Banks write off billions in stolen funds every year, claims fraud expert

Embezzled funds being written off by banks, says Aviv.

SCOTTSDALE - Banks in the US and Europe are writing off billions of dollars worth of embezzled funds a year without making any effort to recover them. That was the astonishing claim made by Juval Aviv, chief executive of Interfor, a corporate intelligence consultancy that specialises in tracking down white-collar criminals and recovering the proceeds of financial crime, at the American Bankers’ Association Information Security Conference.“People are stealing billions every year and getting away with it. Fraudsters know that if they are going to do it, they have to do it big and then complicate the investigation by moving the money across several banks in several countries,” claimed Aviv. “Banks then write off these losses and the fraudsters know this. That means the only people who will go after these criminals are institutions such as pension funds that want to see their money recovered. Banks simply have no interest,” he added. Aviv went on to use a recent example of a case he had dealt with involving two fraudsters from India who visited New York and left with $4.6 billion, although he did not give any specifics of the case.“They arrived in New York and [hired] a prestigious law firm, claiming they were rare metal dealers who wished to open an operation in the US. They then asked the firm to suggest a bank [where] they could open an account, and were referred to one with a recommendation from the law firm to take good care of them.“They opened an account, and shortly after $300,000 was wired into the account from Switzerland. A few weeks later, they asked the bank for a loan of $900 million, and on the basis of nothing more than a recommendation from a reputable law firm, they [were granted it]. That was all the bank did in the way of due diligence,” Aviv continued. “They then held a party on Wall Street asking for further finance from banks, and on the basis that one reputable bank had given them $900 million and [was assumed to] have conducted the relevant checks, many other [banks] provided them with funds.“These fraudsters even used their real passports. If one person had bothered to do a background check, they would have found these men had warrants out for their arrest in several countries for pulling the same scam on the other side of the Atlantic,” Aviv said.“There is a [tendency] to cut corners across the US banking community that allows frauds like this to take place. There are plenty of laws there to stop them, but if no-one is going to follow or enforce them, what purpose do they serve?” Aviv asked.Aviv also highlighted the case of Lea Fastow, wife of disgraced Enron chief financial officer Andrew Fastow, who embezzled $2.3 billion over more than four years by having her husband sign off invoices from 463 non-existent companies she had set up.“After all this, she was sentenced to five months in prison, and no-one bothered to go after the money. The culture in the US is simply to lock up the criminal without attempting to recover the stolen funds. What kind of punishment is that? I would imagine half the people in the US would happily go to jail for five months if they knew they had $2.3 billion waiting for them when they got out,” Aviv said. A controversial figure, Aviv claims to have worked as an intelligence officer for Mossad, to have substantial links to the CIA and the FBI, and to be currently employed as a terrorism consultant for both the White House and the US Congress. His membership of Mossad and his links to American intelligence agencies have never been substantiated. Ominously, Aviv went on to assert that “there are more corporate accounting scandals to come in the next few months, one of which will make Enron look like kindergarten.”

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