Over Seven Million Fraud and Cyber Crimes a Year

Bank-fraudMore than seven million fraud and cyber crimes are being committed a year, the first official estimates of the offences have revealed.

The Office for National Statistics said preliminary research indicated there were 5.1 million incidents of fraud, with 3.8 million adult victims in England and Wales in the 12 months prior to being interviewed between May and August.

In addition, there were an estimated 2.5 million incidents of cyber crime falling under the Computer Misuse Act.

The data from the Crime Survey of England and Wales also revealed that overall crime has fallen by 8% from last year with an estimated 6.5 million offences.

It is the lowest level since the survey began in 1981.

Separate police recorded crime figures, which are compiled in a different way, showed an increased of 5% with 4.3 million incidents.

 

The estimates for fraud and cyber crime are significantly higher than those suggested by the police recorded figures, according to the Office for National Statistics (ONS).

“There are a number of reasons why the CSEW estimate is so much higher than the figures recorded by the police,” the survey stated.

“The profile of cases covered by the CSEW cover the full spectrum of harm or loss.

“Reporting rates are likely to be lower in cases where there is low or no harm, but merely inconvenience, to the victim.”

The latest police figures show just under 600,000 fraud offences were reported to the National Fraud Intelligence Bureau (NFIB), a rise of 9% compared with the previous year.

 

More than half of fraud and cyber crime victims suffered financial loss, the survey found.

Of that number, 78% received financial compensation and 62% were fully reimbursed.

The most common cyber crimes, offences committed under the Computer Misuse Act, were where the victim’s device was infected by a virus.

It also includes people’s emails or social media accounts being hacked.

The CSEW, published quarterly by the Office for National Statistics, reflects experience of crime and is separate from police-recorded crime figures which only show how many offences were reported.

 

The new figures on fraud and cyber crimes do not show if the occurrence of these offences is going up or down, according to the ONS.

“It is important to recognise that these new data are not simply uncovering new crimes, but finding better ways of capturing existing crime that has not been measured well in the past,” the survey said.

“However, it is not possible to say whether these new figures represent an increase or decrease compared with earlier levels.”

The number of frauds reported to the National Fraud Intelligence Bureau increased by 9% with around 600,000 offences.

 

ONS spokesman Glen Watson said: “Since taking over the Crime Survey for England and Wales in 2012, ONS has been working towards improving the coverage of crime statistics and today publishes its first estimates of fraud and cyber-crime committed against the household population.

“We are at the forefront of international efforts to bring official crime statistics into the digital age.

“Although we estimate that there were more than seven million fraud and computer misuse incidents in the past year, this does not necessarily imply a recent rise in crime as the new measures bring into scope a large volume of offences not previously included in the Crime Survey for England and Wales.

“Furthermore, these new estimates should be seen in the context of a reduction over the past 20 years in the more traditional forms of crime, from 19 million incidents a year in 1995 to under 7 million a year today.”

 

Crime Minister Mike Penning insisted crime rates are continually dropping because of police reforms.

“Crime is falling and it is also changing, and we are committed to tackling fraud and cyber crime,” he added.

“This is not a new threat and the Government has been working to get ahead of the game.

“Since 2010, we have created the National Crime Agency, invested £860 million in the National Cyber Security Programme and established Action Fraud to support police by identifying the links between complex scams.”

He claimed the rise in violent and sexual crimes being reported to the police was due to changes in how offences are recorded.

“The Office for National Statistics has been clear that this rise reflects improvements in recording practice, rather than an increase in itself and this is something we welcome,” he continued.

“Tackling these horrific crimes is a priority, and we have introduced new laws that mean anyone caught in possession of a knife for a second time will now face a mandatory minimum sentence in prison.

 

On average one in 12 adults is a victim of fraud and one in 22 is a victim of cyber fraud, the figures show.

The survey also revealed the number of sexual offences, including rape, reported to the police rose by 41% from last year and is at the highest level since comparable records began in 2002.

There was a 25% rise in violence against the person reported to the police, including in the most serious categories resulting in injury.

Ex Police Officer jailed for fraud

Christopher Hawkins
Christopher Hawkins

A former police officer is starting a two-year prison sentence after pleading guilty to fraud offences totalling £85,000, police said.

Christopher Hawkins, 46, of Dorchester Road in Bury St Edmunds, was sentenced at Ipswich Crown Court after previously pleading guilty to four counts of fraud by false representation, according to Norfolk Constabulary.

Hawkins, a former police officer with Norfolk Constabulary, committed the offences between January 30 2007 and August 31 2013, the force said.

He falsely claimed his former wife had signed and agreed to be bound by the terms of credit agreements including extending mortgages and surrendering endowment policies in order to obtain cash loans.

Police said he made these applications on both their behalves, forging signatures to acquire the money to pay significant gambling debts.

