In Australia, Card (And Other Payments) Fraud Is Big Business

In Australia, a new report shows just how widespread internal fraud in the Commonwealth, aimed at government agencies, has become.

This past week it was reported that, per an investigation by the Australian Institute of Criminology, such fraud amounted to $42 million over the past year.

That fraud spans, among other methods, misuse of government credit cards and procurement payments, reported itnews.com.  The report noted there has been an 86 percent increase in fraud investigations done internally, with confirmation of fraud in as many as 75 percent of the cases investigated between 2016 and 2017, according to the report.

And though not all of it was payments fraud, the impact was significant — nearly $94 million was lost through such activities through 347,000 cases of internal and external fraud in those years.  And when it comes to external fraud, 95 percent of external fraud can be traced to “one large entity” focused on payment card fraud.  The report said the fraud had been identified and addressed.

“Much corrupt conduct in the NSW public sector may have been attributable to inadequate screening in employment processes,” said the report. “The main take-home message from the 2016–17 census is that having adequate resources to actively look for fraud, to encourage fraud prevention and to have trained investigators will allow entities to have a greater understanding of where their fraud risks lie and how they may counter those risks,” added the commentary.

The average value of the fraud came out to $31, according to the report.

In terms of individual fraud incidents, in Georgia, in June, the cyber-thieves were able to steal more than $800,000 from the city of Griffin via the ruse that is known as business email compromise (BEC).

The site oodaloop.com reported that the ruse worked after scammers posed as vendors to the city, and per an email to a city employee, asked payment information to be changed.  As has been a usual practice with BEC, all other information requested was seemingly correct, and thus two payments were sent to the fraudster’s account.  Authorities have told the site they believe the stolen funds can be recovered.

Separately, in Oklahoma, a computer software company owner has pleaded guilty to payroll tax fraud.

The Justice Department reported that from January of 2014 through June of 2016, Earenest J. Grayson Jr., owner of Zealcon Corp., “intentionally caused” the United States a tax loss of more than $1 million.  That came as the executive had not paid income and Social Security tax withheld from employee wages.

Sentencing is set for October.

“Failing to account for or pay payroll taxes is not acceptable,” said Principal Deputy Assistant Attorney General Zuckerman of the Justice Department’s Tax Division in a statement issued by the Justice Department. “The Department of Justice, working with the IRS, will ensure that our tax system is fairly enforced throughout the country.”