News

Tax fraudster used false passport

A tax fraudster has been jailed for a self-assessment scam.

Dmytro Shepel invented 350 identities to perpetrate his fraud A Ukrainian man who defrauded the tax authorities of £560,000 has been sent to jail for three-and-a-half years.

Dmytro Shepel, a 25-year-old illegal immigrant, obtained the money by setting up 350 false identities on the tax self-assessment system.

He used 218 of them to make bogus tax reclaims and tried to steal £646,000.

Shepel was convicted at Woolwich Crown Court and will be deported at the end of his term in jail.

He had carried out his fraud while working under a false identity as a Lithuanian.

Using a false passport he opened 74 bank accounts in the space of two years to receive the fraudulent tax rebates.

To read the story please go to http://www.bbc.co.uk/news/business-10878799.

FSA imposes fine for inadequate AML controls

The Financial Services Authority (FSA) has imposed a financial penalty of £140,000 on Alpari (UK) Ltd (Alpari), an online provider of foreign exchange services for speculative trading, for failing to have in place adequate anti-money laundering systems and controls. Its former money laundering reporting officer (MLRO), Sudipto Chattopadhyay, has also received a financial penalty of £14,000.

FSA regulated firms should carry out risk assessments of the money laundering and financial crime risks that they are exposed to. However, between September 2006 and November 2008, Alpari failed to carry out thorough assessments and, as a result, put the firm at risk of being used to further financial crime.

Alpari failed to carry out satisfactory customer due diligence procedures at the account opening stage and failed to monitor accounts adequately. These failings were particularly serious as Alpari's customer base included those from higher risk jurisdictions, such as Nigeria, and its customer relationships did not operate on a face to face basis.

Alpari also failed to have in place adequate systems for screening customers against UK and global sanctions lists and for determining whether customers were politically exposed persons (PEPs).

VERIPHY LAUNCH COMPANY REPORT SERVICE

We have some exciting news - we now offer access to a range of company reports so that everyone using Veriphy can benefit from products such as company credit checks, in-depth financial reports and lists of directors at the keenest prices available.

As ever, there is no access charge, no minimum use and no sign-up fee for this service - you only ever pay for the reports you download.

These reports are available through the standard login for anti-money laundering and credit checks.   Full details of the new reports and their competitive prices are here. 

ID fraud set to rocket

Identity fraud is likely to grow rapidly this year as organised criminals target the wealthy, says a new report.

Around 72% of ID fraud in 2009 came in the second half of the year. Company directors and business owners were most at risk.

Report authors Experian calculate that the number of identity fraud victims rose by 20% in 2009 compared with the previous year.

London was the UK's crime capital but Salford, Manchester and Cardiff were also reckoned to be especially vulnerable.

The full story can be found at http://news.bbc.co.uk/1/hi/business/8575936.stm.

A failure to check leads to broker being banned

The FSA has reported that it has banned Walthamstow-based mortgage broker Kevin Byrne for "lacking the integrity and competence" to prevent his business being targeted by mortgage fraudsters.

An investigation by the FSA revealed Byrne accepted mortgage referrals from an introducer but failed to undertake due diligence or any basic checks on client information supplied by the introducer.  As a result, he submitted seven mortgage applications containing false and misleading information; in fact at least one of the customers did not exist.

Byrne was also found to have certified a number of supporting documents, despite never having seen the originals.  As a result, mortgage applications were submitted using erroneous information, such as:

• A bank statement for one applicant that contained differing sort codes and account numbers on different pages;
• Two applications made using false passports; and
• Payslips supposedly from different employers yet using identical formatting.

When questioned by the FSA, Byrne confessed that no checks were in place at Forest Financial to help reduce the risk of his business being used to commit mortgage fraud.

Margaret Cole, director of enforcement and financial crime at the FSA, said:

"Byrne acted recklessly by accepting business from introducers without undertaking any due diligence. This made him an easy target for the introducer to obtain mortgage advances from lenders on a fraudulent basis, which could have been prevented if Forest Financial had put in place basic financial crime checks.

