders, take deliveries of products at common addresses known or belonging to them and their accomplices and then made or managed false and fabricated entries in the computer system of the company

: The alleged complicity of Paytm's own employees in defrauding the company in cahoots with private individuals has come under the scanner of Central Bureau of Investigation (CBI). The country's premier investigating agency has registered two cases on complaints of fraud of nearly Rs 10 lakh made by One97Communications Limited, the parent company of Paytm. A total of 22 private individuals, 15 — in one FIR and seven in the second — and "unknown officials" of Paytm have been booked by the CBI on Paytm's complaint. Suspecting involvement of its employees in the fraud, Paytm's complaint, given to the CBI, reads "the fraudulent refunds happened through the use/illegal use of user ids and password of employees of company entrusted for this task. Hence, either the employees themselves or some person associated with them or some unknown people have fraudulently refunded the order amount with common intentions to wrongfully gain along with such involved customers". The complaint further reads the accomplices "approved/made fraudulent refunds against the same orders, the delivery of which were successfully taken by them or their accomplices".

: Times of India

http://timesofindia.indiatimes.com/business/india-business/cbi-probes-paytm-employees-role-in-rs-10-lakh-worth-fraud-cases/articleshow/56177846.cms#

5. CBI probes Paytm employees role in Rs 10 lakh worth fraud cases



Individual

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

: NA

: Online Banking

: Cheating

:Fraudsters started to use people's panic and confusion over demonetization to their advantage. The fraudster demanded ATM card number and OTP generated to destine his purpose.

: The first case of cheating a Jan Dhan bank account holder after the announcement of demonetization was registered at Odhav police station. The victim Sunil Vaghela received call from fraudster asking ATM card data and OTP. However victim received SMS for transfer of money from his account amounted to RS. 44000/-. Police sources said they have sought the account number to which the amount had been transferred. "We have also informed the cyber cell of the city crime branch about the incident," said a police official. Cyber cell officials said they suspected a rise in online cheating cases, and hence have already created a database of about 3,000, cellphone numbers of such callers who target bank customers. The cellphone numbers are mostly registered in Chhattisgarh, West Bengal and Bihar.

: Times of India

http://timesofindia.indiatimes.com/city/ahmedabad/Fraud-caller-steals-Rs-44k-from-Jan-Dhan-account/articleshow/56073027.cms

6. Fraud caller steals Rs 44,000 from Jan Dhan account

Company

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

:Kingfisher Airlines

: Banking

: Violation of banking fraud

: The Kingfisher brand Vijay Mallya attempted loan default. This is the case of violating banking norms in sanction and disbursement of credit limit of Rs. 900 Cr approx..

: The CBI is conducting raids on liquor baron Vijay Mallya and his defunct Kingfisher Airlines in connection with alleged loan default of Rs 900 crore.The agency is investigating a loan default worth Rs 900 crore sanctioned by IDBI Bank to Mallya's company despite the airline's negative credit ratings and net worth.The raids are being conducted in five locations – three in Mumbai, one in Bangalore and one in Goa – in the office and residential complex of Mallya, CBI sources said. "A case has been registered against Vijay Mallya, director of Kingfisher Airlines, A Raghunathan chief financial officer of said firm and other unknown officials of IDBI Bank for allegedly violating banking norms in sanction and disbursement of credit limits of Rs 900 approximately," said a CBI spokesperson.The CBI had registered a preliminary inquiry against IDBI Bank and Kingfisher Airlines in August. “It was the first exposure to the bank. There was no need for the bank to take the exposure outside the consortium when already other banks loans were getting stressed,” the CBI had alleged while initiating the probe last year. During the preliminary inquiry, the agency examined officials of IDBI Bank seeking answers on sanctioning the loan to the airline, ignoring its own internal report which had warned against such a move.

The debt-ridden Kingfisher Airlines, which had stopped operations in October 2012, owed Rs 7,500 crore to a consortium of banks led by State Bank of India.

The CBI has been looking into rising non-performing assets (NPAs) of public sector banks and has registered dozens of cases against defaulting companies in the past.

