SSA Todd Adams and SA Tonja Sablatura

Little Rock FBISARs and Fraud

LEARNING OBJECTIVES

1. Discuss WHO has to write SARs, WHEN should we write them, WHY write SARs, and WHAT you can do to help LE when writing SARs.

2. WHO are the victims and WHAT YOU should know about them.

3. SCAMS and FRAUDS YOU should be aware of.

WHO ARE REQUIRED TO FILE SARs?

• Many different types of finance-related institutions are required to file SARS:• Stock/mutual fund brokers• Check cashing and currency exchange bureaus• Casinos and card clubs• Dealers in precious metals and gems• Insurance companies• Car dealerships• Mortgage companies• Plus more…

Suspicious Activity Reports (SARS)

• WHAT QUALIFIES AS SUSPICIOUS?

• PLEASE KEEP DOING THEM!

• NOTHING IS SILLY• Money smells weird• Person does not want to fill out CTR paperwork and then decides

to structure afterwards• Out of country wires by someone without identification• Activity in account inconsistent with individual’s employment or

business purpose for account

WRITING SARs

• When writing SARs:• Fill out the whole form (i.e. if name only completed then

very difficult for us to do much with it…)

• Bottom Line Up Front (BLUF) – Brief statement of what the SAR is all about.

• In the body – describe what it is, facts, dates, amounts, and what we are dealing with…as organized as possible.

• Contact information in case we have additional questions

YOU ARE HELPING LAW ENFORCEMENT

• When writing a SAR, remember you are helping LE identify individuals, groups, and organizations involved in criminal activities:• Mass Marketing and Internet Fraud (too many to list…right?)

• Ransomware, CEO Takeover, Publishers Clearinghouse, Facebook…• Terrorist Financing• Money Laundering• Insider trading and securities fraud• Tax evasion• Counterfeiting

• SARs also help LE identify emerging trends and patterns associated with financial crimes.

Who are the Victims of Fraud?

EVERYONEPerpetrators are Masters of Social Engineering – well practiced in the art of Persuasion and Manipulation

Continually emphasize reward

Emphasize scarcity, urgency, and uniqueness

Continually increase monetary commitment

Develop relationship with victims

Not afraid to threaten or frighten the victim

Actual Number of Victims

KNOWN VICTIMS

UNKNOWN VICTIMS

Why Victims Don’t Report:Shame and Embarrassment

Perception that law enforcement won’t believe them or act on crime

Fear that family will assume control of finances, loss of independence

Suffer from cognitive impairments

Devastating Impact

…On Individual Victims: •Depression, withdrawal and isolation from family and friends

•Deterioration of physical and mental health

•Loss of life savings, home, job, independence

•Suicidal thoughts and actions….even physical harm from perpetrators

Devastating Impact

• On Family Members:

Loss of money and assets on which he/she may have been financially dependent

Must cope with family member’s loss, grief, financial dependence

Sense of anger and helplessness

• On Legitimate Businesses and Industries:

Change in purchasing and payment behavior, consumer suspicions of legitimate direct marketing promotions leads to losses in revenue

Exploits, undermines legitimate business processes

• On National Reputations of “Host” Countries: Adverse impact on image and reputation of countries and their citizens Discourages trade, investment, and tourism

Eluding Law Enforcement

UNCLASSIFIED//LAW ENFORCEMENT SENSITIVE

Use of “Pitch” Names and False Identification

Multiple Scams, Multiple Groups, Multiple Countries

Untraceable Communications

Use of Facilitators and Runners

Cash-Based Money Transfers

Sophisticated Money Laundering Techniques

Business Email Compromise (BEC)

• Hacked accounts via spear phishing

• Spoofed accounts mimicking the real account until one reviews the extended header or hovers over the address

• Spoofed accounts with slight domain variations• transportllc@adc.com vs. transportllc@abc.com

• Spoofed accounts made similar to legitimate accounts • transportllc@abc.com vs. transportsllc@abc.com

Common Variations of BEC?

What do you do if you are a victim of BEC?• Request your financial institution to issue a “SWIFT recall”• File a SAR• For domestic institutions – request your financial institution

to send a “hold harmless” letter to the beneficiary bank

After three days the funds often-times transferred out of the beneficiary account. However, this is not always the case, and the FBI may still be able to pursue a criminal prosecution.

What do you do?

Funds wired within the last three days:• >$50,000 - Immediately report to FBI Little Rock• <$50,000 – Report to FBI via Internet Crimes Complaint Center (IC3) at

www.ic3.gov• Also consider notifying local law enforcement

Funds wired more than three days ago:• >$50,000 - Immediately report to FBI Little Rock & www.ic3.gov• <$50,000 – Report to www.ic3.gov

• Also consider notifying local law enforcement

What do you do?

IRS SCAM COSTS TAXPAYERS $15MM

What is Mass Marketing Fraud

• Mass Marketing Fraud exploits mass media communication, such as telemarketing fraud, internet fraud, and identity theft.

• Millions of victims every year and losses in the hundreds of millions.

Common Mass Marketing Frauds

LOTTERY/SWEEPSTAKES

Victims are told that they have won a lottery or sweepstakes in a foreign drawing. To collect the winnings, victims are told they must first pay various taxes and fees.

INVESTMENT FRAUD

Perpetrators deceive victims with promises of high returns in exchange for devoting

investment funds to the purchase of securities, real estate, stakes in oil drilling ventures, coins,

gems, and other commodities

Zibiah and Paul Gunter, arrested for role in scamming

15,000 UK victims of £35 million in Investment Scam

Common Schemes

• Fake Invoice Scams

• Nigerian Letter Scams

• Advance Fee Scams

• Overpayment Scams

• CEO Takeover Scheme

Other “Hot” MMF Scams

Dating / Romance

Scams

Charity Fraud

Counterfeit Check Schemes Targeting Attorneys and Businesses

Emergency Scams

MMF Scams Exploit Financial Crisis

Mortgage-Related Scams

Foreclosure Rescue Scams

Loan Modification Scams

Loan Forgiveness Scams

Debt Elimination Scams

Scams Exploit Financial Crisis

Debt Collection

Fraudulent Credit Card Offers

Fraudulent Loan and Grant Scams

Credit Counseling Scams FRAUDSTER

Scams Exploit Financial Crisis

Work-at-HomeMystery ShopperFranchise Scams

Multi-Level Marketing PlansFinancial Agent / Reshipper

EMPLOYMENT SCAMS

WHAT ARE YOUR QUESTIONS?

Thank You!