"Byrne is paying a heavy but necessary price. This prohibition serves as another warning to mortgage brokers who accept business from introducers in suspicious circumstances without doing the proper checks."

With Byrne now prohibited and Forest Financial without sufficient resources to operate, the FSA has cancelled the permission of the firm.

Byrne was the only adviser at Forest Financial, which was authorised by the FSA to arrange mortgage contracts on behalf of consumers.

Source: FSA http://www.fsa.gov.uk/pages/Library/Communication/PR/2010/027.shtml

Estate Agent OFT Registration

Suspected terrorist given 100% mortgage

www.mortgagestrategy.co.uk reports that NatWest has been criticised for offering a suspected terrorist a 100% mortgage.

Albanian Krenar Lusha, 30, was apparently given £93,000 after NatWest failed to complete full checks on his UK status.

He used the cash to buy a property in Derby, where he stored bomb-making equipment and information on how to carry out attacks.

The illegal immigrant also managed to get a UK driving licence, secure a £30,000-a-year engineering job and was even offered a second mortgage - which he declined.

Lusha opened a NatWest bank account in 2000, soon after he sneaked into Britain on the back of a lorry.

Reports in today's Daily Mail newspaper say when bank staff were asked about its dealings with Lusha, one mortgage advisor told Preston Crown Court: ‘He was just a pleasant natured person and there was nothing untoward.'

Lusha has been jailed for seven years after he was convicted of five out of 10 terror charges following a three-week trial.

Maintenance Saturday 24th October

Veriphy would like to inform its clients of essential maintenance being undertaken on Saturday 24th October between 08:00 - 20:00 BST
During this time our ID/ML and other checks will be available, but will not check against the sanctions lists.
If you have any queries on this matter please do not hesitate to get in touch.

OFT to Launch AML Register for Estate Agents

An annual fee will be payable thereafter.

FSA announces plans to increase fines

The Financial Services Authority (FSA) has announced plans to adopt a new framework for the calculation of penalties which could result in the trebling of some fines.

The announcement, which may be found here, states:

"The new plans reflect the FSA's determination to change behaviour and address concerns that firms are repeatedly failing to improve standards (e.g. in relation to mis-selling to consumers and market misconduct). They will also ensure that fines better reflect the scale of the wrongdoing and that any profits made from the breaches are clawed back.

Under the new proposals, fines will be linked more closely to income and be based on:

• Up to 20% of the company's income from the product or business area linked to the breach over the relevant period;
• Up to 40% of an individual's salary and benefits (including bonuses) from their job relating to the breach in non-market abuse cases;
• A minimum starting point of £100,000 for individuals in market abuse cases. 

The total fine imposed will also take into account other factors, such as the desired deterrent effect and any settlement discount. 

Margaret Cole, director of enforcement at the FSA, said:

"These proposals are an important step in pushing forward our ethos of credible deterrence. By hitting companies and individuals in the pocket where it hurts, the fines will be a stark warning to others on what they can expect to pay for flouting our rules. Moving to this new framework will enable our enforcement policy to continue making a real difference to consumers and to changing behaviour in the financial services sector."

Rise in loans for UK house purchases

The number of loans handed out for house purchases in the UK rose by 16% in April compared with the previous month, according to lenders.

April saw a rise of 16% in UK home purchase loans compared with March, says the Council of Mortgage Lenders, though the figure is 28% down on April 2008.

The full story is at: http://news.bbc.co.uk/1/hi/business/8094698.stm

Ban and Fine for Dorset Mortgage Brokers

The Financial Services Authority (FSA) has banned mortgage brokers Peter and James Dean of Dorset-based UK Finance House Limited (UKFH) for their failure to prevent their firm from being used to perpetrate financial crime and for other serious regulatory failures. Peter Dean has also been hit with a fine of £17,500.