: Business Standards

http://www.business-standard.com/article/companies/vijay-mallya-faces-cbi-heat-over-loan-fraud-115101000514_1.html

7. Vijay Mallya faces CBI heat over loan frauds



Individual

Nature

Modus

Quantum & Impact

Source

Web Link:

: Senior Manager of Public Sector Bank

: Demonetized Note Fraud

: The culprits raised DD using demonetised currency to convert black money into white. The purpose was to convert black money by cancelling DD into valid bills

: Two more people, including a senior manager of a public sector bank, have been booked by the Central Bureau of Investigation (CBI) for fraudulently exchanging demonetised currency in Bengaluru on Tuesday, CBI sources aid. The CBI booked a case against a senior manager of Central Bank of India's Basavanagudi branch, Lakshminarayana, and two directors of a Pune-based private firm, a CBI source said. Lakshminarayana allegedly issued 149 demand drafts for amounts less than Rs 50,000 in favour of a Pune-based finance company in violation of RBI guidelines, the source said. The bank manager Rs 71lakh in demonetised notes and issued DDs for less than Rs 50,000 to convert the notes. The firm's owners subsequently cancelled the drafts, thereby converting old notes into valid bills, the CBI alleged. CBI continued its searches at various places across Bengaluru, including the residences of bank officials and individuals. Documents, including bank vouchers, counterfoils, DDs, property documents, hard disks and Rs 6 lakh worth demonetized notes were recovered.

: Times of India

http://timesofindia.indiatimes.com/city/bengaluru/CBI-arrests-2-more-for-demonetized-note-fraud/articleshow/55845430.cms

1.CBI arrests 2 more for demonetized note fraud



Company

Nature

Modus

Quantum & Impact

Source

Web Link:

: NA

: Debit & credit card data stealing, OTP Frauds

: The scamsters obtain details of the customer's account through various sources, including the bank staff. He then calls the victim posing as a bank employee, and asks for the card or account details including the OTP. The fraudster then uses the password to transfer money to his account. The money is then transferred to online money wallets like Paytm, MobiKwik, Oxigen Wallet and PayUMoney.

:: "Following demonetisation the investigators are getting at least four cases of credit or debit card theft every week. Apart from these cases, they are also getting One-Time Password (OTP) frauds as well. Airing similar concerns, even experts from cyber security companies like Kaspersky Labs note that there has been a spurt in various programs and games, which have a modified virus strain or Trojan aimed at stealing credentials from more than 2,000 Android financial applications. Aptly dubbed the Faketoken, there have been over 16,000 victims from 27 countries, including India. The warning comes after ASSOCHAM, in a report in October this year, said the number of mobile frauds is expected to grow by 65 % by 2017. Credit and debit card fraud cases have topped the charts of cyber-crime. The body observed that the data-encryption capability is unusual in most mobile ransom ware, as it focuses on blocking the device rather than the data, backed-up to the cloud. During the initial infection process, the Trojan demands administrator rights, permission to overlay other apps or to be a default SMS application - often leaving users with little or no choice but to comply. Among other things, these rights enable Faketoken to steal data, both directly, by contacts and files, and indirectly through phishing pages.

: Times of India

http://timesofindia.indiatimes.com/city/hyderabad/Cyber-crime-cases-shoot-up-post-demonetisation/articleshow/56129277.cms

2. Cyber-crime cases shoot up post demonetisation

FRAUDS IDENTIFIED DUE TO DEMONETISATION

Individual

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

: Engineers working in State Government

: Banking

: Fraudulent conversion of Demonetised currency.

: The currency in new denominations was saturated to a place in Bengaluru in bulk along with gold biscuits creating stringency in smooth distribution and conversion of old currency into new.

: In the biggest seizure of cash in new currency post demonetisation, the Income Tax department on Thursday confiscated over Rs 4.7 crore during searches in a dozen premises in Bengaluru and other locations. Officials said the searches were launched on the premises of two engineers, working with the state government, and some "connected persons". "During the course of searches Rs 4.7 crore cash in new denominations of Rs 2000 and 0.3 crore in old/smaller denominations totalling Rs 5 crore and 7 kg bullion worth approximately Rs 2 crore were found in a flat owned by a civil contractor. The sleuths also seized some notes of Rs 100, demonetised notes of Rs 500 and a few gold biscuits during the operation. The department has also found a number of identity cards of various individuals from the searched premises which could have been used to illegally change the old currency with new ones. Taxman has also seized documents of property purchase from the premises, even as they found a battery of luxury cars parked in these locations. Only yesterday, the Enforcement Directorate (ED) had seized Rs 10 lakh cash in new notes of Rs 2000 from the premises of a Kolkata-based doctor. The agency conducted nationwide search operations at 40 locations and seized about Rs 1 crore in new notes.