These offences came to light following a previous investigation into a fraud allegation which Hawkins was sentenced for in September 2014, receiving a 12-month community order with 12 months’ supervision and 200 hours’ unpaid work, police said.

The force said Hawkins, who had served as an officer between December 1989 and October 2014, was dismissed from the force following his 2014 conviction after an internal disciplinary process with the Professional Standards Department.

Detective Sergeant Gary Lillie, from Norfolk and Suffolk’s anti-corruption unit, said: “We expect the highest level of personal and professional behaviour from those serving with us.

“This result highlights how important it is for the forces to continue to robustly investigate any allegations of criminal conduct made against its employees or former employees.

“The fact that Hawkins had deceived those who should have been able to trust him the most and who have particularly suffered via his actions is equally unacceptable.”

Gangland fugitive sent to jail

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Ben Fibersima
Ben Fibersima

A gangland fugitive who became a successful rap artist and model while evading police capture abroad has been jailed following a five-year hunt.

Ben Fiberesima, 30, used a fake identity to launch a career in Australia which made him “worth seven figures at age 26”, despite skipping bail in London for weapons and fraud offences in 2008.

Rebranding himself under the name Roky Million, the 11-times UK Battle Rap champion, Fiberesima’s hip hop career saw his work dubbed the “greatest UK Hip Hop Record of all time” by one British newspaper.

His music videos have been watched hundreds of thousands of times on YouTube – including one track, Need to Party, which has 177,000 views alone.

He also built a Twitter following of more than 150,000 and modelled for major fashion companies.

Following his rags-to-riches ascendancy, Fiberesima wrote a self-help book titled Roky’s Power Gain 50, which claims to have helped create 317 millionaires.

Its description says: “My story is straightforward. I grew up in government housing and have been for 80% of my life.

“I am now worth seven figures at age 26. I used my indepth knowledge of power to change my fortunes.”

But Fiberesima was eventually snared by police after they discovered he had returned to the UK in August last year and listed himself with a London modelling agency.

Officers posed as representatives of a company called WOU Photography and contacted the agency about hiring Fiberesima as a model for a new range of sportswear.

He arrived for the planned casting meeting on September 3, 2014 and was arrested at the entrance of the photographic studios in Kentish Town.

He was jailed for three years and nine months at Harrow Crown Court on May 6 after being found guilty of two counts of theft, two counts of fraud and one of possessing a weapon.

His final tweet read: “To all: Roky’s in the 5% of rappers that can genuinely be described as ‘real’ so as is life he’ll be ‘away’ til’ further notice #management”

In September 2008, police first entered his flat in Christchurch Avenue, Harrow, north-west London and discovered a stun gun, a canister of CS gas and a stoeln chequebook belonging to a neighbour.

He was arrested and bailed, but disappeared before his first court appearance.

Detective Inspector Pete Wallis of Brent CID said: “There is clear message here, that we will not forget you if you offend, and we will explore all options in tracing you and bringing you to justice.

“Mr Fibersima used false identities to evade capture for five years and developed a very public persona in Australia and internationally as a rap artist and model.

“Thankfully he is now paying for his crimes, due to the perseverance of Brent’s Wanted Offenders Unit.”

Man kills himself awaiting verdict in £20m fraud trial

Peter Benstead
Peter Benstead

 

A businessman killed himself while on trial with members of his family for a £20 million fraud, it can be reported today.

Peter Benstead, 72, was found dead in a vehicle near his home in Cornwall on Sunday afternoon, hours after being reported missing.

Jurors at London’s Southwark Crown Court were only told of Benstead’s death today, in private, as they returned their verdicts in the three-month-long case – unaware the principal defendant had killed himself.

The seven men and five women had spent nearly two weeks considering Benstead’s alleged involvement in the Crown Currency Ltd fraud case when he died. He had not appeared in the dock at various times during the three-month trial due to existing health issues.

The media were banned from reporting Benstead’s apparent suicide until after the final verdicts were returned.

His Honour, Judge Michael Gledhill QC asked jurors not to return verdicts on the 10 counts on which Benstead was accused.

However, jurors did find Benstead’s widow Susan guilty of one count of money laundering – a joint charge with her late husband on which she could only be convicted if he was.

Their son Julian, and son-in-law Roderick Schmidt, were also convicted of offences relating to Crown Currency, along with employees Stephen Matthews and Edward James.

The widow was not in court when the verdicts were announced in two sessions, yesterday and today. The judge had told jurors “not to be worried” by the Bensteads’ absence.

Addressing the jury at the end of the trial – before going into chambers and informing them of Benstead’s death – the judge said: “I asked you to put him to one side. I will tell you why I have done that in a few moments’ time.”

Having told the jury about Benstead’s suicide, the judge said “one or two were quite deeply affected” by the news.