Head of retail enforcement at the FSA, Georgina Philippou, said:

"The actions of Peter and James Dean posed a serious risk to lenders and consumers. As part of our crackdown on financial crime in the mortgage market we have banned a number of mortgage brokers and others in the last year and we will continue to make examples of people, including by bans and fines, who either commit mortgage fraud or fail to prevent their firm from being used to further financial crime."

For the full story click here.

New Landlords Warned of Regulatory Minefield

Increasing numbers of homeowners are opting to let out their property while they wait for the upturn. These new landlords are giving a much needed boost to housing supply at a time of high demand for rented accommodation.

Many, however, of these landlords may be unaware of the huge number of regulations involved in letting property. Paragon Mortgages' managing director John Heron has warned that that there are more than 50 Acts of Parliament and 70 sets of regulations governing the private rented sector. Landlords risk hefty fines if they let out property without complying with all the necessary legislation.

For the full story click here.

EASY ACCESS TO VERIPHY SERVICES

We have updated our user interface to allow easy access to all our current range of on-line checks.

When you log in you will now see this screen:

Please contact support@veriphy.co.uk for further information on any of these services.

FSA imposes fines at record levels

The FSA imposed fines of £22m in 2008, marking a move towards a stricter approach to enforcement.

You can read the full story at: http://news.bbc.co.uk/1/hi/business/7798872.stm

The Identity Verification Answer for Debt Management Companies

FSA fines firm over anti-money laundering inadequacies

The Financial Services Authority has imposed a fine on Sindicatum Holdings Limited of £49,000, and fined its money laundering reporting officer (MLRO), Michael Wheelhouse, £17,500 for failing to have adequate anti-money laundering systems and controls for verifying and recording clients' identities.

This is the first fine the FSA has imposed on a money laundering reporting officer.

The FSA ruled that the firm failed to implement adequate procedures for verifying client identity and that it failed to verify adequately the identity of a significant number of clients.

The FSA also decided that the firm failed to keep adequate records of client verification and that Mr Wheelhouse failed to take reasonable steps to put in place adequate procedures for controlling the risk of money laundering.

Read the full story here.

The Anti Money Laundering Answer for Accountancy Service Providers

Accountancy Service Providers, who include accountants, auditors, tax advisers, bookkeepers, payroll agents, tax consultants and customs practitioners, should now be registered with HMRC unless already supervised for compliance with the 2007 Money Laundering Regulations. They should also have introduced appropriate money laundering controls.

A key element of the money laundering controls is customer due diligence, which includes the verification of customer identity. Electronic verification is the simplest and most cost-effective means of undertaking the necessary checks, which must be made on existing as well as new customers.

Veriphy has attracted many service providers to its products because it has no minimum use policy, set-up charge or subscription fee, allowing users to check as and when they need, without costly investment. All they need is internet access.

George Stark, managing director of Veriphy said: "One call to us means that accountancy service providers are able to achieve compliance as quickly and easily as possible, at minimal cost. We know that many of them already struggle with time and resources so I'm delighted that we're able to provide a solution."

Veriphy was established in 2007 and helps to streamline the new client acquisition process and combat fraud by providing an online platform through which a range of identity, financial and property checks can be performed securely, swiftly and cheaply.

THE IMPORTANCE OF BEING COMPLIANT

FSA TARGETS MORTGAGE BROKERS

The Financial Services Authority has told lenders to step up their defences against mortgage fraud.

So far this year it has banned or fined 17 mortgage brokers who have been implicated in making actual or potentially fraudulent applications.

The regulator says it is targeting 200 more broking firms to ensure they have sufficient checks in place.

And it warns that some lenders may not be guarding themselves against fraud with sufficient diligence.

"The FSA continues to take very seriously the question of whether lenders' systems and controls for dealing with mortgage fraud are proportionate to the risk," said Philip Robinson, director of the FSA's financial crime and intelligence division.

