Compliance Blog

I ran across these two enforcement case prosecution actions involving credit unions on the Internal Revenue Service (IRS) website. Criminals continue to think they won't get caught.  Go figure.  Remember real life cases can be useful when training your staff......

Money Laundering Investigation – Fiscal Year 2016

Texas Woman Sentenced for Structuring Financial Transactions

A Texas woman pled guilty to structuring transactions to evade reporting requirements.  According to court documents, the defendant was employed by the Dallas Independent School District (DISD), and received direct payroll deposits from DISD and from the Texas Comptroller Teacher Retirement System of Texas. From January 2007 through November 2009, she had a total of 10 deposits of $6,270 into her credit union accounts. Beginning in December 2009, the cash deposits into the woman's accounts increased dramatically. From January 2010 to late October 2013, the woman structured currency deposits to avoid the $10,000 currency reporting requirements. She made approximately 111 cash deposits totaling more than $580,000. Each deposit was made with the intent to avoid the currency reporting requirements and was part of a pattern of activity involving more than $100,000 in a 12-month period. Funds deposited into her account were used to purchase seven residential properties that she was required to forfeit to the government.  The woman was sentenced to 18 months in prison.

Financial Institution Fraud Investigation - Fiscal Year 2016

Former Credit Union Manager Sentenced for Embezzlement

According to court documents, for more than 15 years, a Michigan woman embezzled $1,945,000 from her employer, a federal credit union, by removing cash from its vault and placing it in her purse. She deposited some of the cash into credit union accounts she controlled, and took the remainder of it home to spend on her own use and enjoyment. She hid her activity by manipulating the credit union’s books and records.  The woman was sentenced to 78 months in prison, two years of supervised release and ordered to pay $1.9 million in restitution.

***

Scam-Speak.  We know that knowledge is power when it comes to fraud prevention.   Are you, your staff and members aware of these schemes used for identity theft and criminal fraud?

Keylogger:  A program that logs sequential strokes on a computer keyboard and sends them to hackers so they can figure out a person's log-in credentials.

Malvertising: Malicious online advertising that contains malware — software intended to damage or disable computers.

Man-in-the-Middle Attack: When a fraudster secretly intercepts and possibly alters messages between two parties who believe they are securely communicating with each other.

Ransomware: A malicious program that restricts or disables a person's computer, hijacks and encrypts files, and then demands a fee to restore the computer's functionality.

Scareware: A program that displays on-screen warnings of nonexistent infections on a person's computer or smartphone to trick a person into installing malware or buying fake antivirus protection.

Skimming: The capture of information from the magnetic stripe on credit and debit cards by "skimmer" devices that are secretly installed on card-reading systems at gas pumps, ATMs and store checkout counters.

Smishing: Phishing attempts that go to a person's mobile devices via text message, telling them to call a toll-free number. Named for SMS (short message service) technology.

Spoofing: Any situation in which a scammer masquerades as a specific person, business or agency, but typically meaning the manipulation of a person's telephone's caller ID to display a false name or number.

Vishing: Short for "voice phishing," the use of recorded phone messages intended to trick a person into revealing sensitive information for identity theft.   

***

Where Shari Was in the World.  In my last blog post I shared some pictures of recent travels.  I heard from several folks with their best guesses but for those still curious......  In order from top to bottom – photos 1 and 2 were taken in Doha, Qatar, where I stopped on my way to visit a friend who is working in Yerevan, Armenia, which are photos 3 and 4.  Photos 5 and 6 were both taken in Reykjavik, Iceland, where I went with a friend from credit union land.

***

NAFCU Webcast:

ACH Rules and Operational Guidance

Wednesday, May 10, 2:00 p.m. – 3:30 p.m. EST

• Learn third party sender registration rule passage and compliance requirements
• Explore Same Day ACH Phase One roll-out experiences
• Examine Phase Two and Three Same Day ACH rules and implementation requirements for ODFIs and RDFIs