Modus Operandi Mauro Corvasce (best authors to read TXT) 📖

Another fraud where the telephone and credit card are involved is telephone sex. Telephone sex operations are different from 900 numbers. The 900 numbers are typically billed by the telephone company. We're talking about a long-distance number you can call, and the first thing they want is a credit card number before they'll talk to you about anything you want to talk about. It's a booming business in different parts of the country. We get a lot of claims of fraud on the credit card. Typically the person talks two or three hours and then receives a bill with a charge of over $200. The customer will dispute the bill. A lot of the fraud comes when children get Mom and Dad's credit card number and call these services. There are also group sex calls, where people from different parts of the country, using their credit cards, can call and talk about whatever they want.

A new scheme that has popped up involves a disgruntled computer programmer who designs a program which dials into a credit card center. The computer will run a program designed to discover valid credit card numbers. The program inputs a series of credit card numbers that are submitted to the authorization center for a one dollar authorization. The center authorizes only the valid numbers. The programmer can take valid numbers and use them for other things, like ordering from catalogs.

Since mail order frauds can involve multiple states, government agencies have become involved in the investigations, including the Secret Service, the U.S. Attorney General's Office, and the Postal Inspections Service.

Money Laundering

Basically, money laundering is the conversion of money from a cash transaction system to a business transaction system. Money laundering involves hiding the paper trail that connects income to a person so he can evade the payment of taxes, avoid prosecution for federal, state or local offenses, and prevent any forfeiture of illegally derived income or assets.

It is estimated that $110 billion is laundered annually in the United States. This figure increases to $300 billion worldwide, which makes money laundering one of the most profitable businesses in the world. Intelligence sources indicate that a successful money laundering operation can launder an estimated $100 million or more annually.

It is clear that money laundering continues to pose a significant financial threat to the United States, particularly the New York City metropolitan area. New York City faces money laundering at all three stages of the process: placement, layering and integration.

Placement Where drug money is directly used to found an operation, such as a legitimate business.

Layering Where drug money is held or stockpiled while it is waiting to be integrated.

Integration Where illegal drug money is mingled with legitimate money, such as in a restaurant, gas station or con-veneince store.

The nature of the New York City metropolitan area offers unlimited opportunities for money laundering. New York is one of the world's largest seaports, the financial capital of the United States, contains two leading international airports, diverse ethnic populations and a high demand for illegal narcotics. The location of New York as a major international gateway together with a highly diverse international population make the city an especially attractive venue for money laundering.

New York City is the headquarters for six of the world's largest financial institutions (three of which are the influential securities markets), the five largest and most important commodities and futures exchanges, and eleven clearinghouse banks. As an important financial center, New York is in the center of enormous daily movements of money through wire transfers. Industry estimates indicate that between $900 billion and $1 trillion is moved daily through the New York City wire transfer systems. Those systems are believed to be a significant avenue for money launderers to move their illicit source monies; moreover, wire transfers have been increasingly used by money transmittal houses. A study conducted by United States Customs Service and New York Regional Intelligence Division pertaining to wire transfers concludes that wire transfers will continue to be a dominant means for money laundering and fraud.

Narcotics trafficking continues to thrive in the New York area. Statistics indicate that the New York City metropolitan area is an extremely large consumer market for all types of drugs. It is estimated that 50 percent of all heroin users and 16.6 percent of all cocaine abusers are located here. The ethnic diversity of New York City and the access to international transportation provide smuggling organizations with a hub for their smuggling and distribution of narcotics. With those activities comes the need to launder illicitly obtained proceeds.

Additional sources of information that may indicate potential money laundering trends or activity are the criminal referral reports (CRR) and suspicious transaction reports (STR). Bank officials file these forms with the government when, in their judgment, an unusual or suspicious transaction has taken place. A review of CRRs for the New York area over the past months has revealed that money laundering exists here.

The most common trend identified is structuring. Structuring is the act of making frequent multiple cash deposits, under $10,000, at one or more financial institutions with the intent to avoid the STR reporting requirements. Another red flag is when companies make deposits and/or withdrawals of unusually high sums of money not commensurate with their usual earnings or deposit and withdrawal patterns. Suspect wire transfer activity, primarily to overseas locations, has also been reported. It is not uncommon, especially in the inner cities, to find concentrations of specific nationalities or ethnic groups in particular neighborhoods or communities with ties to countries that export drugs.

Key Industries in Money Laundering Schemes

There are several industries that are particularly vulnerable to being used for money laundering activity. These tend to be cash intensive businesses that disguise large sums of illicit cash by mingling it with legitimate business proceeds. Bulk cash represents a problem for many criminals, especially drug dealers. Financial institutions used include banks, money transmitters and securities markets. The commercial business being used for money laundering includes the precious metals industry, travel