: Times of India

http://timesofindia.indiatimes.com/city/bengaluru/Over-Rs-4-crore-in-new-notes-seized-in-IT-raids-in Bengaluru/articleshow/55728247.cms?utm_source=TOInewHP_TILwidget&utm_medium=ABtest&utm_campaign=TOInewHP

3. New notes worth Rs 4.7 crore seized in I-T raids in Bengaluru



4. Hyderabad businessman held for Rs 98 crore 'black money' deposits in banks

Group of individuals

Nature

Modus, Quantum & Impact

Source

Web Link:

: Kailash Chand Gupta, Naredi Narender Kumar

: Black Money deposit

: The businessman was arrested for allegedly cheating and generating 'fake and fictitious' advance payment receipts to deposit "black money" to the tune of Rs 98 crore in banks following demonetisation. Besides Kailash Chand Gupta (65), his kin and others have also been booked by the police under various sections of IPC for their alleged role in the "conspiracy". Another businessman Naredi Narender Kumar (59), MD of a private firm and brother-in-law of Gupta, was also arrested for abetment and hiding Gupta from police. After demonetisation, Gupta, along with his sons Nitin and Nikhil, daughter-in-law Neha and others, conspired and hatched a plan to convert their black money by depositing it with banks by generating fake and fabricated receipts for wrongful gains which caused loss to government of India, stated a release from Hyderabad Police. Accordingly, the accused people generated fake and fictitious advance payment receipts, purported to be acquired from about 3100 customers, for an amount of Rs 57.85 crore in name of their firm Musaddilal Gems and Jewellers Private Ltd. They also allegedly produced fictitious advance payment receipts for Rs 40 crore in name of another firm, Vaishnavi Bullion Private Ltd, claimed to be acquired from about 2100 customers, and issued computerised receipts for the same, police said.

: Indian Express

http://indianexpress.com/article/india/hyderabad-businessman-held-over-rs-98-crore-black-money-deposits-in-banks-4449928/



5. Lost in transit: ATM refill frauds jump four-fold since demonetisation

Nature of Fraud

Modus

Quantum & Impact

Source

W e b L i n k :

: False Bank Guarantees

: It appears to be a case of false bank guarantees to get dealership for selling Tractors. It is observed that false guarantees are given by the agency (partnership business).

: Reported fraud during ATM refills has jumped four-fold to Rs 8.34 crore since demonetisation, exposing cracks in the largely disorganised cash-in-transit industry. According to experts, the monthly loss on an average before demonetisation used to be Rs 1-2 crore. The CBI is investigating a case in Bengaluru where an attempt was made to convert Rs 5.63 crore "black money" into white using ATM refill agencies. This follows a string of other frauds, like a fortnight ago when an ATM cash van made off with about Rs 1 crore in Bengaluru. Employees stole Rs 74 lakh in cash meant for ATMs in Visakhapatnam. This month is also bound to see an increase in those numbers because of mass movement of currency with lesser scrutiny post-demonetisation, experts said. "Over the last two years, the rate of internal fraud and cash lost has doubled with about 3-5 major incidents being reported every month," said Rituraj Sinha, president, Cash Logistics Association (CLA), which handles over 93% of the ATM cash logistics in India. Despite the industry handling 10 times the volumes it managed before demonetisation, over 9,000 cash vans in the country continue to ply with crores of rupees in cash without armed guards, GPS trackers or any background verification.

: Economic Times

h t t p : / / e c o n o m i c t i m e s . i n d i a t i m e s . c o m / n e w s / p o l i t i c s - a n d -nation/dayashankar-singh-brother-booked-for-fraud/articleshow/54461578.cms

6. At Axis Bank Noida Branch, 20 Fake Accounts Found With Over 60 Crore Deposits Since Notes Ban

Company

Nature

Modus

Quantum & Impact

Source

Web Link:

: Axis Bank

: Fake Accounts opened to deposit black money.