The court heard 12,500 customers were left out of pocket to the tune of nearly £20 million when the Cornish-based firm went under in October 2010.

Prosecutor Peter Grieves-Smith said Crown offered customers fiercely competitive offers on foreign currency, but ran into serious financial problems when their market speculating came up woefully short. It meant Crown was having to use new clients’ investments to settle existing debts.

The court heard the ailing firm was still accepting payment from customers, even when some staff knew the firm was insolvent – with little chance of clients getting their money back.

Yesterday four people were convicted of their part in the fraud. Susan Benstead, Julian Benstead, Schmidt and fellow Crown Currency Ltd employee Matthews were convicted of a range of offences after jurors spent 45 hours and 30 minutes deliberating.

Schmidt, Crown’s day-to-day manager, 46, of Penzance in Cornwall, was convicted of two counts of fraudulent trading. He was cleared of two counts of false accounting.

Crown’s former accountant Matthews, 52, of St Newlyn, was convicted of two counts of false accounting but cleared of two counts of fraudulent trading.

Julian Benstead, 46, of Penzance, who ran Crown’s sister company which specialised in trading cash for gold, was convicted of one count of fraudulent trading. He was cleared of the theft of 11.3kg of gold which went “missing” in the days leading up to Crown’s collapse – a count on which his father was also charged.

The precious metal has never been found.

Susan Benstead, 70, of Penzance, had no involvement in the day-to-day running of the businesses. She was convicted of one charge of money laundering – using £897,459 of customers’ money to buy a luxury home in Cornwall.

Former Crown director Edward James, the ex-mayor of Glastonbury in Somerset, was found not guilty of two counts of false accounting. He was convicted today of two counts of fraudulent trading relating to the days leading up to the collapse.

They will be sentenced at Southwark on June 12.

 

McShane Jailed For Expenses Fraud

mcshane

Disgraced former Labour minister Denis MacShane has been sentenced to six months at the Old Bailey after admitting making bogus expense claims amounting to nearly £13,000.

The ex-MP previously pleaded guilty to false accounting by filing 19 fake receipts for “research and translation” services.

MacShane, 65, used the money to fund a series of trips to Europe, including one to judge a literary competition in Paris.

His guilty plea followed more than four years of scrutiny into his use of Commons allowances.

Flanked by two security officers, MacShane, wearing a dark suit with a blue striped tie and glasses, said “Cheers” as the sentence was delivered, before adding, “Quelle surprise” as he was led from the dock.

Mr Justice Sweeney told MacShane his dishonesty had been “considerable and repeated many times over a long period”.

“You have no one to blame but yourself,” the judge said.

The judge said MacShane had shown “a flagrant breach of trust” in “our priceless democratic system”.

“The deception used was calculated and designed,” he said.

He told MacShane he must serve half his sentence in prison and was ordered to pay costs of £1,500 within two months.

Parliamentary authorities began looking at his claims in 2009 when the wider scandal engulfed Westminster, and referred him to Scotland Yard within months.

But the principle of parliamentary privilege meant detectives were not given access to damning correspondence with the standards commissioner in which MacShane detailed how signatures on receipts from the European Policy Institute (EPI) had been faked.

The body was controlled by MacShane and the general manager’s signature was not genuine. One message, dated October 2009, said he drew funds from the EPI so he could serve on a book judging panel in Paris.

It was not until after police dropped the case last year that the cross-party Standards Committee published the evidence in a report that recommended an unprecedented 12-month suspension from the House.

MacShane, 65, who served as Europe minister under Tony Blair, resigned as MP for Rotherham last November before the punishment could be imposed.

Police then reopened their inquiry in the light of the fresh information and he was charged in May – even though the letters are still not thought to be admissible in court.

The offence of false accounting covered 19 ”knowingly misleading” receipts that MacShane filed between January 2005 and January 2008.

The court heard that MacShane incurred “genuine expenses” for similar amounts which he chose to recoup by dishonest false accounting rather than through legitimate claims.

Mr Sweeney said: “However chaotic your general paperwork was, there was deliberate, oft repeated and prolonged dishonesty over a period of years – involving a flagrant breach of trust and consequent damage to Parliament, with correspondingly reduced confidence in our priceless democratic system and the process by which it is implemented and we are governed.”

The judge said he had considered a number of mitigating features, including MacShane’s guilty plea, and that the offences were “not committed out of greed or for personal profit”.

MacShane had suffered “a long period of public humiliation” and carried out the offences “at a time of turmoil” in his personal life, Mr Sweeney said.

The court heard that MacShane and his wife divorced in 2003, his daughter Clare was killed in an accident in March 2004, his mother died in 2006 and his former partner, newsreader Carol Barnes – Clare’s mother – died in 2008.