"We are likely to take particular note of cases where weaknesses in due diligence and customer checks - or in outsourced relationships with third parties - may have contributed to a heightened mortgage fraud risk," he warned.

Source: BBC. For the full story, click here.

HMRC Money Laundering Guidance given HM Treasury approval

It has been announced that MLR8, HMRC guidance has been given HM Treasury approval.
It was also confirmed that:

• CCAB Guidance to be given Treasury approval after some minor amendments
• Changes to monitoring and practice assurance schemes to be announced
• Subcontractors may not need to register in their own right under the AML regime
• Interim managers to be exempt from the regulations altogether
• Clear test for what constitutes by the way of business
• Guidance on business relationships and occasional transactions
• Clear definitions for accountancy, tax advisor and trust and company service advisor
• Customs agents to be bought into the regime
• Clear definitions for payroll providers
• Advice on business premises
• Registration dates for accountancy service providers and TCSP’s announced after the suspension of applications

The revised notice MLR9 will be published on 31st July 2008.

NINE OUT OF TEN FACING PROSECUTION

Online verification company, Veriphy, is reporting that nine out of ten companies that contact them are on the wrong side of the law when it comes to the Anti Money Laundering legislation.

STOCKBROKING FIRM FINED £77,000 FOR WEAK DATA SECURITY CONTROLS

The FSA has recently issued the following news release.

The Financial Services Authority (FSA) has fined Merchant Securities Group Limited (Merchant Securities) for not adequately protecting its customers from the risk of identity fraud. This is the first time the FSA has fined a stockbroking firm for weak data security controls.

AWARENESS OF MONEY LAUNDERING REGULATIONS STILL LOW

It is now almost 6 months since the introduction of the new Money Laundering Regulations. There are, however, considerable numbers of organisations who should be complying but are not. Regulatory bodies have up to now taken a relatively relaxed view on enforcement, but this attitude cannot be guaranteed to last.

Veriphy offer a comprehensive, easy-to-use and reliable range of services that will ensure full compliance. Moreover, they support their services with friendly and knowledgeable advice.

MD George Stark commented: "We don't expect all our users to be computer whiz kids, and we know that checking real people in real circumstances is not always a black and white issue. For those reasons we are always happy to talk through any issues that our clients have, either technical or on questions of interpretation. I'd like to think that Veriphy has a deserved reputation for combining IT excellence with a friendly and human approach."

Veriphy can set up a new client extremely quickly, and makes no charge for its online services other than for checks undertaken.

HM TREASURY ISSUE STATEMENT ON NON-EU EQUIVALENCE

HM Treasury issued on 12^th May a statement on equivalence listing jurisdictions outside the EEA considered to possess equivalent anti-money laundering legislation to the 3rd European directive. The statement reads as follows:

VERIPHY CONTINUES TO GROW

VERIPHY OFFERS SUITE SOLUTION TO NEW REGULATIONS

Veriphy, the fast-growing provider of a unique online platform for identity and property checks, has launched a comprehensive solution suite to ensure compliance with the new Money Laundering Regulations.

VERIPHY PROVIDES HIPs COMPANY WITH CHECKS

VERIPHY SMASHES 500 USER BARRIER

VERIPHY INTRODUCES NEW SIMPLER CHECKS

A new online anti money laundering system for estate agents and related organisations has been launched in the North East.

VERIPHY BREAKS 100 USER BARRIER

NORTH East based Veriphy, which provides online access to Electronic Money Laundering and property checks has gone from strength to strength since launching earlier this year.

NEW APPOINTMENT VERIPHIED

IDENTITY THEFT- THE HARSH REALITY

STREAMLINING LENDING AND COMBATING FRAUD

PROPERTY and financial transactions could be changed forever thanks to a new online system.

VERIPHY LAUNCH ENHANCED WEBSITE

Veriphy are pleased to announce the unveiling of their enhanced website, which offers potential clients a wealth of information and options for trying its unique service.