: Fake accounts are opened in this era of demonetisation using forged documents to deposit black money (demonetised currency).

: In raids at an Axis bank branch today, tax officials found fake accounts where over 60 crores had been deposited since the notes ban was announced last month. 20 fake company accounts were found in the branch in Noida. Sources say directors named in these accounts were found to be labourers. Earlier, taxmen found 44 fake accounts at a branch of Axis Bank in Chandni Chowk, a busy commercial area in the old quarters of Delhi. Around 100 crores in old notes had been deposited in these accounts since November 8, when Prime Minister Narendra Modi banned 500 and 1000 rupee notes to check tax evasion. The fake accounts, said officials, were created using forged documents. The money may have been routed to buy gold, suspect investigators. Last month, the Delhi Police had caught two people with 3.5 crore in new currency as they came out of the Kashmiri Gate branch of the bank, also in central Delhi.

: NDTV News

http://www.ndtv.com/india-news/73-state-bank-of-india-cardholders-report-fraud-withdrawals-1628876

Individual

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

: Radheshyam Mosoon, Nirmal Khandelwal

: Real Estate

: Forgery and wrongful acquisition of property

: This seems to be the case of allegedly acquiring property. His deliberate intension was to target people who have properties in Jaipur but are living in other cities.

: Ramganj police, arrested a city-based jeweller for allegedly acquiring property of an elderly man, based on forged documents and counterfeit deeds. Radheshyam Mosoon was arrested for acquiring the property of retired chief engineer of Bikaner-PHED Daljeet Singh with the help of his aide Nirmal Khandelwal, who has already been arrested. JDA had allotted a plot to Daljeet Singh at Gopalpura area in 2001. Subsequently, Singh made one Vinod Kumar, power-of-attorney to the property in 2003. "In 2014, Khandelwal impersonated himself as one Gurmeet Singh and fraudulently acquired the property through forged documents," Chauhan said. Khandelwal alias Gurmeet Singh later transferred the property rights of the plot to Radheshyam. "After a month, they fraudulently acquired the property and Radheshyam found a buyer to sell it for Rs 2.5 crore," Chauhan said. Cops said that Nirmal Khandelwal was running a racket with the help of three others. The trio is currently on the run. Nirmal would wear a turban and put-up beard to look like a Sardar. Impersonating as Gurmeet Singh, he would forge documents and lay claim on properties," Chauhan said. Police said that Gurmeet Singh also duped people in the past and have cases registered against him in Murlipura and Banipark police station in Jaipur.

: Times of India

http://timesofindia.indiatimes.com/city/jaipur/Jeweller-held-for-property-fraud/articleshow/56109957.cms#

1.Jeweller held for property fraud



Individual

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

: John Jacob and Dhanya Mary Varghese

: Real Estate

: Cheating

: In this case the celebrity couple duped clients who paid for apartments and Villas. Also they have duped investors of Rs. 30 Cr after promising them high returns with attractive interest rates.

:Celebrity couple John Jacob and Dhanya Mary Varghese were arrested in connection with a real estate fraud case. The police also arrested John's younger brother Samuel Jacob. The three were wanted in connection with a case for allegedly cheating investors in the name of various projects under the Samson and Sons Builders and Developers Private Limited. One allegation is that they duped clients who paid for apartments and villas in the company's ongoing projects in various parts of the city. The net worth of the fraud committed in this way, as per the complaints received so far, is nearly Rs 100 crores. The other allegation the accused are facing is of duping investors of Rs 30 crore after promising them high returns with attractive interest rates. The police have booked them under relevant sections of cheating and criminal breach of trust. They were produced before the court and were remanded in judicial custody.

: Times of India

http://timesofindia.indiatimes.com/city/thiruvananthapuram/celebrity-couple-relative-held-for-real-estate-fraud/articleshow/56032818.cms

2.Celebrity couple, relative held for real estate fraud

GENERAL CASES

Individual

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

: Ajit Kumar Singh Kasliwal

: Real Estate

: Cheating, Fraud, Criminal conspiracy and illegal transfer of land.

: This case is appears to be the case of criminal conspiracy and illegal transfer of Government land.