The judge also considered his previous good character and that the money had been paid back.

The court heard that MacShane submitted four of his false claims while serving as Europe minister.

He joins a list of politicians prosecuted as a result of the expenses scandal.

They include fellow former Labour minister Elliot Morley, as well as MPs Jim Devine, David Chaytor and Eric Illsley.

Tories to fall foul of the law were Lord Hanningfield and Lord Taylor of Warwick.

Sentences have ranged from nine to 18 months.

Another ex-Labour MP, Margaret Moran, was spared prison and given a supervision order instead after suffering mental health problems.

Mr Sweeney told MacShane that he acknowledged a difference between his case and other MPs sentenced following the expenses scandal.

However, MacShane “deliberately created misleading and deceptive invoices and then used them in order to procure payments of public money”, the judge added.

“You must therefore have been aware throughout that it was an essential feature of the expenses system then in operation that Members of Parliament were invariably treated as honest, trustworthy people, and that the unwritten assumption was that only claims for expenses genuinely incurred in accordance with the rules would be made,” Mr Sweeney said.

“Yet you acted in flagrant breach of that trust.”

Cash-Point gang nets £29 million in a matter of hours

cashpoint

A worldwide gang of criminals stole £29 million in a matter of hours by hacking their way into a database of pre-paid debit cards then draining cash machines around the world, US prosecutors said.

Seven people are under arrest in the US in connection with the case, which prosecutors said involved thousands of thefts from ATMs using bogus magnetic swipe cards carrying information from Middle Eastern banks.

The fraudsters moved with astounding speed to loot financial institutions around the world, working in cells including one in New York, Brooklyn US Attorney Loretta Lynch said.

She called it “a massive 21st-century bank heist” carried out by brazen thieves.

One of the suspects was caught on surveillance cameras, his backpack increasingly loaded down with cash, authorities said. Others took photos of themselves with giant wads of notes as they made their way up and down Manhattan.

Hackers got into bank databases, eliminated withdrawal limits on pre-paid debit cards and created access codes. Others loaded that data on to any plastic card with a magnetic stripe – an old hotel key card or an expired credit card worked as long as it carried the account data and correct access codes.

A network of operatives then fanned out to rapidly withdraw money in multiple cities, authorities said. The cells would take a cut of the money, then launder it through expensive purchases or ship it wholesale to the global ringleaders. Ms Lynch did not say where they were located.

It appears no individuals lost money. The thieves plundered funds held by the banks that back up prepaid credit cards, not individual or business accounts, Ms Lynch said.

She called it a “virtual criminal flash mob” and a security analyst said it was the biggest ATM fraud case she had heard of.

There were two separate attacks, one in December that reaped £3.2 million worldwide and one in February that snared about £26 million in 10 hours with about 36,000 transactions. The scheme involved attacks on two banks, Rakbank in the United Arab Emirates and the Bank of Muscat in Oman, prosecutors said.

The plundered ATMs were in Japan, Russia, Romania, Egypt, Colombia, Britain, Sri Lanka, Canada and several other countries, and law enforcement agencies from more than a dozen nations were involved in the investigation, US prosecutors said.

The accused ringleader in the US cell, Alberto Yusi Lajud-Pena, was reportedly killed in the Dominican Republic late last month, prosecutors said. More investigations continue and other arrests have been made in other countries.

An indictment unsealed yesterday accused Lajud-Pena and the other seven New York suspects of withdrawing £1.8 million in cash from hacked accounts in less than a day.

Such ATM fraud schemes are not uncommon, but the £29 million stolen in this one was at least double the amount involved in previously known cases, said Avivah Litan, an analyst who covers security issues for Gartner.

Middle Eastern banks and payment processors are “a bit behind” on security and screening technologies that are supposed to prevent this kind of fraud, but it happens around the world, she said.

“It’s a really easy way to turn digits into cash,” Ms Litan said.

Some of the fault lies with the ubiquitous magnetic strips on the back of the cards. The rest of the world has largely abandoned cards with magnetic strips in favour of ones with built-in chips that are nearly impossible to copy. But because US banks and merchants have stuck to cards with magnetic strips, they are still accepted around the world.

Ms Lynch would not say who masterminded the attacks globally, who the hackers are or where they were located, citing an ongoing investigation.

The New York suspects were US citizens originally from the Dominican Republic, lived in the New York City suburb orf Yonkers and were mostly in their 20s. Ms Lynch said they all knew one another and were recruited together, as were cells in other countries. They were charged with conspiracy and money laundering. If convicted, they face 10 years in prison.

Arrests began in March. Lajud-Pena was found dead with a suitcase full of about 100,000 dollars in cash, and the investigation into his death is continuing separately. Dominican officials said they arrested a man in the killing who said it was a botched robbery, and two other suspects were on the run.