B2B Payments

In Payments Fraud, A Crypto Scam

payments fraud

It’s not just about invoices and BEC.  In one recent example, payments fraud reached into the crypto realm – and a publicly listed company.  Elsewhere, fraud at a health center in Manitoba received more than a million dollars in questionable payouts.

Many of the headlines centered on payments fraud have focused on the damage done to smaller suppliers and vendors, especially in the U.K.

But beyond the now-familiar conduits of fraud done across email or through fake invoices, some lures have come through ties with cryptocurrencies.

In one example, as reported by Livemint.com, the ex-CEO of a publicly traded FinTech firm based in the United States has been indicted for accounting fraud that allegedly garnered several million dollars.

As the site noted, Venkata Meenavalli, who served as head of the company known as LongFin, had — along with other executives — engaged in fraud that boosted the reported revenues of the crypto firm.  By inflating the top line, the company was able to get listed on the NASDAQ exchange.

The indictment handed down by the attorney says that the fraud took place over 2017 to 2018.  The company had said it had engaged in commodities trading and also said it conducted cryptocurrency transactions with a nod to “blockchain empowered solutions.”  Back in 2017, the company’s share price surged by 2,000 percent on the news of what was billed as a “blockchain pivot.”

The ex-CEO had allegedly reported $66 million in fake revenues, as charged by the U.S. Attorney’s office. If convicted Meenavalli could face as much as 20 years in prison and a $5 million fine.

Separately, in Canada, employees at the Fort Alexander health care center reportedly received more than a million dollars above their stated salaries in questionable payouts, as reported by the Global News.  Among those expenses were thousands of dollars in cash advances and what were billed as “extensive entertainment costs.”  The scheme came to light as part of an internal audit and spanned 18 months, allegedly.

“The audit uncovered instances of $1,000 cash advances, extensive travel entertainment costs (including escape rooms, movie theaters and toy stores), and tens of thousands of dollars in ‘finders fees’ for writing grant proposals,” stated the site, detailing the findings of the audit.  In addition, the majority of staffers were given “travel allowances” of $400 even though they still were reimbursed for travel expenses.

And in another instance of fraud, this time with wheels, accountancydaily.co reports that a chartered accountant who had served with Deloitte had billed for more than 90,000 pounds in fake Uber rides.  The scheme took place over three years.

Gurgyan Singh Kaley, who pleaded guilty to the fraud, claimed he gambled away £1m online in five years as he served on the real estate tax team at the Big Four firm.  The fraudulent Uber journeys totaled more than 1,000 and the receipts had been altered or falsified. He was spared jail time but fined 75,000 pounds to be paid back to Deloitte and also was sentenced to probation.

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