: Businessman Ajit Kumar Singh Kasliwal, who is the brother-in-law of leading Bollywood producer Kamal Kumar Barjatya, has been charged with multiple offences, including cheating, fraud and criminal conspiracy in relation to an alleged illegal transfer of government land worth Rs 4,000 crore in the heart of South Mumbai. Three other members of the Indore-based Kasliwal family have also been charged with these offences. The land in question is a 2.03 lakh sqft prime plot situated in Mazgaon. It was on October 3 when the Collector complained to police, accusing the Kasliwal family of “being part of a criminal conspiracy” for the “illegal transfer of a government land”. Joshi claimed the plot in question belonged to the Maharashtra government, which had been allotted on lease since September 1, 1903. Contending that the lease tenure had expired on August 31, 2002, and that the government hadn't yet renewed the lease, her office has objected to a Deed of Assignment executed by the Kasliwals, who are the lease holders of the plot, and one Huda Builders and Developers Pvt. Ltd. on August 4, 2014, where the plot's lease rights were assigned to the construction firm. “The assignment was done without prior permission from the Collector's office and at a time when the lease tenure had already expired. It is an unauthorized deed,” said Joshi. Accusing the Kasliwals and the building firm's partners Fahad Khan and Junaid Khan — also made co-accused by the police — of “executing a fraudulent deed”, the Collector's office has further levelled the accusation that the entire episode was a “criminal conspiracy” hatched for undue monetary gains. The deed executed between the Kasliwals and the building firm shows the latter paid Rs 4 crore for the transfer of lease rights. Besides, the firm has reportedly agreed to provide the Kasliwals about 40,000 sqft in built-up space.

: Indian Express

http://indianexpress.com/article/cities/mumbai/top-businessman-charged-with-fraud-in-mumbai-land-case-4386642/#

3.Top businessman charged with fraud in Mumbai land case.





4. RBI Says Forensic Auditor Investigating Debit Card Data Breach

Company

Sector

Nature

Modus

Quantum & Impact

Source

Web Link:

: NA

: Information Technology

: Adverse fall out of Debit Card data

: The Debit card data is hacked. Around 32 lakh Debit cards are infected from this fraud, due to which 19 banks are duped for 1.3 Cr.

: In the wake of the biggest-ever debit card data breach affecting the Indian banking system, the Reserve Bank of India on Monday said a forensic auditor is investigating the matter, even as it tried to allay fears saying the number of cards misused is "few". The central bank held a meeting with senior officials from select banks, the National Payment Corporation of India (NPCI) and card network operators to review the steps taken by various agencies to contain the adverse fall-out of certain card details alleged to have been compromised. The RBI said it came to its notice on September 8 that details of certain cards issued by some banks had been possibly compromised at ATMs linked to the ATM Switch of one of the service providers. The central bank said in statement that, as a matter of abundant precaution, card network operators concerned were earlier advised to share the details of cards used during the period of such exposure, it said. Several public and private sector banks have recalled or blocked over 32 lakh debit cards to safeguard their customers from any financial fraud. The Finance Ministry has asked various agencies, including the RBI to submit their report in 10 days. The RBI said that banks have taken measures including advising the customers to change PIN, blocking payments at international locations, reducing the withdrawal limits, monitoring unusual patterns, replacing the cards and re-crediting the accounts of cardholders for amounts wrongly debited. As many as 32.14 lakh debit cards of various public and private sector banks are feared to have been 'compromised' by cyber malware attack in some ATM systems. Fraudulent withdrawals have been reported from 19 banks so far while complaints have been received from a few banks that their customers' cards were used fraudulently abroad, mainly in China and the US while the customers were in India. According to the NPCI, as many as 641 customers across 19 banks have been duped of Rs. 1.3 crore using stolen debit card data.

: NDTV News

http://profit.ndtv.com/news/your-money/article-rbi-says-forensic-auditor-investigating-debit-card-data-breach-1478468

Our 1st Edition on Red Flag Indicators Report - Period Apr - Jun 2016



Red Flag Report - 1st Edition.pdf

Our 2nd Edition on Red Flag Indicators Report - Period July - Sept 2016



17

Red Flag Reporting - 2nd Edition.pdf

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